The purpose of the insolvency payments scheme, which operates under the Protection of Employees (Employers’ Insolvency) Act, 1984, which, in turn, derives from EU Council Directive 987/80, is to protect certain outstanding pay-related entitlements due to employees in the event of the insolvency of their employer. These entitlements include wages, holiday pay, sick pay, payment in lieu of minimum notice due under the Minimum Notice & Terms of Employment Acts, 1973-2001, and certain pension contributions. Various other statutory awards made by, for example, the Employment Appeals Tribunal and Rights Commissioners, are also covered by the scheme.
Where a person’s former employer was a limited company, the company must be in liquidation or receivership in order for the person to be eligible to claim under the insolvency payments scheme. In such circumstances, the liquidator or receiver becomes the relevant officer for submitting claims as he or she has access to the company records and can certify that the amounts claimed are in order.
I am aware that there are cases where companies have ceased trading without engaging in a formal winding-up process and that in some such cases those employers may owe moneys, including the types of awards to which the Deputy refers, to their employees. Such employees are not eligible for payments under the insolvency payments scheme. I have asked my Department to review the position to establish what, if anything, can be done to progress payments to individuals in these situations.
