redundancy & period of consultation

Hi everyone,

here's the facts of my situation.

Working for an English company as Irish Ops Manager based in Ireland. Had 2 staff but had to let them go during last year so have been covering all of their duties (admin, sales and marketing) myself and using sub-contractors for jobs where necessary.

Last week I got a call from my English boss to say he was at my office (small serviced office I set up) in Ireland and wanted to see me asap. I was out at a site visit with a client and a sub contractor. The boss's visit was unexpected so I had a feeling it wasn't going to be a nice meeting.

When I arrived at my office, he launched straight into 'we're closing the Irish office as sales are too low to justify the costs' and handed me an RP50 form filled out with that date on it and signed by him. He said he wasn't giving me notice but he was putting me on garden leave for 2 weeks. He asked for my SIM card so customers didn't contact me and diverted my email to him. I was also disconnected from the office network immediately. He reiterated that this was not a performance issue and it was simply business.

I argued to keep my latop to have access to hotmail - otherwise how would they contact me again? He eventually conceded and let me hang on to my laptop, company car and gave me a UK SIM card to use in case he needed to contact me. he then said if I had any ideas on how the company could continue in business in Ireland I should send them to him.

Here's my question:
1. Is this fair process? If I am the only employee in ireland do the collective redundancy provisions apply (i.e. 30 day period of consultation?)
2. If I've been given the RP50 with that date on it - I am being made redundant in 2 weeks time - aren't I? So therefore there is no consultation at all..they have made up their minds and are just giving lip service to 'send me your ideas'
3. Should they have considered alternative employment for me - i.e. working a 3 day week/ shutting the office and working from home seeing as though it's just me, etc etc?
4. Have I any comeback as they propose to pay €600/week statutory redundancy?

Still very confused about what just happened...I have no idea where I stand - other than that I don't have a job!

PS I just heard from one of my sub contractors that he called my work number...it went through to my English boss....who told the subbie I was on gardening leave!!!

Is he trying to ruin my reputation in the market?

Thanks,
Z

Unfortunately, if they are closing the office they are closing the office! Is the office a seperate company owned by the UK co or is it a branch? perhaps you have a leg to stand on if it is branch in that perhaps the should be offering you a job in the UK.


What notice period are you entitled to according to your contract and how long have you been working for the company. You are entitled to be paid for you notice period even if they dont want you to work it.

Do you know how they are planning to operate the irish side of the business with you gone? are you effectively going to be replaced? where you busy 5 days a week?

I was busy 5 days a week and more - competition in the market is so tough at the moment that you have to keep all the balls in the air. The Irish company is a branch of the UK - not a standalone Irish entity...does that matter? If they offered me a job in the UK (which they are advertising for) I couldn't take it anyways as I have a family to take with me and it wouldn't work out financially.

They have told the landlord that the office will be shut for 'around 5 months' so I'm not sure what they are planning...they haven't really explained anything other than the surprise meeting where I was sent home on garden leave..they have given me nothing in writing other than the RP50

Notice period is thankfully 2 months but they are taxing it all so I will be really under pressure to find something asap as mortgages have to be paid etc....plus I have to find cash to buy a car as I'll lose my company car...it's a nightmare if I think about it...but I know there are plenty in the same situation (if not worse off)

The only way I can negotiate with them is to get them on a technicality I guess...like the lack of consultation...

Well, I am not a lawyer but I was wondering if it was a branch to see if legally they have to offer you a position in the UK or a bit of a settlement.

They are being cruel by taxing you on your notice period as I dont think there is any harm just increasing your redundancy and reducing you payed notice.

I dont think you will get anywhere with lack of consultation, they are your boss and it is not uncommon to get little/no notice especially when you are such a key player (they were obviously afraid of you taking client etc.)

I think as they are a UK company they are playing everything by the letter of the law over here so I'm not sure if there will be any leeway in moving the taxes around... I know the tax legislation involved in taxing the notice period and it really is a inor technicality but if the company seeks tax advice in ireland, no tax adviser is going to advise them to not tax it....we'll see.

I had a good meeting with another company today so fingers crossed I won't be unemployed too long!

Notice period payments must be taxed as normal salary.

Consultation is only required where the company employs over a certain number of people (minimum 21) and a certain %age of them are being let go.

The only strange thing I can see here is that they told the LL that the office will only be closed for 5 months - I've no idea what that could mean.

