Following last year’s reduction of employer rebate of statutory redundancy payments from 60% to 15%, yesterday’s budget heralded the end of the redundancy rebate arrangement in Ireland.

This will have an impact on employers who will, from 1 January 2013, bear the entire cost of statutory redundancy payments owed to employees who are made redundant.

A&L Goodbody is advising clients who are already involved in a redundancy process or contemplating same to ensure that this recent development is reflected in their current preparations and cost analyses.

Whilst timing and notice periods are directed by contracts of employment, technically the mandatory two week notice period under the Redundancy Payment Acts 1967-2007 should be adhered to. Therefore, if employers wish to avail of the current 15% rebate on statutory redundancy payments, notices of redundancy should be served by Tuesday 18 December. Beyond that, for redundancy dismissals taking effect from 1 January 2013, there will be no statutory rebate available.

Clearly, unless redundancy processes are already underway, this will be very difficult to achieve and employers should be aware of the risks of rushing redundancies through.