See also ‘Redundancy payments in Ireland’ and ‘Taxation of Redundancy Payments’.
Ex-gratia redundancy pay is the payment of an additional lump sum which is over and above and in addition to one’s statutory redundancy entitlements. If an employee is made redundant, they qualify for statutory redundancy pay. This is once they have 104 weeks of continuous reckonable service or more with the employer in question.
Statutory redundancy pay amounts to two week’s pay per each year of service, plus one bonus week. Thus, if an employee has exactly three years’ service they're entitled to [(three years x two weeks) + one bonus week) = seven weeks redundancy pay.
The weekly pay is based on the normal weekly wage earned by that employee during their employment, including commission or other varied payments, but it is subject to the statutory ceiling of €600 per week. Thus, if the employee with three years’ service earned €800 a week then their statutory redundancy is capped at (seven weeks x €600) = €4200.
Any part years’ service should be included when calculating the employee’s redundancy entitlement. Employers may, if they so wish, pay an employee who is being made redundant an additional ex-gratia lump sum. To do so is entirely discretionary and if the employer does wish to provide an additional ex-gratia payment then the amount to be given is also discretionary. Importantly, any ex-gratia payment given does not qualify for a redundancy rebate. For more on this, see ‘Redundancy Rebate’
