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End of employment process in Ireland

When managing talent in Ireland, employers must carefully navigate the end of the employment process to avoid potential legal and financial risks.

In this guide, we will discuss relevant information and regulations for you to establish proper procedures for the end of employment, ensuring all processes are handled in compliance with employment laws to protect both the interests of your business and the rights of employees.

Notice period in Ireland

What is the standard notice period in Ireland?

In accordance with the contract terms, the notice period is dependent on the length of employment. Notice should be made by both an employee and employer as outlined below:

  • 13 weeks-2 years: 1 week’s notice
  • 2-5 years: 2 weeks’ notice
  • 5-10 years: 4 weeks’ notice
  • 10-15 years: 6 weeks’ notice
  • 15+ years: 8 weeks’ notice

Employers are also required to provide notice or pay in lieu of notice for terminations. Employees who have been continuously employed for two years or more have the additional protection of the unfair dismissal law, which requires that employers have a fair reason and follow a fair procedure in terminating employment.

Severance Pay

Severance is payable only to redundant employees with 2 years’ service. In cases of redundancy, the statutory redundancy payment is typically calculated as two weeks’ gross pay per year of service, up to a ceiling of €600 per week, plus an additional one week’s pay subject to the same ceiling. This payment is tax-free, and some employers may offer redundancy agreements that exceed the statutory rate. More generous terms are possible and quite common.

Probation Period

The common probationary period to use in Ireland is 3 to 11 months. In exceptional circumstances, probation can be extended for up to a further 6 months, with a maximum total duration of 12 months. This extension should be in the employee’s interests or in cases where the employee has been on extended leave.

Employee termination in Ireland

As an employer, you have the right to terminate a fixed-term contract for reasons such as business needs, personal reasons, or worker misconduct. Employers in Ireland must be able to provide evidence that they have followed a fair and objective dismissal process that adheres to the principles of natural justice, equality, and due process. This includes giving formal notice and providing written reasons for the employee’s dismissal. The dismissal process should offer an opportunity for the employee to respond and appeal the decision in a reasonable and timely manner. In cases of dismissal due to employee’s conduct, a warning must be given to allow them the opportunity to explain their actions.

However, if an employee is found to have engaged in gross misconduct, such as dishonesty, theft, or assault. Employers may be able to terminate the employee’s employment without notice. Dismissal for other reasons, such as redundancy or poor performance, may require a longer notice period or additional compensation in accordance with the terms of the employee’s contract or any applicable employment law.

Once employment ends, employees are entitled to receive any outstanding payments owed to them, along with a payslip.

To ensure that employee termination is managed in a fair and legally compliant manner, it is often recommended that businesses seek legal advice and support. Working with an experienced HR consultant or global employment solution provider like CXC, for example, can offer businesses with valuable insight into the termination process, minimising the risk of legal action or potential reputational damage.

How long can employers keep files for terminated employees?

In Ireland, the retention periods for employee files after termination vary depending on the type of data and the relevant legal requirements. The following retention periods are commonly recommended:

  • Employee statements: Employers in Ireland must retain a copy of the employee statement throughout the employee’s employment and for one year after termination at a minimum.
  • Payroll details and payslips: Employers in Ireland can keep records, calculations, and documents relating to the value of benefits for employees, including payroll details and payslips, for six years.
  • Employment records: Employers in Ireland can retain personal data such as employee names, addresses, PPSNs, employment details, working hours, breaks, leave, and wage records for defined periods, typically three years from their making. However, these retention periods can vary, and employers should always ensure compliance with the most current legislation and guidelines.

Post-termination restrictions Ireland

Post-termination restrictions refer to clauses or provisions in employment contracts that limit or restrict certain activities of employees after their employment ends. Typically, employers use these restrictions to safeguard their legitimate business interests, including confidential information, trade secrets, client relationships, or competitive advantage. Employers in Ireland must keep in mind that restraints must be tailored for the specific business and the risks posed by the employee.

Non-compete agreements

These agreements must be defined and justifiable. The typical duration is no longer than 3 to 6 months with an absolute maximum of 12 months, depending on the circumstances. The geographical area must also be reasonable and not extensive.

Customer non-solicitation agreements

These agreements are permissible in specific circumstances. It has a typical duration of 3-6 months, with an absolute maximum of 12 months, depending on the circumstances. The geographical area must also be reasonable and not extensive.

Employee non-solicitation agreements

Employee non-solicitation agreements are generally permissible. The appropriate length of restriction depends on factors, such as the nature of the business, employee role, and responsibilities.

The enforceability of post-termination restrictions in Ireland is subject to certain conditions. Restrictive covenants must be reasonable and necessary to protect the legitimate business interests of the employer. The restrictions should also have limitations on time, geographic scope, and the specific activities that are restricted. The courts in Ireland will assess the reasonableness of the restrictions on a case-by-case basis.

Waivers

Agreements are enforceable. For an agreement to be enforceable, employees should be informed about their rights and given the opportunity to seek independent legal advice before signing a settlement agreement that includes a waiver of their employment rights.

Transfer of undertaking regulations in Ireland

The European Communities (Protection of Employees on Transfer of Undertakings) Regulations transpose the Acquired Rights Directive and provide for automatic transfer of employees with undertakings, or parts of undertakings, which retain their identity post-transfer. On a business transfer, there is also a duty to inform and consult with employee representatives and a prohibition on transfer-related dismissals, unless dismissal is justified on economic, technical, or organisational grounds.

Under these regulations, if there is a transfer of an undertaking, business, or part of a business, the employees affected by the transfer retain their existing terms and conditions of employment with the new employer. This includes rights and obligations arising from their employment contract at the time of the transfer.

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Speak to our team and we’re ready to guide you through the complexities of international employment.

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