Tánaiste announces the publication of the new Redundancy Payments Bill 2003

Improved redundancy payments a key element of new legislation

Bill will also make the scheme simpler, speedier and more effective

The Tánaiste and Minister for Enterprise, Trade and Employment, Mary Harney today (7th May 2003) published the new Redundancy Payments Bill. The purpose of this important new legislation is to provide for changes in the operation of the scheme of redundancy payments and, in particular, to increase the statutory payments made to employees who lose their jobs through redundancy.

The legislation will provide for the payment of 2 weeks statutory redundancy payment for every year of service regardless of age. The current distinction between service under or over 41 years of age is being abolished. The existing provision for the payment of an additional bonus week is being retained.

At the present the statutory payment is a week or a half-week per year of service depending on age

The Bill will also make other important changes to the way in which the existing scheme operates in order to make it simpler, speedier and more effective.

For example, the Bill will amend the Insolvency Payments legislation to allow employees of insolvent companies to claim their minimum notice entitlements under the Insolvency Payments Scheme through a liquidator or receiver without first having to obtain an award from the Employment Appeals Tribunal. The Tánaiste said: "This will enable most claims to be processed together and speed up the payment of minimum notice entitlements to employees."

The changes to the scheme, including the provisions for improved payments, were provided for in the Partnership Agreement "Sustaining Progress" and the Report of the Redundancy Review Group.

Announcing the new legislation, the Tánaiste's confirmed her firm intention to bring the increased statutory payments into effect at the earliest possible date.

There will be no retrospective element to the new provisions. Backdating of the increased payments is not possible because the redundancy scheme places obligations on employers and confers rights on employees. The Tánaiste confirmed that the legal advice to the Government on this issue was quite clear. "Obligations, such as increased statutory redundancy, cannot be assigned to employers retrospectively. However, I hope, with the cooperation of all members of the Oireachtas, to have this new scheme in operation as quickly as possible," she said.

It is proposed that when the Bill is introduced in the Oireachtas the Tánaiste will announce the date from which the new redundancy terms will be effective, thereby giving advance notice to all employers and facilitating the introduction of the new redundancy terms soon after the Bill has been enacted by the Oireachtas.

The Tánaiste said: "I am delighted to bring this Bill before the Oireachtas. The method of calculation of the statutory redundancy lump sum and the level of payments have not changed, except for the ceiling on the weekly wage, since the Redundancy Scheme came into operation back in 1968."

She continued: "This is an important and timely piece of legislation which will give a reasonable level of increased statutory payments to redundant employees. I hope that the increased lump sum payments will help to alleviate the financial hardship caused by redundancy until these employees find alternative employment."

However, she emphasised that the significance of the other changes to the operation of the scheme should not be overlooked or underestimated. "What we will have once this legislation is enacted is a simpler and much improved scheme that will be a great deal easier to operate and understand."

Notes for Editors

The key provisions of the Redundancy Payments Bill, 2003 are as follows:

• The distinction between service under and over 41 years will be removed
• There will be 2 weeks pay for every year of service
• The bonus week will be retained
• Rebate of 60% to the employer will be retained
• Simpler method of calculating service
• Changes in the treatment of absences from work
• Treatment of service abroad
• Simplification of application forms
• New IT system, including e-government aspect
• Employees of insolvent companies to make claims for minimum notice entitlements under the Insolvency Payments Scheme without having to obtain an award from the Employment Appeals Tribunal

ENDS