The document discusses procedures for conducting redundancies, including: - Establishing legitimate reasons for redundancy based on business needs and applying selection criteria impartially. - Considering alternatives to redundancy and documenting efforts. - Providing statutory notice and redundancy payments correctly. - Supporting redundant employees during the process. - Maintaining thorough records to defend against potential unfair dismissal claims.

1. Chartered Accountants Tralee – 10 November 2009 Gene Boyd Boyd Associates Limited 2009

2. Management Consultant/Chartered Accountant Based in Tralee Previously General Manager of Fujisawa Ireland Ltd. (Astellas) in Killorglin Pharmaceutical assignments Focus on local Small & Medium Enterprises and Expanding Indigenous Businesses Helping to Grow your Business and Support your People Seminars Boyd Associates Limited 2009

3. Increasing in current economic environment To be carried out successfully certain procedures to be followed Main issues around: Reasons/Grounds for Redundancy Alternatives Selection Regulations (Notice, Forms) Payment (Statutory, Ex-Gratia) Best to be prepared rather than approaching it without a clear view on what needs to be done Boyd Associates Limited 2009

4. Dismissal from Employment in particular circumstances Main Legislation is Redundancy Payments Acts, 1967 – 2003 Definitions Minimum Statutory Payments Payment and Procedural Obligations on Employers Also need to be aware of other legislation (Unfair Dismissals & Equality Acts) as well as Custom & Practice Boyd Associates Limited 2009

5. Dismissal from Employment in particular circumstances Dismissal is wholly or mainly because Ceasing to carry out the business (complete or partial cessation or in a particular location) Reduced business (overall or specific) Reorganisation (outsourcing/increased use of technology) Work done in a different manner (lack of employee skills) Combination of work (lack of employee skills) Combination of more than one of the above Boyd Associates Limited 2009

6. Two important characteristics are present in all of the above Reasons/Grounds Impartiality (dismissal relates to the job not the person) Change (business level, different way of doing things, new technology etc.) Boyd Associates Limited 2009

7. If the redundancy is for one of the reasons set out in the Unfair Dismissals Acts 1977-2001 then, by definition, the redundancy is not legitimate Trade Union membership Religious or political opinions Involvement of an employee in civil proceedings against his/her employer Matters relating to pregnancy Exercise of statutory leave rights Etc. Boyd Associates Limited 2009

8. Applies to Employees with more than one year’s continuous service Dismissal of Employee deemed to be unfair unless Employer can prove otherwise ‘ Fair Dismissals’ Capability, Competence or Qualifications Conduct Redundancy Employee unable to work in the position Procedures vital Constructive Dismissal Boyd Associates Limited 2009

9. Selection process must be fair and non-discriminatory Where redundancy is not voluntary it is expected that it will be on last in, first out basis unless business cannot select on this basis because those employees remaining would not have the necessary abilities to do the remaining work to an acceptable level of performance and where training the remaining employees would not be a viable solution for reasons of cost or other valid reasons Onus on employer to justify approach Boyd Associates Limited 2009

10. Prohibits Discrimination by Employers on the following nine grounds: Gender Age Marital status Family status Sexual orientation Religion Race Disability Membership of the Travelling Community Boyd Associates Limited 2009

11. All companies now required to consider the Alternatives to redundancy Need to document that Alternatives were considered otherwise risk of Unfair Dismissal Common Alternatives include the following but beware of getting Employee’s Consent: Reorganisation Pay Cuts Career Breaks Extended Holidays Timebanking Lay-off & Short-time Boyd Associates Limited 2009

12. Discrimination can be Direct Indirect Need to be very careful! Need for reliable and accurate records to be available for the selection process If selection is not on ‘last in, first out’ basis then there must be adequate records and evidence to support the chosen basis Boyd Associates Limited 2009

13. If employee unhappy with selection process then he/she has the option of making a claim to the Employment Appeals Tribunal or Rights Commissioner depending on claim Main focus of EAT will be on whether objective criteria were used in deciding who would be made redundant Employer needs to be clear that the procedures chosen will stand up as being fair, equitable and objective Boyd Associates Limited 2009

14. Definition comes from Protection of Employment Act 1977 Occurs when a certain number of employees are made redundant within a 30 day period Only applies to businesses employing more than 20 employees Certain procedures need to be followed around notifying the Department of Enterprise, Trade & Employment Boyd Associates Limited 2009

15. Employee who has been laid-off or is on short-time working may be entitled to claim redundancy Lay-off or short-time for longer than four consecutive weeks or at least six weeks over a period of thirteen consecutive weeks Employee must serve notice Employer can serve counter notice (13 week’s work within a period of four weeks) otherwise employee entitled to redundancy payment subject to normal conditions Boyd Associates Limited 2009

