How do you terminate an employee in Ireland in 2026?

The same Acts set the employee resignation notice at 1 week, once the employee has at least 13 weeks of continuous service. Below that threshold, no statutory notice is required by either side, and the contract governs. In practice, Irish employers almost always specify at least 7 days in the contract during probation.

Pay in Lieu of Notice

Pay in lieu of notice (PILON) is permitted where the contract provides for it. Worked notice is the default; where a PILON clause exists, the employer may terminate immediately on payment. PILON is treated as taxable income in Ireland. Final pay under the Payment of Wages Act 1991 must include all wages properly payable; there is no fixed statutory day-count deadline for the final payment, so the practical rule is the next regular payroll run or as otherwise agreed in writing with the employee.

Fair reasons for dismissal

The Unfair Dismissals Act requires a substantial ground for dismissal. Accepted grounds include: capability or competence (performance), conduct, redundancy, or other substantial grounds. The burden of proof rests with the employer to demonstrate both the reason and that dismissal was reasonable in the circumstances.

The procedure the WRC expects

While there is no single statutory code equivalent to the UK's Acas Code, the WRC and Labour Court consistently expect employers to follow a procedure that gives the employee notice of the concern, an opportunity to respond, a fair hearing, and a right of appeal before any dismissal decision is made. Skipping any of these steps substantially increases the risk of an adverse finding at the WRC, regardless of whether the underlying reason for dismissal is valid.

Protected-leave dismissals

Dismissal of an employee on or returning from protected leave (maternity, adoptive, paternity, parental, carer's or parent's leave) is automatically unfair with no qualifying service threshold. The same applies to dismissals connected to pregnancy. These protections sit in separate statutes and are enforced by the WRC in addition to the Unfair Dismissals Act framework.

1. Anchor the dismissal reason

   Identify a substantive ground accepted under the Unfair Dismissals Act 1977: capability, conduct, redundancy, or other substantial grounds. Document the basis in writing before proceeding.

2. Notify the employee in writing

   Set out the concern, the required standard, and the consequence of no improvement. Give sufficient detail for the employee to prepare a meaningful response.

3. Hold a fair hearing

   Invite the employee to a meeting, allow them to be accompanied by a colleague or trade union representative, and consider their response before reaching a decision.

4. Communicate the decision

   Confirm the outcome in writing, including the effective date, notice entitlement, and any redundancy or settlement payment due.

5. Offer a right of appeal

   Give the employee a genuine opportunity to appeal to a more senior person not involved in the original decision. Document the appeal outcome. Omitting the appeal step is a significant procedural failure at the WRC.

The formula expressed algebraically is: (2 x years of reckonable service) + 1 bonus week, with each week's value capped at €600/week. Reckonable service counts from the employee's start date, but service before age 16 is excluded.

Worked example

An employee with 10 years of reckonable service and a weekly salary well above the cap:

• Reckonable service: 10 years
• Statutory formula: (2 x 10) + 1 bonus week = 21 weeks' pay
• Weekly pay used in calculation: capped at €600/week
• Statutory redundancy payment: 21 x €600 = €600 x 21, stated in the calculation

The statutory payment is tax-free for the employee. Many Irish employers offer enhanced redundancy schemes above the statutory minimum, particularly in sectors where enhanced terms have become customary through collective agreements or longstanding practice. Enhanced terms that have been consistently applied over time can acquire a contractual character, so it is worth taking legal advice before deviating from prior practice.

Redundancy notification

Employees must receive written notice of redundancy. The employer submits a RP50 form to the Department of Enterprise, Trade and Employment. Employees can appeal a redundancy decision to the WRC if they believe it was not genuine.

What consultation requires

• Employee representatives must be informed and consulted. Where a recognised trade union exists, it represents employees; otherwise, employee representatives are elected specifically for the process.
• Information provided must cover the reasons for the redundancies, the number and categories of employees affected, the selection method, the procedure and its timing, and any severance terms beyond the statutory minimum.
• Ministerial notification via form RP50 is mandatory. The 30 days cooling-off period runs from the date the Minister receives the notification, not from when consultation starts internally.
• Good faith is required: the WRC and courts look at whether the employer genuinely considered alternatives to redundancy, including redeployment, voluntary redundancy, and reduced working hours.

Unlike the UK, Irish law does not prescribe a second, extended consultation period for larger-scale redundancies. The 30 days minimum applies across all collective redundancy situations. However, the WRC expects the depth of consultation to be proportionate to the scale and complexity of the redundancy programme.

Settlement of Irish employment claims commonly covers: severance payment (statutory redundancy plus any ex gratia top-up), notice pay, accrued annual leave, agreed reference wording, and a mutual non-disparagement clause. Unlike the UK model, there is no statutory requirement for the employee to obtain independent legal advice for the settlement to waive statutory claims, but the WRC will scrutinise settlements that appear to have been signed under duress or without full information.

Tax treatment

Statutory redundancy pay is exempt from income tax. Compensation for unfair dismissal awarded by the WRC is also generally tax-free. Ex gratia termination payments above the statutory redundancy amount may attract income tax: Revenue applies a statutory redundancy exemption, an increased exemption, and a Standard Capital Superannuation Benefit (SCSB) relief. The interaction of these reliefs is fact-specific and the employee should take tax advice for any meaningful ex gratia payment.

Mutual agreement terminations

Where both parties want a clean exit, a mutually agreed termination signed before any dispute is the tidiest route. This is distinct from a redundancy (which requires a genuine redundancy situation) and from a settlement of an existing claim. The terms are freely negotiated. The employer's commercial terms, the ex gratia amount, any reference wording, and any post-employment restrictions are agreed bilaterally. Teamed coordinates the documentation and payroll processing for employer-of-record employees.

Real HR and legal experts manage your Irish hires from the first offer letter through every payroll run and PAYE submission. An actual person, not a chatbot, handles your account. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice, including PRSI contributions and any statutory redundancy.

The split of responsibilities under EOR for Ireland terminations:

EOR payroll, contractor management, and future entity setup all live on one platform. An Irish contractor who converts to PAYE keeps their record, and that same employee can graduate from EOR to your own Irish entity without switching systems. Run the Crossover Calculator to see the month the model changes. EOR is the right answer for early Irish headcount, until it isn't. Start from the Ireland hiring overview.

Key sources: Workplace Relations Commission, Department of Enterprise redundancy guidance, and the Irish Statute Book.