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.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
