asked the Minister for Labour if he proposes making regulations under section 4 (2) of the Protection of Employees (Employers Insolvency) Act, 1984, which set out the circumstances in which employers may be regarded as insolvent under the Act.
Written Answers. - Protection of Employees Act.
19.
The possibility of making regulations under section 4 of the Protection of Employees (Employers' Insolvency) Act, 1984, is still under consideration.
My Department has recently received legal advice on certain aspects of the matter, but a considerable number of legal and administrative difficulties remain to be resolved. The first problem is that, in order to apply the Act in an individual case, it would be necessary to declare the employer concerned insolvent. Obviously, this would have major implications so far as the employer's rights are concerned. The declaration of an individual to be insolvent, even for the limited purposes of the Act, would also represent a radical departure from current practice governing insolvency procedures.
There are basic problems in relation to the definition of the types of cases which might be covered by regulations, as well as problems of verification of the existence of a state of insolvency in individual cases not covered by the normal legal provisions governing insolvency situations. Even where it can be established that a state of insolvency exists, there are considerable problems about devising arrangements for verifying individual entitlements of employees. For example, employers may have ceased business or gone away and employment records may be inadequate or non-existent.
It will be appreciated that any scheme involving the making of payments from the redundancy and employers' insolvency fund would have to be soundly based, legally and administratively with adequate safeguards against abuse. The problems which I have outlined must, therefore, be satisfactorily resolved before any scheme can be introduced. At this stage, I am unable to say whether those problems can be resolved.