Despite being told that Ireland’s recovery is well under way, people continue to lose their jobs. Paddy Power, for example, is said to have plans to cut its Irish staff by up to 300 following its merger with Betfair earlier this year; 700 of Tesco’s longest serving workers have accepted redundancy rather than move to new contracts, while staff at Intel in Leixlip have been informed of possible redundancies as part of a worldwide staff culling to the tune of 10,000 workers.
So what exactly is redundancy, and what does it entail?
There are three types of redundancy – voluntary, forced andcollective. Basically speaking, an employee is made redundant when staff numbers are being cut or when a business is being shut down. Minimum payments that must be provided by employers are set out by the Redundancy Payments Acts 1967-2012, which states that employees are entitled to two weeks’ pay for every year of service (maximum €600 per week), plus a bonus week’s pay. The statutory payment isn’t subject to tax, though if your redundancy package exceeds this level, it may be. The Department of Social Protection offers a handy redundancy calculator to assess what you should receive from your employer.
You will have to meet a number of criteria:
1. Be aged 16 or over. 2. Be in insurable employment under Social Welfare Acts, with full-time employees under 66 years of age required to be paying Class A PRSI. 3. Have a continuous work history with your employer for 104 weeks (two years) from age 16 and older. This isn’t affected by factors such as maternity, adoptive, parental or carer’s leave, leave through illness, holidays or being laid off, being on strike or locked from your place of employment, or if you’re an agency employee.
Part-time employees are also entitled to redundancy payments under the Redundancy Payments Act 2003. Employees who have been laid off or are experiencing short time (pay or hours reduced to less than half than is normal) for four weeks or more can let their employer know of their intention to claim redundancy. If you don’t get a counter-notice within seven days, you could be eligible for a redundancy payment.
Employers must give at least two weeks’ notice for redundancies, with this time increasing depending on the amount of years served. If the employer hasn’t paid by this date, or you think you’ve received an unfair sum, you can apply for this to your employer by filling out the RP77 form.
If they still refuse to pay it, employees can apply directly to the Department of Social Protection for payment from the Social Insurance Fund using the RP50 form. If your employer is unable topay, have them sign the form and submit a letter from either a solicitor or accountant confirming their inability to pay.
For further details, queries payment refusals or disputes, employees can get in touch with the Workplace Relations Commission – disputes must be raised within one year of your termination.
The date of payment of Illness Benefit determines the tax year in which it should be taxed. If Illness Benefit is paid in 2016, it is taxable in the 2016 payroll. This does not pose a problem for the majority of Illness Benefit payments which are paid during a tax year.
Where Illness Benefit was paid in 2015, it was generally taxable in 2015. However, where Illness Benefit was paid in late December (after the December payroll had already been processed), employers were not required to deal with the taxation of this payment. The employer was not required to amend his December payroll to include this amount of Illness Benefit, nor should the employer carry this Illness Benefit forward to a 2016 payroll. Revenue will deal with the taxation of these Illness Benefit payments directly with the employee following the end of the tax year.
An employee has been absent on sick leave for a number of weeks. His employer does not operate a sick pay scheme and the employee did not meet the qualifying conditions to claim Illness Benefit from the Department of Social Protection. Is the employee entitled to a refund of tax and USC while absent?
Where an employee is absent on sick leave, and is not due any payment from his employer on his normal pay day, he is entitled to request his employer to make any tax and/or USC refund due, assuming the employer holds a cumulative tax credit certificate for that employee. Where such a request is made, the employer is obliged to issue any refund due on the normal pay day. If no request is made by the employee, the employer is not obliged to issue any refund.