The Collective Redundancies Law
The Collective Redundancies Law entered into force on 9 March 2001. Its purpose is to protect employees in the event of ‘collective redundancies.
The Law applies to ‘collective redundancies’, as defined below. It does not apply in case of voluntary termination of employment or dismissal on the expiry of a fixed term contract.
Collective redundancies to which the Law applies The criteria required to be satisfied in order to treat a redundancy as ‘collective redundancy’, are the following:
- The dismissal must have occurred at the initiative of the employer.
- The reason for the dismissal (there may be one or more reasons) must not be attributed to the individual employee concerned. For example, dismissals for economic or technical reasons satisfy the criteria, because they are not related to the individual employee affected, while dismissals due to violation of rules of work on the part of the employee or commission by him of an offence, do not satisfy the criteria.
- The number of dismissals over a period of 30 days must be:
- At least 10 in the case of an establishment normally employing 21 to 99 employees.
- In accordance with the Law, if the number of dismissals is at least five, account is also taken of any other dismissal occurring for any reason. Consequently, where a business normally employs 21 to 99 individuals, the Law applies, if another five or more contracts of employment are terminated, provided that at least five individuals have been collectively dismissed, as defined above.
- Where an establishment normally employs 100 to 299 persons, the dismissals must be at least 10% of the number of individuals normally employed.
- Where a business normally employs 300 or more persons, the number of dismissals must not be less than 30.
In summary, the Law is applicable, where the minimum number of dismissals, in relation to the total number of persons employed by an establishment, is as shown in the table below:
|Employees||Number of dismissals|
|20 or less||The Law does not apply|
|21 to 99||10 or more dismissals (if collective redundancies not less than five, account is also taken of any termination of contracts of employment occurring for any reason)|
|100 to 299||Dismissals not less than 10% of the number of employees|
|300 or more||Not less than 30|
The Law does not apply to:
- Any establishment employing 20 or less individuals (as shown in the above table).
- Collective redundancies under fixed term contracts of employment or for specific works, unless such redundancies take place prior to the date of expiry of the contracts, or before completion of such works.
- The crew of sea going vessels.
- Persons employed in the Public Service, by semi-government organizations, local authorities and public law legal entities.
When the employer is contemplating a collective redundancy, he must proceed with consultations with the employees’ representatives with a view to reaching an agreement.
The consultations should, at least, cover the following:
- Ways and means of avoiding collective redundancies or reducing the number of employees to be affected and of mitigating the consequences of collective redundancies (by recourse to social measures aimed, inter alia, at redeploying or retraining the employees made redundant).
- In addition, the employer must supply, in good time, the employees’ representatives with all relevant information in order to enable them to make proposals during the consultations. The employer has to give in writing, inter alia, the following information:
- The reasons for the planned redundancies.
- The number and the categories of employees to be made redundant.
- The number and the categories of employees normally employed by him.
- The period over which the redundancies are to be effected.
- The criteria to be used for selecting the employees to be made redundant (which by law or practice are the prerogative of the employer).
- The method of calculating any redundancy payments, other than that provided for by the Termination of Employment Law of 1967-1994.
The employer must supply the Minister of Labour and Social Insurance with a copy of the above-mentioned information (the method of calculating any payments may be omitted).
In addition, he has to inform in writing, the soonest possible, the Ministry of Labour and Social Insurance of any contemplated collective redundancy providing also all relevant information, and of the consultations with the employees’ representatives (as the Law
provides), and in particular:
- The reasons for the planned redundancy.
- The number of employees to be affected.
- The number of employees normally employed by the employer.
- The period over which the redundancies are to be effected.
Copy of the notification must also be forwarded by the employer to the employees’ representatives, who may submit their comments to the Minister of Labour and Social Insurance.
The aforesaid obligations apply irrespective of whether the decision for the collective redundancy is taken at the initiative of the employer or by an undertaking controlling the employer. It is noted that failure of the undertaking, which has taken the decision for the
collective redundancy, to duly inform the employer, does not constitute a defense on the part of the employer.
Planned collective redundancies take effect not earlier than 30 days after the notification of such redundancies to the Minister of Labour and Social Insurance. In addition, the provisions governing rights to notice in case of termination of employment must be observed. The Ministry of Labour and Social Insurance uses the 30 days period to seek solutions to the problems arising out of the redundancies. The period of 30 days does not apply where the collective redundancy is due to the termination of the establishment’s activities as a result of a judicial decision.
All information required to be provided under the Law must be treated as confidential. Any one who violates the provisions of the Law governing confidentiality is liable, on conviction, to a fine not exceeding €1.708 (£1.000). In addition, any one who violates the provisions of the Law governing provision of information, consultation and notification (e.g. failure to inform the employees’ representatives, or to provide the required information etc.), is guilty of an offense and is liable, on conviction, to a fine not exceeding €1.708 (£1.000).
Where the collective redundancies take effect before the lapse of the period of 30 days, the employer concerned, is liable, on conviction, to a fine not exceeding €3.417.
The right of the employee to compensation under the provisions of the Termination of Employment Law, is not affected by the provisions of the Collective Redundancies Law.