How to handle redundancy in Ireland
Reviewed by Mellow Editorial Team, HR & payroll content team
Redundancy in Ireland is a statutory process with defined rules on eligibility, notice, and payment. Getting it wrong — even unintentionally — can expose a business to an unfair dismissal claim, so following the correct procedure matters as much as the decision itself.
This article is general information only and not legal advice. For your specific situation, consult an employment law solicitor or HR professional.
Who qualifies for statutory redundancy
An employee qualifies for a statutory redundancy payment if they:
- Have at least two years of continuous service with you
- Are employed under a contract of employment
- Are being let go because the role itself is redundant — not because of performance or conduct
The role, not the person, must be redundant. This is an important legal distinction. If you fill the same role shortly after making someone redundant, that decision becomes very hard to defend.
Employees on fixed-term contracts can qualify too, depending on how those contracts were structured and renewed. Agency workers and the genuinely self-employed generally fall outside scope, but misclassification is a live risk — if someone has been working as a contractor but the relationship looks like employment in practice, take advice before proceeding.
What counts as a genuine redundancy situation
Irish law recognises redundancy in specific circumstances, including:
- The business, or the part of it the employee worked in, is closing
- The work the employee was doing no longer exists or is substantially reduced
- The employer needs fewer employees to do work of a particular kind
- The employer has decided the work should be done differently and the employee is not qualified or willing to adapt
A restructuring is a common trigger. But the process still needs to be fair. Selecting someone for redundancy based on protected characteristics — gender, age, disability, family status, for example — is discriminatory regardless of whether the underlying business need is genuine.
The selection process
If you are making more than one person redundant from a pool doing similar work, you need a fair and objective selection process. Using clearly defined, consistently applied criteria — such as skills, performance history, or attendance records — is far safer than informal judgement calls.
Avoid criteria that could indirectly disadvantage a protected group. "Last in, first out" is simple and transparent, but it can discriminate on age grounds if applied without thought. Document your criteria and how each employee was assessed against them.
If you are making 20 or more employees redundant within 30 days, collective redundancy rules apply. This triggers a mandatory 30-day information and consultation period with employee representatives and a notification obligation to the Minister for Enterprise. These rules have strict timelines — if collective redundancy applies to your situation, get specialist advice early.
The consultation requirement
Even for individual redundancies, you must genuinely consult the employee before the decision is final. Consultation is not a box-ticking exercise. The employee should have a real opportunity to propose alternatives — reduced hours, a different role, voluntary redundancy from another part of the business — before you confirm the outcome.
Hold at least one formal meeting. Give the employee reasonable notice of it and allow them to bring a colleague or trade union representative. Take notes. If an alternative role exists that the employee could reasonably do, you are expected to consider it seriously. Failing to do so undermines the fairness of the process.
Statutory redundancy pay and notice
The statutory redundancy payment is calculated as two weeks' pay per year of service, plus one additional week, capped at a weekly earnings ceiling set by the Department of Enterprise. The payment is tax-free in most circumstances.
On top of redundancy pay, the employee is entitled to their full notice period under the Minimum Notice and Terms of Employment Acts — or their contractual notice if that is longer. Notice ranges from one to eight weeks depending on length of service. You can pay in lieu of notice where the contract permits it.
You must give the employee a written redundancy notice (RP50 form) and submit the relevant details. Redundancy payments are reported separately from payroll, but payroll itself continues normally during any notice period — remember that real-time payroll submissions to Revenue via ROS must be made on or before each payday right up until the employment ends.
Appeals and what can go wrong
An employee who believes their redundancy was unfair can bring a claim to the Workplace Relations Commission (WRC) within six months of dismissal. The most common grounds are: the redundancy was not genuine, the selection process was unfair, or consultation was inadequate.
The WRC can award compensation of up to two years' remuneration for unfair dismissal. The burden is on you as the employer to show the redundancy was genuine and the process was fair. Good documentation — written criteria, meeting notes, correspondence — is your strongest defence.
If an employee disputes the redundancy payment calculation specifically, they can also appeal that separately through the WRC.
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