Abolish statutory and exgratia redundancy payments

[z109]

Hi Yog
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.

Well, the maximum is €600 a week, I think, but it is a tax-free payment, so the person on 200k a year gets a greater benefit from the tax-free status (assuming they are not let go in January/February!). No?

On a risk-basis, high earners are surely more risky than low earners of getting the chop when a business downturn occurs, so a risk weighting should apply? (Okay, I'm being cheeky here)

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

Nah, if you want to opt out of social insurance, become self-employed. Half the male working population has already done so. Should people be able to opt out of the social insurance and even the tax system altogether then?

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.

Ah, so they did increase funding to pay for higher dole, maternity pay, redundancy pay! (These are the benefits that were increased).

 

[canicemcavoy]

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.

They call it insurance, but it's really just a tax by another name. I presume the only point of it is to make the tax system more confusing and cover up the fact it's another stealth tax. For PR reasons, it's better for a government to have a seemingly low standard rate of income tax, then add on a series of stealth taxes, then simply wrap it up in one single income tax.

 

[Padraigb]

It is called insurance, but it's not really insurance. There is no attempt to relate the premium to the claim...

It's another form of community rating -- just as with health insurance there is no effort to link any one person's premium with the risk that person represents.

 

[callybags]

A good possible consequence of this would be that employees of companies looking for pay cuts or changes in work practices would not be as determined to hold fast with the knowledge that if the company decides to close or relocate they would be in for a large redundancy payment.

I don't agree that redundancy is some kind of loyalty payment.

 

[Purple]

I am not against redundancy payments but I see no reason why the cost should be borne by the employer since the employee and the employer have paid considerable amounts of tax each week/month to finance the social insurance.

 

[z104]

It's a goodwill payment for the many years of loyalty the person has shown the company. It encourages an employeee to stay with a company instead of job hopping to better paying employers in the good times. ( remember those)

Loyalty works both ways and I think it's a disgrace that element 6 (formerly de Beers company) is only paying one weeks wage for every year of service.

 

[VOR]

Loyalty works both ways and I think it's a disgrace that element 6 (formerly de Beers company) is only paying one weeks wage for every year of service.

It's worse than that. They are paying 1 week to a maximum of 19 years. So long term servants will get a lot less then 1 week a year.

 

[Brendan Burgess]

As in when they are receipt of a pension in retirement? Or sick leave? Or long term disability?

Absolutely, the employer should not be paying for these.

These are a luxury which employers paid when they were profitable and making money. The employers, including the biggest employer, cannot afford to pay them anymore.

Where there is a contractual obligation as in the case of pensions, they should be continued or they should consult with workers about reducing them.

But we are talking about emergency measures to ensure our survival as a nation here.

Brendan

 

[DerKaiser]

But we are talking about emergency measures to ensure our survival as a nation here.

Brendan

There is some merit in taking the position that the state should not be paying social welfare to people who have recently had large lump sum redundancies as this constitutes some form of double payment when we can barely afford to make the minimum payments.

I do believe, however, that pensions, disability benefits and redundancies are something a large employer can offer.

Small enterprises could look at contracts excluding these benefits and, dar I say it, maternity benefit. Such benefits could easily put a small enterpise under serious strain so there could be grounds for exempting them from anything other than pay for hours worked

 

[Purple]

Small enterprises could look at contracts excluding these benefits and, dar I say it, maternity benefit. Such benefits could easily put a small enterpise under serious strain so there could be grounds for exempting them from anything other than pay for hours worked

But small employers are alrteady paying for them; it's called employers PRSI. The question for non-state companies is should they pay for them twice!

 

[Ghodadaba]

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

I'm utterly speechless.... Are you serious?

 

[Ghodadaba]

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

I think An Bord Snip suggested that this number should be achieved through natural wastage and an incentivised retirement scheme, which wouldn't require any redundancy payout.

But where redundancies are compulsory, of course there should be redundancy. It is ludicrous to suggest otherwise, and that is not an ideological assertion. It is purely practicality and equity.

Redundancy is compensation to someone who has had their contract of employment terminated. What is so obscene about that? You don't have to be a raving lefty to believe that it is just and appropriate for someone to be compensated after having their financial means removed on a uni-lateral basis.

The state has a duty to provide reasonable protection to people who are employed. That is a cornerstone of the type of society we have chosen to live in. When the state decides it can no longer provide that protection, it is only fair the worker receives some compensation.

