Article

1977 Act: 9(2); SI No 370/1996; SI No 488/2000: 4

Description

Section 9(2) of Protection of Employment Act, as amended, imposes an obligation on an employer proposing collective redundancies to initiate consultations with employees' representatives representing the employees affected by the proposed redundancies. These consultations include: 

• the possibility of avoiding the proposed redundancies, reducing the number of employees affected by them or otherwise mitigating their consequences by recourse to accompanying social measures aimed, inter alia, at aid for redeploying or retraining employees made redundant;
• the basis on which it will be decided which particular employees will be made redundant.

Alternatives to redundancy can sometimes involve states agencies, such as IDA (Industrial Development Authority) Ireland, particularly if the proposed job losses are in a locality where the job reductions have a more severe effect on the local employment levels.

Collective redundancies, for the purpose of the act, are defined as: at least 5 in an establishment normally employing more than 20 and less than 50 employees, at least 10 in an establishment normally employing at least 50 but less than 100 employees, at least 10% of the number of employees in an establishment normally employing at least 100 but less than 300 employees, and at least 30 in an establishment normally employing 300 or more employees.

The obligation to consider alternatives to collective dismissal/redundancies will not be changed by forthcoming legislation, dubbed the 'Plan of Action on Collective Redundancies following Insolvency Bill 2023', which will improve rights and redress on information and consultation, but the enhanced features on employee rights will bring alternatives to collective redundancies into more focus.

Commentary

Obligations under this section of the act apply for situations of collective redundancies, irrespective of whether the establishment is subject to a court-approved wind up. 

The penalty for a breach of section 9 is presently €5,000. This is considered ineffective in dissuading contravention of the obligation on employers. Following the Clerys store closure of June 2015, the government commissioned an expert review of the 1977 Act and its relations to Company Law. The Duffy-Cahill report was published in 2016. While the Government did not accept all of the Duffy-Cahill proposals, it is incorporating some changes suggested by Duffy-Cahill, in legislative plans due to be enacted in 2024.

Additional metadata

Cost covered by

Employer

Involved actors other than national government

Regional/local government Trade union Works council Other

Involvement (others)

IDA Ireland

Thresholds

Affected employees: 5
Company size: 21
Additional information: No, applicable in all circumstances

Sources

• Protection of Employment Act, 1977
• S.I. No. 370/1996 Protection of Employment Order 1996
• S.I. No. 488/2000 European Communities (Protection of Employment) Regulations 2000
• DG Employment, Social Affairs and Equal Opportunities/Héra (2011), Selected companies’ legal obligations regarding restructuring
• Ius Laboris (2009), Collective Redundancies Guide, Brussels
• Protection of Employment Act, 1977 as amended by S.I. No. 370
• 1996 Protection of Employment Order 1996 and S.I. No. 488
• 2000 European Communities (Protection of Employment) Regulations
• Duffy-Cahill report