I have been working for a company for 6 years however we have been informed that the business is closing permanently. Am I entitled to redundancy and if so how do I go about applying?
A redundancy situation arises when you loose your job due to the closure of the business you worked for. The Redundancy Payments Act 1967-2007 sets out eligibility for a redundancy payment. There is an array of criteria but if you have worked for a company for over two years in continuous employment and have been paying a class A PRSI you should then be entitled to a payment through the Redundancy Payments Scheme.
There is a statutory redundancy payment that employers must pay their employees. Some employers pay more and you should refer to your contract of employment to see if your employer has a company redundancy policy.
To calculate your statutory redundancy payment you allow two weeks pay for every year of service plus one extra week. There is a maximum earnings limit of 600 gross pay (before Tax/PRSI) per week or 31,200 per year. The redundancy payment is tax free.
Your employer should issue you with a ‘Redundancy Certificate’ (Part B on RP50 form) and pay your redundancy in full. If your employer does not pay your lump sum you should apply to them for it on an RP77 form. There are further procedures if the payment is still not paid to you.
Please note there are various procedures depending on the redundancy and how it arose, for example after a period of being laid off or on short time.
Based on your situation you should be eligible for statutory redundancy.