Time to play fair with those losing their jobs

Vested interests cover most of the available ground when it comes to pre-budget submissions. All sectors plead the case. Between them, they will argue for taxes under all headings to be reduced and for all reliefs, benefits and incentives to be increased.

So familiar are the annual refrains that there are times when you wonder whether Government simply tunes out the noise, paying the myriad submissions no heed at all.

It was refreshing then to hear a case being made for something that Cantillon does not recall ever featuring in the pre-budget merry-go-round – redundancy payments.

It seems astonishing that payments designed to soften the blow of losing your job are almost unique in having remained untouched for so long. Welfare payments rise annually and tax bands are also habitually adjusted upwards but the value of redundancy payments to those unfortunate enough to lose their jobs has fallen dramatically in real terms.

Statutory redundancy – the minimum protection that all workers are entitled to on losing their jobs if they have been employed for at least two years – pays out two weeks’ wages per year of service plus one additional week of pay.

But, here’s the thing. That pay is capped at €600 per week, regardless of what you actually earn. That figure has not budged since it was set on January 1st, 2005.

The most recent figures from the Central Statistics Office show just how out of kilter that number is with the reality of the modern workplace. In the first quarter of this year, average weekly earnings stood at €969.12. That’s the average, remember, For many people, weekly earnings would be significantly higher.

However, if they are unlucky enough to lose their job and as they scramble to figure out how to meet their bills, they are being paid on the basis of a formula that has not changed in almost 20 years.

Connect, the largest engineering trade union in Ireland and the second largest in manufacturing, representing about 40,000 workers, this week called on the Government to look again at that figure as it negotiated on behalf of some members who will lose their livelihoods as their employer shuts its Irish operations.

“You need to be revisiting it from time to time and that’s now long overdue,” said Connect general secretary Paddy Kavanagh.

Amid all the clamour for other tax cuts and spending increases, it seems fair that those already losing their regular income should have their redundancy pay set against a more relevant weekly wage.

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Today’s most read

1. Rhasidat Adeleke into the Olympic 400m final after ‘messy’ semi-final where she did just enough
2. ‘I’m still pinching myself’: Limerick man goes to Olympics, takes two gold medallists home
3. Woman murdered in Nenagh to be buried near where she grew up in Tipperary
4. Irish director of WHO polio programme dies while on holidays with family
5. Kellie Harrington: ‘The next chapter is going to be my life chapter. It’s for me and Mandy’

Inside Business podcast

In Inside Business, Ciarán Hancock talks to Denis Pio Moriarty who, with other family members, runs the family craft shop and restaurant in Kerry's Gap of Dunloe. Heavily reliant on US tourists, Moriarty's was one of the first companies to use the Government's new small business Scarp rescue regime after Covid-19 eviscerated the business and is now thriving again, and looking to expand its business beyond the Gap of Dunloe. He talks about the Scarp experience.

Highlights this week

• Pilita Clark: With birth rates plummeting in the US and other rich economies across the world and an increasing number of childless couples deciding they simply do not want to go down that path, Pilita Clark says recently reported comments by US vice-presidential nominee J D Vance are reckless. They may not have children but they do have a vote .
• Personal Finance: In your 30s, there are no shortage of calls on your income but, writes Joanne Hunt, it really is time to start thinking seriously about saving for your retirement . With people now living more than 20 years in retirement, an early start is essential if your pension is going to sustain you.
• Commercial Property: Ulster Bank’s landmark premises in College Green in Dublin city centre looks set to be transformed into a new boutique hotel following its purchase by Donegal couple Brian and Sally McGill for about €17 million, or some €3.5 million over its guide price.
• Technology: At the time, Intel's then boss Paul Otellini felt the numbers did not add up but, in hindsight, the chipmakers decision to play hardball on price with Steve Jobs as he sourced materials for the soon-to-be-released iPhone was the first step in an 18-year decline for the once dominant tech group, writes Ciara O'Brien.

One to Watch

There's always interest in the residential property price index which comes out on Wednesday but the bigger issue on the horizon is confirmation of just how many jobs will go from Intel's Irish business. We're not sure exactly when those details will be out but it is likely to be sometime over the next week. That aside, with the country very much in holiday mode, the attention for the rest of this week at least will focus more on the exploits of the remaining Irish contenders at the Paris Olympics, especially Rhasidat Adeleke.

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