OP, you are entitled to your contractual notice period (taxed as normal), your statutory redundancy (depends on how long you have been working for the company, but the statutory cap does apply I'm afraid), expenses unclaimed to date and holidays accrued (holiday pay would also be taxed as normal). Best of luck with your interview & I hope things work out for you.

As someone who was made redundant you need your reputation intact. Being the sole employee forced to go on gardening-leave, then the office closing down would not look good for you.

Why not just make you redundant with immediate effect and pay you Pay-In-Lieu-Of-Notice (PILON) - there is no difference to them (in fact, maybe a little PRSI savings).

But your reputation suffers. If you need a reference and believe you'd get one, if you get on well with the UK office/this manager generally, maybe just ask them to change how they describe you - 'let go' rather than on 'gardening-leave'. Ring the NERA.

I would hope that your reputation does not suffer and I am sure others will understand that your employers just made a stratigic decision to close the Dublin office. Everyone will understand it when explained that way!

Best of luck and yes fingers crossed you are back in the work force and not looking back very soon.

Gardening leave will not damage your reputation it is a vehicle used by companies to protect them against an ex-employee setting up in competition. Unless there is a specific clause in your contract of employment on gardening leave it cannot be enforced. As the only employee there is no consultation period but you are entitled to be paid for the notice period stated in your contract. Does the two months notice include gardening leave? One way or anther you must be paid the notice period and your statutory redundancy entitlements. DO NOT sign the RP50 until you have received your redundancy payment. An employer can give an employee a tax free ex-gratia payment up to approx €12000, could you negotiate with them to pay you for one month notice period and pay you the 2nd month as an ex-gratia payment? This would save you on PAYE and PRSI and the employer would not be liable for employer's PRSI.

In order for an employer to qualify for a rebate for payment of statutory redundancy (60%) a true redundancy situation must exist. The closure of the Dublin office would mean that your position no longer exists and therefore it is a genuine redundancy. The offer of a job in the UK is not a reasonable offer, therefore, you will not be penalised for not accepting. However, should the employer re-open the Irish office in five months, it would cast doubt on the genuine nature of the redundancy. Have you been given any explanation how the Irish business will be run in 5 months time? If a job similiar to what you have been doing will be available you should be offered the opportunity to consider it. It may well be that they will not employ anyone.

zippitydooda said:

Notice period is thankfully 2 months but they are taxing it all so I will be really under pressure to find something asap as mortgages have to be paid etc....

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In a redundancy situation myself and interestingly a solicitor I spoke to suggested I contact the Revenue and see if they can do anything for me on the amount of tax I would have to be paying.

Thanks for the replies and support...I've queried the taxation of the notice period and the saving of PRSI on their part might just sway it in my direction...but no decision as yet.

I have secured the other job - but at a much lower salary, no car and no benefits...but needs must I guess!

It just annoys me that they did the merry dance about 'you're not redundant until we discuss suitable alternatives'...but actually handed me the RP50 on the first day and are using that as the notice date..even though they kept saying the mantra that a decision will not be made finally until the 'eriod of consultation is over'...it's the Bull that gets me with these things.

Good thinking on the reference - I must secure a good written one now.

On the office opening up again - I was contacted yesterday by an industry source who said a director of the UK company was on looking for a contact number of another guy who they would then use to run the business in Ireland (they will change the title and make him more service based than sales based but ultimately it will appear to the market as if I've been replaced....- I suppose I'll have to wait and see how that pans out and if its worth challenging).


These things are never as straightforward as they seem!

One last question on the notice taxation...if they go ahead and tax it - is it taxed as normal OR can I still apply redundancy relief to it (i.e. use my exemption of €10K plus €765 per year of service).

Not sure if that's a stupid question - sorry...

zippitydooda said:

One last question on the notice taxation...if they go ahead and tax it - is it taxed as normal OR can I still apply redundancy relief to it (i.e. use my exemption of €10K plus €765 per year of service).

Not sure if that's a stupid question - sorry...

Click to expand...

If the notice period is in your contract (i.e. you are entitled to it per that contract), then it would be taxed as normal. If the extra notice period (above and beyond minimum notice) was discretionary, you could treat it as an ex gratia portion of your redundancy payment and have it taxed accordingly. From what you've said, I think it would be taxed as normal.