Complainant

Respondent

Anonymised Parties

An Accounts Administrator

A Company in the Charity Sector

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967

CA-00025088-001

17/01/2019

The complainant commenced working with the respondent on a community employment (CE) scheme on February 1st 2016. She had a two-year contract that ended on January 31st 2018. She was then contracted to work on three fixed-term contracts up to November 22nd 2018, when her employment was terminated due to the re-organisation of her work.

The complainant’s case is that, as she has been in the employment of the respondent for more than two years, and, as her job was made redundant due to the re-organisation of work, she is entitled to a redundancy payment.

For the respondent, the HR manager said that he has no dispute with the complainant and that he is simply seeking a decision regarding her entitlement to a statutory redundancy payment. Workers on CE schemes do not pay PRSI and are not therefore in insurable employment.   The HR manager said that a significant proportion of the organisation’s employees are on CE schemes and any decision in favour of the complainant will have implications for other workers.

Application of the Redundancy Payments Act 1967 – 2014

Section 4(1) of the Redundancy Payments Act 1967, as amended, sets out the “classes of persons” to whom the Act applies:

“Subject to this section and to section 47, this Act applies to —

(a) employees employed in employment which is insurable for all benefits under the Social Welfare Consolidation Act 2005.”

(b) not relevant

(c) not relevant

Section 47 is also not relevant to the complainant in this case.   The complainant meets the criteria under sub-section (a) above as she was employed in insurable employment from February 2018 up to the date of the termination of her employment due to redundancy.

At section 4(2), we find a reference to “excepted employments.”   This category applies to irregular work, working for a relative or work of an “inconsiderable extent,” presumably meaning that the work is not sufficient to be subject to PRSI deductions.

“This Act shall apply to an employee employed in employment which would be insurable for all benefits under the Social Welfare (Consolidation) Act 1993 but for the fact that the employment concerned is an excepted employment by virtue of paragraph 2, 4 or 5 of Part II of the First Schedule to that Act.”

Paragraphs 2, 4 and 5 are not relevant to the complainant’s status as a CE worker, but paragraph 6, which is excluded from any reference in section 4(2), provides that an “excepted employment” is,

“Employment under a scheme administered by An Foras Áise-anna Saothair and known as the Social Employment Scheme.”

The Law Reform Commission’s annotated version of the revised legislation shows that section 4(2) was amended in 2003 and paragraph 6 of Part 2 of the First Schedule of the Social Welfare (Consolidation) Act 1993 was not referenced. The effect is that CE schemes are not included in the short list of “excepted employments.”   As a result, workers on CE schemes are specifically excluded from the “classes of persons” covered by the Redundancy Payments Act.

Entitlement to a Redundancy Lump Sum

The Act goes on, at section 7(1), to set out the entitlement to a redundancy lump sum:

“An employee, if he is dismissed by his employer by reason of redundancy or is laid off or kept on short-time for the minimum period, shall, subject to this Act, be entitled to the payment of moneys which shall be known (and are in this Act referred to) as redundancy payment provided—

(a) he has been employed for the requisite period, and

(b) he was an employed contributor in employment which was insurable for all benefits under the Social Welfare Acts, 1952 to 1966, immediately before the date of the termination of his employment, or had ceased to be ordinarily employed in employment which was so insurable in the period of four years ending on that date.”

Section 7(5) of the Act provides that “the requisite period” is 104 weeks of continuous service.

The complainant meets the criteria under sub-section (a) above, as she was employed by the organisation for more than 104 weeks. I find that she also meets the criteria under (b) as she was in insurable employment immediately before the termination of her employment.

Conclusion

I have concluded that the complainant is entitled to a statutory redundancy payment, as she has completed more than the requisite 104 weeks of service with her employer.   I also find that her entitlement to a redundancy payment must be calculated based on the number of weeks of insurable employment from the date that she ceased on the CE scheme and became a direct employee of the respondent, when she commenced in insurable employment.

In accordance with the provisions of the Redundancy Payments Act 1967 – 2014 and, subject to her PRSI contribution status, I have decided that the complainant is entitled to a statutory redundancy payment.

CE schemes, statutory redundancy, insurable employment