In what circumstances might an employee be entitled to a redundancy payment?

An employer must pay an employee a redundancy payment if the employee is dismissed by reason of redundancy; ie where the reason for dismissal is that:

  • the employer ceases to carry on the business in which the employee was employed;
  • the employer ceases to carry on that business in the place where the employee was employed;
  • the needs of the business for employees to carry out work of a particular kind cease or diminish; or
  • the needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.

To be eligible for a statutory redundancy payment, an individual must be an employee who has been continuously employed for a period of not less than two years. Self-employed people and those working under a contract for services are not entitled to redundancy payments.