Abolish statutory and exgratia redundancy payments

Brendan Burgess

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I have never really understood why people get payments when they are made redundant.

It is a joke that the Clare plant is paying the highest wages in the World and to survive as a company they have to pay off the employees whose salaries are the main reason for the plant to close. Not only do they have to pay their share of the statutory redundancy, they are under pressure to pay extra. I think it has been acknowledged that they have been a great employer and a great contributor to the Irish economy over the years. We should be thanking them for their contribution not penalising them for ending it.


Someone has a well paid job for 25 years gets a year's salary tax free on leaving that job. Someone who has been unemployed for 25 years gets nothing.

The state can't afford it and so should stop paying statutory redundancy payments.
 
In particular, there should be absolutely no payments to the 17,000 public servants who lose their jobs. There is no basis for this and we simply do not have the money to do so.

The government should not have to borrow a huge amount of money now to cut spending in the long term.

Brendan
 
Thats not going to happen.
The 17,000 jobs are going to go by a process of natural wastage and an incentivised early retirement package over a two year period.
Those who have reached retirement age will receive a pension based on their years of service and a lump sum equivalent to 1.5 times their final years salary , those who avail of early retirement will again get a pension based on years of service plus 10% of their lump sum with the balance payable on attaining what would have been their usual retirement age
 
Statutory redundancy should be abolished only after an insurance scheme is put in place. This should be compulsory for all employees and deducted at source in to a national fund. It would also be payable by the employee either by way of increased PRSI or perhaps as a new deduction.
It could then pay out 60%-75% of your salary while unemployed for a specific period.
Germany operates a similar system http://www.howtogermany.com/pages/working.html

Without this I could not agree to abolishing redundancy payments.
 
VOR said:
It could then pay out 75% of your salary while unemployed.
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I assume this is subject to either/both a maximum payout plus a defined period of benifit. Would this be payable along side unemployment benifits already payable?
 
Why not just make income protection insurance tax deductable. Then people can take responsibility for their own lives and pretend they are adults?
If you don’t want to buy the insurance fine; then you get the dole (which should be half what it is now).
 
The factory has been open 40 years. It's safe to say there are probably 60-year-old men working for this company who have ever only worked in industrial diamond manufacturing. As far as I'm aware, there are no other such companies in Ireland now, and if there were, I'm pretty sure that they're not hiring. And, if they were, probably wouldn't be hiring 60 year old men.

The idea that they should be laid off with absolutely no payments seems to be based on some Norman Tebbit-like notion that these men will be on a bike to a new job anytime soon.
 

It is also reasonable to suggest that the contract that existed between the employer and the employee was for X hours a week for Y amount of money. Each time the employer paid the employee the slate was cleared. Therefore no moral liability exists between the two parties. If there is some social responsibility them the burden for this lies with the state. The only social burden that the employer bears is to operate within the law and pay their taxes.
If an employee has worked there for 40 years and is now 60 it is not unreasonable to expect that they have made (or should have made) provision for their future. If someone chooses to live hand-to-mouth for 40 years that’s their own problem.

I actually feel that PS/CS staff who may be laid off should be paid redundency as they entered a job in which there was an expectation that they would never end up out of work. In their case it was reasonable that they should not make provision for having no/reduced income.
 
Brendan said:
It is a joke that the Limerick plant is paying the highest wages in the World and to survive as a company they have to pay off the employees whose salaries are the main reason for the plant to close.
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Can I point out that if you are referring to the closure yesterday in Shannon, this was in Clare and not Limerick. Unless, of course, you were referring to Dell.
 
Lets not lose the run of ourselves here. I never thought it would come to this but I'm starting to believe that a lot of people want to completely thread on the rights of workers.

There is absolutelty nothing wrong with providing pensions and other benefits to workers in their contracts. There is absolutely nothing wrong with people who have worked for 25 years getting lump sum redundancy if they are made unemployed through no fault of their own.

In the same way employees have to recognise that businesses need to pay wages and bonuses according to their ability to make a profit, employers have to recognise that loyal workers should have certain rights and this is a benefit to everyone.

Unions may be overzealous in protecting unjusifiably high wages at times but screwing workers is not a rational antidote to this.
 
Hi Kaiser

No one is treading on anyone's rights.

I am simply questioning why this is paid? It is not a right other than we have made it a right. But why should it be a right?

A company should pay its workers well while they are working. They should not pay them for not working.

Brendan
 

+1

There's always a happy medium between Chicago Boys-style slash and burn capitalism, and stifling protectionism.

There's seems to be a huge overlap between those who were the main cheer-leaders for the unsustainable bubble and its tax revenues and those who now want to implement unfair cuts on the most vulnerable.
 
Brendan said:
Someone has a well paid job for 25 years gets a year's salary tax free on leaving that job. Someone who has been unemployed for 25 years gets nothing. The state can't afford it and so should stop paying statutory redundancy payments.
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The state only pay the value of 60% of these payments therough refunding the companies and only pay on the stat amount. its rather funny you say this it almost makes me laugh someone who has been working for 25 years has actually been paying taxes to support that person who has been unemployed for 25 years! Why would an unemployed person be owed anything?
 
Brendan said:
It is not a right other than we have made it a right.
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You might as well say this of all rights; is there a concept of natural rights? We're in the area of AskAboutPhilosophy there!

Redundancy payments, to me, are simply there to tide someone over until their next job and help clear some debts or, morbidly, to help someone who is, realistically, is in their 50s/60s, was in a single specialised industry since their youth, and never going to work again.
 
those who now want to implement unfair cuts on the most vulnerable.
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The key point which people are missing here is that if there are not huge cuts, we will go bankrupt and the most vulnerable will not get any social welfare payments, the pensioners will get no pensions and the hospitals will close.

Cutting social welfare and public service salaries and redundancy payments is protecting the most vulnerable.
 
I think there is more to employment than an exchange of hours of labour for an amount of money. It is a relationship between persons, and it should involve loyalty and looking after the best interests of the other party. Good employers and good employees operate that way, without even having to think about it. The rest might need to be directed to do the decent thing.
 
Statutory redundancy is a paid-for insurance payment. Like Jobseekers Benefit, it is paid in the form of employer's PRSI. This makes it a right in my book, much like JB. The government some years ago, IIRC, increased the number of statutory weeks per year. As I recall, they did this without increasing the employer PRSI contribution, much like they have increased JB payments without any concomitant increase in funding. If the government has underestimated the actuarial risk of an employment shock and the social insurance fund is going to be inadequate to cover these payments that is a different issue ("if", who am I kidding? This government couldn't estimate the number of legs on a donkey).
 
Hi Yog

As I recall, they did this without increasing the employer PRSI contribution, much like they have increased JB payments without any concomitant increase in funding.
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It is called insurance, but it's not really insurance. There is no attempt to relate the premium to the claim. A person earning €200k pays a much higher premium than a person earning €36,000, but they get exactly the same benefits.

And if it's insurance, people should have the option of paying it or not.

The government removed the cap on employers' prsi some years ago which was a huge increase in the cost to employers. I don't recall any benefits being increased at the time.

Brendan
 

I agree with this, if a company decides to close and has surplus funds then the surplus funds should be split between the stakeholders as they are the people who made the surplus in the first place.

Similiarily, there have been several stories of companies being involved in substantial deals/sales that created a serious amount of cash. In many of these cases the employer was recognised the efforts of its staff by paying huge bonuses as a way of saying "thank you".
 
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