Chambers urges return of rebate for redundancy

Chambers Ireland has urged the Government to reverse the proposal to abolish the redundancy rebate for employers, saying the move will result in further wholesale job losses.

Currently, an employer who pays statutory redundancy payments to its employees, is entitled to a rebate of 15% of that payment from the State. Social Protection Minister Joan Burton yesterday announced that will be removed completely from next month.

That percentage had originally dropped from 60% to 15% last year.

Chambers Ireland CEO Sean Murphy said: “This is deeply unfair and will have negative consequences for employers seeking to retain existing staff and create new jobs.

“A financially challenged company that can only survive through layoffs, thereby protecting some jobs, will have no choice but to close, resulting in the loss of more jobs due to the negative impact of these costs on the company’s cash flows.”

Chambers wants the Government to reinstate the rebate or reduce the statutory redundancy entitlement to one week for each year of service.

“This would still be more generous than the pre-2003 regime of half a week for years worked between ages 16 and 41 and one week for years worked over 41.”

The Small Firms’ Association said last year’s slashing of the rebate from 60% to 15% was “one of the most ill-thought out and detrimental measures” contained in last year’s budget and called this year’s abolition of the rebate concerning. It has called for SMEs to be exempt from the policy.

Meanwhile, lobby group Isme has written to the finance and social protection ministers to ask when the rebate might be reinstated, as the Government has not seemingly said this is a permanent measure.

Isme chief Mark Fielding said employers were currently still topping up the rebate fund through PRSI payments, and as this was continuing he said it should be expected that the rebate would be returned at some date.