Policy on the Management of Redundancy Costs on Research Grant and Projects

Transcription

1 Policy on the Management of Redundancy Costs on Research Grant and Projects Following recent presentations to the Research Committee by the Director of Human Resources and the Staff Relations Manager concerning the issue of redundancy, (Research Committee Minutes RS/11-12/46 and RS/11-12/60 refer), the following policy, effective immediately, sets out the related issues associated with capturing such costs arising in respect of research grants and projects. The definition of the term Redundancy, in accordance with the Redundancy Payments Act , is set out in Appendix A attached and highlights the circumstances around which redundancy arises, including legislative Statutory Redundancy Payments, the Redundancy Process in College and a conservative guide to calculating an annual provision in terms of possible redundancies of fixed term contract staff and staff with contracts of indefinite duration. In the future, provision for redundancy costs is to be included in research applications, the only exception to this being applications whereby the Funding Agency in question has clarified that this type of cost is considered ineligible set out in Appendix B (this information is subject to change however, as we receive further clarification over time from various Funding Agencies). This provision/cost will be separately identified from the personnel budget in financial reports to PI s and the sum provided will be ring-fenced for redundancy purposes only. Where a redundancy arises, the provision(s) made will be released subject to Human Resources providing written instruction in this regard along with the contract history of the individual to ensure redundancy costs accrue to the individual in accordance with their grant/project employment history and are correctly split between relevant Schools (where applicable) on a pro rata basis over the full term of employment. In situations whereby the Funding Agency in question considers the provision for redundancy payments ineligible from the outset, the default position is such that the liability will fall to the School, to be met from the Schools Indirect Cost earnings as a first call, and the School thereafter. In this context, it is important therefore that Schools review their potential exposure in this regard, with appropriate advice(s) from Human Resources, to build the necessary provision required to meet the anticipated costs. Specific questions concerning redundancy can be addressed directly to Human Resources as follows: hr@tcd.ie and/or the relevant Faculty HR Advisor.

2 Appendix A Management of Redundancy In General A redundancy situation is defined as occurring when there is a dismissal of an employee by an employer, not related to the employee concerned, and the dismissal results wholly or mainly from one of the following situations: (a) Where an employer has ceased, or intends to cease, to carry on the business for the purposes for which the employee was employed by him, or has ceased or intends to cease to carry on that business in the place where the employee was so employed; or (b) Where the requirements of that business for an employee to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish; or (c) Where the employer has decided to carry on the business with fewer or no employees whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employers or otherwise; or (d) Where an employer has decided that the work for which the employee has been employed (or had been doing before his dismissal), should henceforth be done in a different manner for which the employee is not sufficiently qualified or trained; or (e) Where an employer has decided that the work for which the employee has been employed (or had been doing before his dismissal) should henceforth be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained. In the first instance it is the post to be made redundant that should be identified, not the individual. The foregoing circumstances apply equally to fixed term and contract of indefinite duration employees. Selection Once the post has been identified it is necessary to establish if this will result in an employee being made redundant. Where this is the case, it does not automatically follow that it is the post-holder who will be made redundant. In identifying an employee for redundancy, Under the legislation employers are obliged to give due consideration to whether there are other employees in similar

3 posts with whom the employee could compare in terms of skills, qualifications and length of service. In addition, alternative options to redundancy should be considered. These may include alternative work, reassignment and/or reduced hours. Where an employee is to be made redundant, written notice to this effect must be given to the employee in accordance with the notice period set out in the individual s contract of employment or as prescribed under the Minimum Notice and Terms of Employment Act, 1973 whichever is the more favourable to the employee. Statutory Redundancy Payment In certain circumstances employees who are made redundant are entitled to receive a Statutory Redundancy Payment. To be eligible for a payment under the Redundancy Payments Act, an employee must: be aged 16 and over be in insurable employment (A1 PRSI stamp) have worked continuously for at least 104 weeks Currently, statutory redundancy payments are calculated on the basis of two weeks pay per year of service plus one additional weeks pay, with a ceiling of 600 on weekly reckonable earnings (i.e. ceiling of 1,200 per year of service). Statutory redundancy payments are tax free. It should be noted that all College service, including previous service attained in working in other Schools/Areas may be reckonable for the purposes of calculating the redundancy payment due. Employees may not be entitled to receive a payment if they have unreasonably refused an offer of suitable alternative employment. Applications for Redundancy Payments are processed through the Staff Relations section in HR and charged to the relevant school/area. It should be noted that in most cases, the College is entitled to a rebate of up to 15% of the statutory redundancy costs from the Department of Enterprise Trade and Employment. Applications for rebates are processed through Staff Relations and refunded to the relevant school/area.

4 Redundancy Process PIs/Heads /Managers should alert the Faculty HR Advisor and/or Staff Relations to potential redundancy situations i.e. staff with greater than two years service and whose contracts are not being renewed. Such contact should be made in good time having regard to the employee s contracted notice entitlement, which will generally require notice to be issued at least one month in advance of the proposed date of termination at the very latest. In respect of staff members on indefinite duration contracts linked to external funding, the relevant PI/Head/Manager should alert HR Staff Relations as soon as the potential for redundancy is known. In conjunction with the relevant Head/Manager, Staff Relations will confirm whether a redundancy situation exists. Where it has been determined that the situation is a genuine redundancy and the employee to be made redundant has been identified the following steps should be implemented. The employee should be advised both verbally by the PI/Head/Manager and in writing of the change that impacts on the post he/she holds, the reasons for this, and the consequence that the post is to be made redundant. Staff Relations will assist PIs/Heads/Managers in drawing up the notice of termination to the staff member concerned, including details of any applicable redundancy payment and any other outstanding payments due e.g. unused annual leave etc. Possibilities for alternative employment within the school/area should be explored by the relevant PI/Head/Manager Options for continued employment within College should also be explored with the staff member. The staff member should be informed of any suitable vacancies in the College for which they may compete. The staff member should be encouraged to contact a member of the HR Recruitment team who will provide assistance and advice on his/her application for any vacant position. Where alternative employment cannot be identified and the staff member is eligible to receive a redundancy payment:

5 Staff Relations should be advised in writing/by by an authorised school/area staff member of the relevant charge code to be used in respect of the redundancy payment (i.e. normally the staff member s pay code). Staff Relations will examine the individual s personnel file to take account of all reckonable service for redundancy calculation purposes. Staff Relations will assist the relevant manager in completing Section A of the RP50 Form which may be obtained from: ( The completed form should be handed to the staff member by the Head/Manager, along with the letter of notice. A member of HR will arrange to meet with the employee on the termination date. At that point Section B of the RP50 form will be completed and signed, a copy of which will be given to the employee along with the redundancy payment cheque. HR Staff Relations will submit the original RP50 form to the Redundancy Payment Section, Davitt House, Dublin 2 to claim the 15% employer rebate which is credited to the School/Area upon receipt. It would be prudent for each School/Area to make provision for 1,200 each year in respect of possible redundancies of fixed term contracts and staff with contracts of indefinite duration where it is likely that the circumstances set out at 1 above will apply. If a staff member secures alternative work in the College, obviating the need to pay statutory redundancy at that point, but where a redundancy may arise at a later date, the stored sum should be retained by the School/Area for a period (say 3 years) as a contribution to the individual s future possible redundancy payment. For new hires or contract extensions, particularly those supported by external funding bodies which do not currently provide for redundancy costs, consideration should be given to reducing the proposed length of contract, or salary, on offer to take account of the statutory redundancy payment. Queries in relation to the redundancy process should be directed to Mary Leahy, HR Staff Relations at or leahyme@tcd.ie.