Redundancy calculation, reduced hours - long term illness

[bobjim]

Hi,
Have a query about redundancy calculations, I can't find a clear answer and I don't want to ask my employer at the moment!

I used to work a full week but, due a to medical condition, I agreed with my employer over a year ago that I would work 4 days with my employer's long term illness insurance paying half of my salary for the 5th day - so basically I work 4 days and get 4.5 days salary.

If a redundancy situation arises, what salary amount would be used to calculate the amount I would receive?

Using simply numbers, say my original yearly salary was €50k for a 5 day week, then I am paid €40k for a 4 day week with another €5k coming from the insurance making an actual paid amount of €45k. So would it be €50k, €45k or €40k for the calculation?

Hope that makes sense, all advice welcome!

Cheers,
Bobjim

 

[Salvadore]

Hi,
Have a query about redundancy calculations, I can't find a clear answer and I don't want to ask my employer at the moment!

I used to work a full week but, due a to medical condition, I agreed with my employer over a year ago that I would work 4 days with my employer's long term illness insurance paying half of my salary for the 5th day - so basically I work 4 days and get 4.5 days salary.

If a redundancy situation arises, what salary amount would be used to calculate the amount I would receive?

Using simply numbers, say my original yearly salary was €50k for a 5 day week, then I am paid €40k for a 4 day week with another €5k coming from the insurance making an actual paid amount of €45k. So would it be €50k, €45k or €40k for the calculation?

Hope that makes sense, all advice welcome!

Cheers,
Bobjim

Hi Bobjim

The basis for calculation is contained in the following link.

Redundancy Payment Scheme

The Redundancy Payment Scheme makes statutory redundancy payments from the Social Insurance Fund to an employee where an employer is unable to make a statutory redundancy payment.

www.gov.ie

It refers to salary as the basis for calculation and provides for inclusion of sick pay. It may depend therefore on whether your fifth day income is regarded as sick pay or, alternatively, a form of insurance payout, in lieu of pay.

Taking the scheme at face value, an employer might reasonably apply a four day week as the basis for calculation as this is the amount that goes through payroll. This assumes that the insurance element is paid to you separately.

It may be worth seeking an interpretation from the Redundancy and Insolvency Unit of the Department of Social Protection.

 

[thedaddyman]

If you are asking about an ex-gratia payment then the rules of any redundancy scheme your employer will come into play here and you may need to ask them. Some employers take average earnings over the course of the last number of years as an example

 

[Salvadore]

If you are asking about an ex-gratia payment then the rules of any redundancy scheme your employer will come into play here and you may need to ask them. Some employers take average earnings over the course of the last number of years as an example

Yes good point of clarification.

My earlier post referred to the statutory entitlement. Employers are of course free to supplement this entitlement and some will have pre-defined rules as to how this will apply.

 

[bobjim]

Thanks for the responses! The 50% is from the payment from the company's Insurance Scheme and is administered via the company payroll.

If you are asking about an ex-gratia payment then the rules of any redundancy scheme your employer will come into play here and you may need to ask them. Some employers take average earnings over the course of the last number of years as an example

So again the question would be what constitutes 'earnings' in my scenario above? It may be defined in a company policy somewhere but maybe I'll try the Dept of Social Protection to see whether they can advise.

Worst case scenario, I might just ask the company how they would do the calculations.