# Rights under redundancy



## proctor (28 Mar 2012)

I have just been notified, unofficially, that I will be made redundant in June 2012.  The company have given me a "compromise agreement" which I will be asked to sign, officially,  before I can receive my redundancy payout.  

I have a number of questions:
Firstly the company have cited every employment law in the last 20 yrs (in the compromise agreement) and have also stated that I will have to receive independant advice on this agreement before signing.  They refuse to pay for me to have this legal advice.  Is this legal?  They are making me redundant and asking me to pay for the privilege of it.

Secondly they have told us we are not entitled to pro-rata payment regarding our redundancy.  I have worked for the company for 7.5 yrs and it will be 7.75yrs by the time they make me redundant.  They say they are only paying me for 7yrs and not for the pro-rata period.  This will make a strong dent on any payout i receive if this is the case. Is this legal?

Thirdly I am on a 3mth notice contract.  They propose to let me go in June 2012 and give me 3mths pay when I go in June.  However they refuse to pay my VHI, pension, etc for these 3mth.  In addition they refuse to have this 3mths added on to the redundancy period which I calculate will cost me €2.5k.  

Many thanks


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## elcato (28 Mar 2012)

> Firstly the company have cited every employment law in the last 20 yrs  (in the compromise agreement) and have also stated that I will have to  receive independant advice on this agreement before signing.  They  refuse to pay for me to have this legal advice.  Is this legal?  They  are making me redundant and asking me to pay for the privilege of it.


Standard practice to sign a document on being made redundant saying you are happy and have received the laid out terms. If you want to check the legalities of it then I'm afraid you have to pay for it.


> Secondly they have told us we are not entitled to pro-rata payment regarding our redundancy.


Again, redundancy is based on each full year worked. Sometimes this can work out but often not.


> They propose to let me go in June 2012 and give me 3mths pay when I go  in June.  However they refuse to pay my VHI, pension, etc for these  3mth.  In addition they refuse to have this 3mths added on to the  redundancy period which I calculate will cost me €2.5k.


I'd say that the VHI probably finishes in June so they are just not renewing which is fair enough. They are giving you 3 months pay in lieu of notice after all. Some would call it a bonus not to have your pension paid as I'm sure you have to contribute something yourself andthe company match it.
The company appear to me to be acting in good faith here i.e. paying above statutary and honouring notice period.


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## vandriver (28 Mar 2012)

The online redundancy calculator suggests that part years are paid.


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## elcato (29 Mar 2012)

Given that only full years of service are taken into account for statutary then any further payments on top of that is open to the company decision on it. I don't know the general rules on how companies decide on more generous than statutary  redundancy but I believe they don't have to. The statutaey law is there as a minimum requirement.


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## vandriver (29 Mar 2012)

Citizens Information also says part years are paid pro rata
http://www.citizensinformation.ie/e...t_on_calculating_your_redundancy_payment.html


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## vandriver (29 Mar 2012)

Have it!
Redundancy payments act 2003 section 11
 “AMOUNT OF LUMP SUM

1. (1) The amount of the lump sum shall be equivalent to the aggregate of the following:

(a) the product of two weeks of the employee's normal weekly remuneration and the number of years of continuous employment from the date on which the employee attained the age of 16 years with the employer by whom the employee was employed on the date of dismissal or by whom the employee was employed when the employee gave notice of intention to claim under section 12, and

(b) a sum equivalent to the employee's normal weekly remuneration.

(2) In calculating the amount of the lump sum, the amount per annum to be taken into account shall be that obtaining under section 4 (2) of the Redundancy Payments Act 1979 at the time the employee is declared redundant.

*2. If the total amount of reckonable service is not an exact number of years, the “excess” days shall be credited as a proportion of a year.*


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## elcato (30 Mar 2012)

Aha, you are correct. The law changed, from welfare.ie

*36. What is the situation regarding the calculation for redundancy  entitlement purposes of “excess days” (Section 11 of the Redundancy  Payments Act, 2003 in respect of all redundancies notified/declared on  or after 10th April, 2005)?*

 The old, pre- 10th April, 2005 system for calculating  “excess” days e.g. 3 years and 12 days was regarded as a bit too  complicated and sometimes unfair. It all depended on whether or not the  “excess” days were over or under 182 days, with periods under 182 days  being disregarded.
 The new post 10th April, 2005 is much simpler. It is  simply a case that all “excess” days will be credited as a proportion of  a year. For example, 91 days, which almost amount to a quarter of a  year (24.93% to be exact) will therefore give the employee an extra  24.93% of a years service, on top of whatever number of full years they  have worked for, even though the excess days are under 182 days – the  182 day rule is therefore gone as and from 10th April, 2005.  Thus, the simple formula used for calculating the proportion of a year  to be credited to the employee is 91 divided by 365 = 24.93%. Please  note that 365 days is now used for redundancy calculation purposes  rather that the figure of 364 days which was previously used.




Just wondering though, is statutary redundancy governed by the same rule or is that still full year service ?


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## proctor (3 Apr 2012)

Vandriver, thks so much...thats a huge weight off my mind.


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