16. Employer required to issue notice in accordance with the minimum notice periods set out in the Minimum Notice & Terms of Employment Acts 13 weeks to 2 years – 1 week 2 years to 5 years – 2 weeks 5 years to 10 years – 4 weeks 10 years to 15 years – 6 weeks More than 15 years – 8 weeks Must be written notice either directly to the employee or posted to his/her home address Boyd Associates Limited 2009

17. Statutory Entitlements Lump sum based on length of reckonable service and his/her weekly rate of remuneration at the time the employer declares the redundancy Must be paid on or before date of termination Only applies if employee has more than 104 weeks of service (two years) and is between 16 and 66 years of age Boyd Associates Limited 2009

18. Statutory Entitlements Weekly rate of remuneration includes all other benefits such as car allowance, lunch allowance etc. subject to a maximum of €600 Calculation of lump sum based on two weeks’ remuneration per year of service plus one week’s remuneration Part-years also included in calculation Statutory redundancy payments are tax-free Boyd Associates Limited 2009

19. Reckonable Service Following leave is allowable as reckonable service Adoptive leave Maternity-related leave Parental leave Force majeure leave Carer’s leave Other absence allowed by the employer General leave (sickness, holidays, lay-off) Boyd Associates Limited 2009

20. Non-reckonable service Only applicable in the three years immediately prior to the redundancy Absences in excess of 52 weeks for occupational accident or disease Absences in excess of 26 weeks other than for occupational accident or disease Absence by reason of lay-off by the employer Absence due to a strike Boyd Associates Limited 2009

21. Employer’s Rebate Employer is entitled to 60% rebate of the Statutory Redundancy payment from the Social Insurance Fund Only applies to the statutory redundancy payment Form RP50 must be completed by the employer and employee and submitted to the Department of Enterprise, Trade & Employment within six months of the redundancy Boyd Associates Limited 2009

22. Ex-Gratia Payments These are payments made in addition to the statutory redundancy payment These are determined by what is typical in the particular business sector, precedent, strength of negotiation of employee and employer discretion Usually calculated on a similar basis as the statutory redundancy payment i.e. No. of weeks per year of service Boyd Associates Limited 2009

23. Ex-Gratia Payments These payments are subject to tax but reliefs available Basic Exemption € 10,160 plus €765 for each complete year of service Increased Exemption € 10,000 extra, subject to Revenue approval, if no claim for relief has been made in the past ten years Reduced by any tax-free lump-sum paid or payable under an approved pension scheme Boyd Associates Limited 2009

24. Ex-Gratia Payments (cont’d) Standard Capital Superannuation Benefit (SCSB) Calculated (A x B/15) – C where A = average annual remuneration over the last three years’ service B = number of complete years of service C = value of any tax-free lump-sum received/receivable under an approved pension scheme Get tax advice to apply this relief! Boyd Associates Limited 2009

25. Ex-Gratia Payments (cont’d) Top-Slicing Relief Tax payable on an ex-gratia payment is limited to the employee’s average tax rate for the previous three years Any refund to be claimed in the year following the redundancy Issue for employee to follow-up Boyd Associates Limited 2009

26. In the two weeks prior to the redundancy the employee is entitled to reasonable time-off to look for new employment Paid time-off Applies also to making arrangements for training Employer entitled to ask the employee for evidence of such arrangements Boyd Associates Limited 2009

27. Considered best practice to support employees who are being made redundant Non-financial supports include Time-off to seek training/work Assistance with preparation of CV Assistance with interview skills Counselling Advice on management of redundancy lump sum Leaving drinks party Support for redundant employees but also a positive message for remaining employees Boyd Associates Limited 2009

28. Set out clearly Reasons/Grounds for Redundancy Must be legitimate (Impartial and involving Change) Determine Selection Procedure based on the Reasons/Grounds Must be fair and non-discriminatory Voluntary versus Compulsory Be clear why ‘last in first out’ selection procedure does not apply Review Employees to see how they fit into selection procedure Be aware of potential claims by employees and how you can defend against these (importance of records) Boyd Associates Limited 2009

29. Confirm Notice Period for selected employees Determine Redundancy Payment (statutory & ex-gratia) Be aware of any custom & practice issues Determine what non-financial supports will be provided to employees Inform Employees giving background and rationale Pay Redundancy Payment prior to or on date of redundancy Complete Form RP50 (with employee)prior to or on date of redundancy Boyd Associates Limited 2009