Even if the state abolishes redundancy payments, it will still have to financially provide for the welfare of the individual anyway. It is a false economy to think we can abolish state redundancy payments, and then stick our heads in the sand and think we have washed our hands of all financial responsibility for that person when they are left with nothing.

 

[canicemcavoy]

These are a luxury which employers paid when they were profitable and making money. The employers, including the biggest employer, cannot afford to pay them anymore.

This is based on the assumption of course that no employers are now making money, which is not the case.

What about the situation where a very profitable company closes an Irish operation in order to move it to a third-world country and be even more profitable?

 

[Purple]

What about the situation where a very profitable company closes an Irish operation in order to move it to a third-world country and be even more profitable?

Just like they closed an operation somewhere else to move here in the first place?
The action of moving from rich to poor countries is the biggest up-side of international capitalism (from a moral point of view) as it gives others the same chances that we had. Why punish a company for doing this?

 

[canicemcavoy]

Just like they closed an operation somewhere else to move here in the first place?
The action of moving from rich to poor countries is the biggest up-side of international capitalism (from a moral point of view) as it gives others the same chances that we had. Why punish a company for doing this?

Sorry, but I wasn't arguing against that. I was arguing against the opinion that it's only non-profitable companies that are closing down and there therefore they have no money to fund redundancy payments.

 

[Ghodadaba]

Just like they closed an operation somewhere else to move here in the first place?
The action of moving from rich to poor countries is the biggest up-side of international capitalism (from a moral point of view) as it gives others the same chances that we had. Why punish a company for doing this?

It isn't punishment for the company, it is compensation for the employee who has been turfed out on their ear. It doesn't have to be an emotional argument, but it is proper and right that the employee is comensated for losing their job....

 

[callybags]

What about the situation where a very profitable company closes an Irish operation in order to move it to a third-world country and be even more profitable?

Should an employee who leaves a company for a better paid job be made compensate the company for inconvenience and the expense of recruiting somebody else?

 

[Mpsox]

There are a number of valid reasons why an employer would and should pay redundancy.
Firstly is on grounds of industrial relations to allow for a smooth and seemless removal of excess/unrequired staff from an organisation. It's a simple fact of life that trade unions or even unrepresented staff are not simply going to say "thanks, where's my reference?" and ride off peacefully into the sunset without a redundancy payment. Employers may not like it, but this is the real world

Secondly, by making it a cost for employers to let staff go, it actually protects jobs and prevents employers from simply having a knee jerk reaction to whatever issue is around and axing staff. It forces employers to make a more rational and reasoned financial descision when contemplating redundancy. If there was no redundancy in Ireland, statutory or ex gratia, I've no doubt unemployment would be much higher and the costs to the state would be far higher then they currently are.

Not every company has gone bust simply because of the credit crunch. many have gone bust because their owners were incompetent eejits who didn't know their backside from their elbow. Is it fair that the staff should not just loose their job but also not get redundancy because their employer was a buffoon


I agree there is an arguement for companies which are financially viable not being able to claim the 60% back and that the state should only get involved when a company is in liquidation.

Have we learnt nothing from the last 18 months, greed got us all into this mess, greed from employers is not going to get us out of it.

 

[orka]

It isn't punishment for the company, it is compensation for the employee who has been turfed out on their ear. It doesn't have to be an emotional argument, but it is proper and right that the employee is comensated for losing their job....

I agree with callybags - it's a two-way street. I have a contract with my employer which gives a notice period of 3 months to both sides - that's what I and they signed up to - either of us can say 'good luck and thanks' with 3 months notice. Them letting me go unexpectedly would be a pain in the ass for me but me leaving them unexpectedly would be a pain in the ass for them too - but neither side expects compensation - why would we? Mature adults signed up to a contract which has been honoured in full and now we're walking away. Most empoyment contracts don't guarantee a job for life.

greed from employers is not going to get us out of it.

Greed (and selfishness) from employees and soon-to-be-ex-employees is a lot more prevalent and damaging at the moment...

 

[canicemcavoy]

Should an employee who leaves a company for a better paid job be made compensate the company for inconvenience and the expense of recruiting somebody else?

Anything can be taken to a logical conclusion; I'm sure some will argue it's crazy that a company pays a good salary to an employee and then is expected to pay for their electricity, heating, a roof over their heads and paid holidays. ("It's political correctness gone mad.")

The only point I'm making here is that there _are_ companies making profits. Therefore, the justification that companies should not pay redundancy because none are making profits does not hold up.