Following detailed and prolonged examination of the whole matter raised in this question, I have concluded that it would not be feasible to make regulations on the lines suggested to extend the scope of the 1984 Act to so-called informal insolvencies. There are a number of issues involved which could give rise to difficulties. The main reason, however, for my decision is that I have received legal advice to the effect that it would not be feasible by regulation to extend and implement any definition of employer's insolvency beyond those categories set out in section 1 (3) of the Protection of Employees (Employers' Insolvency) Act, 1984. Primary legislation would be necessary for that purpose.
To illustrate further the problem involved, it has been established in the course of the examination which has taken place that any extension of the definition of an employer's insolvency could not be implemented solely for the purpose of payments due to employees under the 1984 Act. An employer could not be deemed to be insolvent for one limited purpose only without reference to wider implications. This brings the whole matter into the area of general legislation governing insolvency, which is obviously very complex.
Another major difficulty would be in determining which particular employers falling outside the existing definition set out in section 1 (3) of the 1984 Act were genuinely insolvent. This is the sort of decision which under present legislation relating to insolvencies is a matter for the courts. It would not be appropriate or feasible to provide for such determination to be made by way of regulations to be implemented by the Minister for Labour.
The reasons stated in the question for the inability of certain employees to benefit under the 1984 Act are based on misunderstanding and oversimplification of insolvency law and of the functions and powers of my Department in relation to the institution of insolvency proceedings.
