Under the provisions of the Redundancy Payments Act 1967, it is the employer’s responsibility to pay statutory redundancy payments to eligible employees. However, in situations where an employer cannot sustain the cost of redundancy payments due to financial difficulties, the Department of Social Protection provides a safety net for both employers and employees and can make the statutory redundancy payment to eligible employees from the Social Insurance Fund on behalf of the employer. When such a redundancy payment is made from the Social Insurance Fund, a debt is raised against the employer. The Department of Social Protection is legally obliged to make every effort to recover the debt owed to the Social Insurance Fund.
That Department engages directly with the employer to ascertain their financial situation and their capacity to repay the debt. Each case is assessed on its own merits and where appropriate, an agreed repayment plan can be put in place to minimise financial hardship; for example, the debt can be recovered by way of instalments over a period of time. Since the start of the pandemic, the Government have been very mindful of the difficulties that employers are facing. For a time, debt reminder letters did not issue and in some circumstances debt repayments were suspended until the business is in a better financial position. If a closure situation arises, the existing debt recovery mechanisms are flexible enough to adjust the repayment arrangements, thus easing the pressures on employers.
The Department of Social Protection’s debt management policy is kept under review but any change to the policy must ensure that employer debt is recovered in full wherever possible. As a safety net already exists as explained above, there are no plans to change legislation in this regard.