MNC Removes all Ex Gratia from exit packages

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fayf

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Got news from a friend, working at an MNC, who have ongoing and regular involuntary terminations, which up to a few months ago, included ex gratia payments of 4+ weeks pay per year of service, they have been doing this for a number of years, so there was a certain expectation, this would continue.

However, all current involuntary terminations, are only getting Statutory Redundancy, and - nothing else.

I was thinking employees “may” have a case, based on customary practices, but am aware there is no legal requirement to pay any Ex Gratia payments. I advised them to get legal advice.

Any thoughts on this ?
 
fayf said:
I was thinking employees “may” have a case, based on customary practices, but am aware there is no legal requirement to pay any Ex Gratia payments. I advised them to get legal advice.
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That sounds a bit like the Debenham's strikers. How did it go for them?
 
fayf said:
Got news from a friend, working at an MNC, who have ongoing and regular involuntary terminations, which up to a few months ago, included ex gratia payments of 4+ weeks pay per year of service, they have been doing this for a number of years, so there was a certain expectation, this would continue.

However, all current involuntary terminations, are only getting Statutory Redundancy, and - nothing else.
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How do you know that the "involuntary terminations" are actually "redundancies"?

What is redundancy?

Where you lose your job because your employer is closing the business or reducing the number of staff, this is known as redundancy.
www.citizensinformation.ie www.citizensinformation.ie
Where you lose your job because your employer is closing the business or reducing the number of staff, this is known as redundancy. It happens when your job in the company no longer exists, you are let go and are not replaced.
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If it's termination dressed up as redundancy, they may have a claim for unfair dismissal, or if it is indeed a redundancy, they may have a claim for unfair selection.

not sure about the 'custom & practice' claim, but it might be worth a shot.

A lot of these MNCs have generous severance packages as it's cheaper than being sued for unfair dismissal.

IANAL
 
For a lot of the MNC's, they will have staff on older T&C's and new T&C's and it is the norm for those on newer T&C's to have fewer benefits, including around redundancy. Assuming there is no union here and it applies to all, I would have thought such a change should have been raised with the Works Council for visability
 
ClubMan said:
I worked for several non-unionised American multinationals in my time and never heard of a works council in any of them.
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I've worked for non-unionised American MNC's for the last 20 years and every one has had them. TBH, they are no more then a talking shop in Ireland, a means of passing information and "going through the motions" but seem to be taken far more seriously on the continent
 
thedaddyman said:
For a lot of the MNC's, they will have staff on older T&C's and new T&C's and it is the norm for those on newer T&C's to have fewer benefits, including around redundancy.
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It’s unlikely that the precise terms of any redundancy package would be specified in an employment contract.

It would depend on the circumstances at the time redundancy was being considered rather than the time the contract was signed.
 
Salvadore said:
It’s unlikely that the precise terms of any redundancy package would be specified in an employment contract.

It would depend on the circumstances at the time redundancy was being considered rather than the time the contract was signed.
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In my experience, most MNC's have policy's in place and that policy outlines what redundancy package could apply and then the contract refers back to it
 
DannyBoyD said:
A lot of these MNCs have generous severance packages as it's cheaper than being sued for unfair dismissal.
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The tax treatment of any such severance package may depend on whether it’s described as a termination/severance etc or a redundancy.

AFAIK, redundancy lump sums can benefit from the exemptions contained in the Taxes consolidation act, but the treatment of terminations is less clearcut.
 
I should have been clearer, these are redundancies, and there is nothing in the employment contracts, and as far as i know, its not typical, to have redundancy ex gratia terms in an MNc employment contract, which allows MNC to be generous, or not so much.

Up to a month ago, all redundancy cases, were all paid statutory + 4 weeks pay per year of service + unsed annual leave + notice pay.

This has now ceased 100 %, and current batch of redundancies(all with more than 2 years service)are only getting statutory, unused annual leave, notice pay, and thats it.
 
fayf said:
I was thinking employees “may” have a case, based on customary practices, but am aware there is no legal requirement to pay any Ex Gratia payments. I advised them to get legal advice.

Any thoughts on this ?
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Do you mean a WRC case or something else?
 
I was wondering if these Employees have a case, either via WRC, or by taking a case against the Employer. Maybe they do not, but it has been custom & practice, and now the additional ex gratia have stopped, after being paid out for several years previously
 
fayf said:
I was wondering if these Employees have a case, either via WRC, or by taking a case against the Employer. Maybe they do not, but it has been custom & practice, and now the additional ex gratia have stopped, after being paid out for several years previously
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Well it wouldn’t be the strongest of positions but you’ve nothing to lose I guess.

If you’re going this route, you should perhaps first submit a grievance under the company’s grievance and disciplinary procedure, the details of which will be in your contracts of employment.

If this doesn’t work in your favour, you could then submit a complaint to the WRC and this could still be heard after the redundancies have occurred.

You could do all this yourself/yourselves without it costing you anything.

Bear in mind that when you get an enhanced redundancy package, part of the quid pro quo is that the agreement normally requires you to waive your employment rights in the future.

If you’re only being offered statutory redundancy, there can be no such expectation on the part of the company and so they would remain exposed to the threat of a WRC complaint, of the type suggested.
 
ClubMan said:
Can you explain what this means?
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Enhanced severance/termination packages aren’t produced solely for the benefit of employees. They seek to draw a definitive line under the employment relationship, to include the removal of any residual legal rights an employee may otherwise retain e.g. a complaint to the WRC. The risk of an employee making any such claim is effectively bought off.

Where a redundancy offer doesn’t exceed the statutory entitlement, there is no incentive for an employee to waive their legal rights and it would be foolish of them to do so.
 
Salvadore said:
Enhanced severance/termination packages aren’t produced solely for the benefit of employees. They seek to draw a definitive line under the employment relationship, to include the removal of any residual legal rights an employee may otherwise retain e.g. a complaint to the WRC. The risk of an employee making any such claim is effectively bought off.

Where a redundancy offer doesn’t exceed the statutory entitlement, there is no incentive for an employee to waive their legal rights and it would be foolish of them to do so.
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Thanks. I thought that you meant extinguishing employment rights going forward.
 
I found this on a google search -

Hayes Solicitors LLP, Dublin, Ireland - Law Firm. When Does Custom and Practice Create a Legal Entitlement to Enhanced Redundancy Payments?

With increasing job losses across the Irish economy, this article by Hayes Solicitors employment law specialists examines the legal framework for employees to successfully claim a legal entitlement to enhanced redundancy payments.
hayes-solicitors.ie hayes-solicitors.ie

Irish law take lead from UK case - The statutory adjudication bodies for Irish employment law, namely the WRC and Labour Court, have relied on the UK Court of Appeal’s (“CoA”) decision in Albion Automotive Ltd v Walker[1] that an employer who made enhanced redundancy payments on the same basis for several years had created a custom and practice by which the employer intended to be legally bound.


Might be up to you to prove it is custom and practice though
 
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