I am mindful of the plight of the employees involved and, indeed, I have met with the Unite trade union on the matter. The Department has also engaged with the Revenue Commissioners and this engagement is continuing. More generally under the provisions of the Protection of Employees (Employers’ Insolvency) Act 1984, a company is regarded as being insolvent if: the company is placed into receivership; a winding-up order has been made; or a resolution for the voluntary liquidation of the company has been passed.
The Act does not cover what is known as ‘informal’ insolvency where employers cease trading without engaging, as required by law, in any formal wind-up process or where creditors, including employees, do not seek or pursue a liquidation and distribution of assets through the Courts. This is the situation which applies to the company referred to by the Deputy.
The Department is continuing to review the situation of informal insolvency. There are many difficult and complex company and employment law matters to be considered. The Department is considering legal advice on the matter and the possible impacts that any potential policy developments could have on existing legislation. In addressing this we must find a sensible and proportionate approach that does not inadvertently diminish employee rights or impose an unnecessary cost to the exchequer by facilitating a process whereby employers can avoid their obligations to staff.
The Department is consulting with a range of concerned bodies, including the Office of the Director of Corporate Enforcement, the Department of Business, Enterprise and Innovation and the Revenue Commissioners on these issues.
In addition, the Department continues to engage with the two reviews of employment and company law which were initiated by the Minister for Business, Enterprise and Innovation on foot of the Clery’s closure.
There are also a number of legal cases under consideration by the Courts at the moment, the outcome of which will have a bearing on this matter.
I trust this clarifies the matter for the Deputy.
