The rules on severance pay in detail

Statutory severance payment is only payable in a redundancy situation where the employee has more than two years’ service. It is two weeks’ pay per year of service (pro-rated for partial years) plus one additional ‘bonus’ week. One weeks’ pay is capped at EUR 600 for the purposes of the statutory redundancy calculation.  

Statutory severance is in addition to notice and any other outstanding contractual or statutory entitlements.

Many employers offer severance payments in exchange for an executed waiver and release confirming that an employee will not bring a claim against the employer, but this is a matter to be negotiated between the parties, unless there is a written redundancy policy or a custom and practice which contractually binds the employer to pay a particular amount of severance pay on termination. 

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Author: Lewis Silkin LLP Ireland 

Date: December 2018


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