Burton sees €50m redundancy pay saving
Under current rules, the exchequer pays for 60% of a redundancy package when a person loses their job, which is paid out of the Social Insurance Fund.
But Ms Burton wants to reduce this to 30% in a move that is expected to be met with strong opposition from business groups.
Employers are already angry about plans to force them to pay for the first four weeks of a worker’s sick pay — a cost that is also borne by her department.
Ms Burton is said to have a preference for “social welfare for people” over “social welfare for business”, and is determined to press ahead with the plans.
Combined, the reforms could save €200m, which would go a significant way towards the €700m savings she has to meet.
It is not expected that an individual worker will lose any of their redundancy entitlements under the proposal, which is aimed at ensuring that profitable businesses shoulder the cost instead of the taxpayer.
One example is where a company may chose to relocate out of Ireland to another country, but the Department of Social Protection pays a share of their redundancy payments.
The cost to the department of redundancy claims has risen from €54m in 2002 to €470m last year.
Ms Burton has already faced opposition from within the ranks of Fine Gael over her proposed changes to sick pay arrangements.
Chairman of Fine Gael’s parliamentary party, Charlie Flanagan, tweeted yesterday: “Joan Burton’s suggestion that Employers pay first 4 weeks sick benefit not a good idea.”
He said he spoke to the Minister of State at the Department of Enterprise with responsibility for small business, John Perry, and told him “it’s not a good idea”.
Fine Gael Senator Fidelma Healy-Eames also used Twitter to say the proposal would not be good for jobs.
“Joan Burton’s proposal to make employers pay 4 employees sick leave. Biting off hand that feeds us Kills jobs,” she tweeted.
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