The Redundancy Payments Act 1967 outlines the circumstances whereby a redundancy situation occurs. It is a matter for the employer in the first instance to determine whether or not there is a redundancy situation. Disputes in this regard can be referred to the Workplace Relations Commission.
An employee who is dismissed for any reason other than redundancy is not entitled to a statutory redundancy payment.
The purpose of the insolvency payments scheme is to protect certain outstanding pay-related entitlements due to employees in the event of the insolvency of their employer. The scheme operates under the Protection of Employees (Employers’ Insolvency) Act 1984, which derives from EU Directive 2008/94.
The employer representative, such as the official liquidator or receiver, may apply to the scheme on the employee's behalf for certain outstanding wage related entitlements, including statutory employment rights awards.
The 1984 Act does not provide for situations where an employer ceases to trade without engaging in any formal wind-up process. In such cases, referred to as ‘informal insolvency’, former employees may have monies owed to them without having a legal mechanism to claim same from the Social Insurance Fund. While I do not know the full details of the employer in this case, it would appear that this is the situation here.
Responsibility for this policy area has recently transferred to the Department of Enterprise, Trade & Employment from the Department of Social Protection and officials in my Department are currently working with legal advisors to identify potential solutions for ex-employees who find themselves in such a situation. This work includes how to provide a mechanism that would allow employees in informal insolvency situations access the insolvency payments scheme. There are a number of complex issues to be addressed as part of this process and the work is being done as a priority.
