Background
When employees are made redundant by virtue of a company going into insolvency, they may be entitled to receive certain payments from the Department of Enterprise, Trade & Employment. A summary of these entitlements is set out below.
Redundancy Monies
The relevant legislation provides that an employee with 104 weeks continuous service with the same employer, aged between 16 and 66, and employees who have reached 66 years of age and whose date of termination is on or after 8th May 2007 are now eligible, and whose employment was terminated because of redundancy may be entitled to a redundancy lump sum payment.
Where a notice of redundancy has been formally conveyed to the employee on or after 10 April 2005 by reason of the employee receiving a notice of redundancy in the prescribed form i.e. the RP50 Form, the employee is entitled to receive two weeks pay for each year of service, regardless of age.
The redundancy lump sum payment is calculated as two weeks pay for each year of employment plus a bonus week.
It should be noted that there is a statutory ceiling of €600 per week applied when calculating the lump sum.
There is a useful redundancy calculator on the Department’s web site at www.entemp.ie.
Minimum Notice Payments
The relevant legislation provides that an employee who has continuous employment with the same employer for a minimum period of 13 weeks is entitled to a minimum period of notice before his dismissal. The amount of notice entitlement depends on the length of service. The amount of notice entitlement is set out below:
Length of Service Minimum Notice
Thirteen weeks to two years One week
Two years to five years Two weeks
Five years to ten years Four weeks
Ten years to fifteen years Six weeks
More than fifteen years Eight weeks
If an employee does not receive the statutory minimum notice period , then the employee may be entitled to receive a payment from the Department of Enterprise, Trade & Employment.
Arrears of Wages and Holiday Pay
The relevant legislation provides that an employee who is in employment which is insurable for all benefits under the Social Welfare Acts (in general terms this means employees who pay full PRSI contributions) is entitled to receive payment for arrears of wages and holiday pay from the Department of Enterprise, Trade & Employment.
Restrictions on Payment
In determining the amount of the above payments, the calculation of a weeks pay is subject to a ceiling of €600.
How to make a claim?
The appropriate forms should be completed and returned to the company Insolvency Practitioner.
The Insolvency Practitioner will process the forms and forward them to the Department of Enterprise, Trade & Employment.
For further information please contact Jim Stafford or Tom Murray on 01 661 4066 or stafford@liquidation.ie or murray@liquidation.ie