Tuesday, 10 June 2014

Questions (101, 298, 309)

Peadar Tóibín

Question:

101. Deputy Peadar Tóibín asked the Minister for Social Protection if she will extend the definition of insolvency under the Protection of Employees (Employers' Insolvency) Act 1984, section 4(2) to provide for a situation of informal insolvency to enable employees access the insolvency payment scheme where an employer fails to wind up a company as has happened in the case of a company (details supplied); and if she will make a statement on the matter. [23801/14]

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Michael Healy-Rae

Question:

298. Deputy Michael Healy-Rae asked the Minister for Social Protection her views on correspondence (details supplied) regarding the closure of a company; and if she will make a statement on the matter. [24685/14]

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Mick Wallace

Question:

309. Deputy Mick Wallace asked the Minister for Social Protection her plans to address the legal loophole regarding the definition of insolvency in the Protection of Employees (Employers' Insolvency) Acts 1984 to 2006 which has resulted in workers in several companies being left without wages when employers cease trading but do not go into liquidation, receivership or wind up the company; and if she will make a statement on the matter. [23800/14]

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Written answers (Question to Social)

I propose to take Questions Nos. 101, 298 and 309 together.

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 the Employment Appeals Tribunal, Rights Commissioners, etc., 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 owe monies to their employees. Such employees are not eligible for payments under the insolvency payments scheme. My Department is reviewing the position to establish what, if anything, can be done to progress payments to individuals in these situations.

I want to assure the deputy that officials from my Department have been in contact with representatives of the former employees of the company to which Deputy Tóibín refers and they are actively engaging with the workers in order to process exceptional needs payments and any other relevant applications as quickly as possible.