Employees' rights when an employer is insolvent?

Brendan Burgess

Brendan Burgess

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What happens when a liquidator or receiver is appointed to a company?

Unpaid wages and Unpaid compensation claim e.g. Unfair Dismissal claim
Employees are preferential creditors along with the Revenue.
They get paid before the ordinary or unsecured creditors.
If there is not enough money to pay the preferential creditors in full, their claims are scaled back.

Source: [broken link removed] This might not be up to date. Such payments may be paid from the Social Insurance Fund.


Statutory Redundancy
The receiver or liquidator should certify the claim and the employee can claim directly from the Department

If the company just ceases trading, the employee has to take a claim to the Employment Appeals Tribunal to be awarded statutory redundancy before the Department can pay it.
 
According to the SIPTU article:

the ceiling on any amount payable under the Acts is periodically be indexed upwards and should always be checked;
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Does anyone know what this ceiling is?
 
The information on [broken link removed] is different from the SIPTU website

Information for Employees

An employee, or regular part-time employee, who is in employment which is insurable for all benefits under the Social Welfare Acts (in general this means an employee who pays full P.R.S.I. contributions) is entitled to claim from the Insolvency Fund with the Department of Enterprise, Trade & Employment for arrears of wages and holiday pay, redundancy and minimum notice, if the employment ceases as a result of the employer becoming insolvent.
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If you are owed wages etc and your employer is insolvent, the state will only pay you a max of 600eur a week (effective for insolvencies post 1 Jan 2005) regardless if your basic was say 750eur a week. The balance will be admitted to as a creditor claim in the liquidation.
 
The employees are "insured" for all of the claims ie arrears of holiday, wages, minimum notice and statutory redundancy up to €600 per week.

However,the Department is swamped at the moment and claims can take up to 12 weeks to process!
 
jack2009 said:
The employees are "insured" for all of the claims ie arrears of holiday, wages, minimum notice and statutory redundancy up to €600 per week.quote]

Various conditions need to be satisified for employees to be entitled to a minimum notice payment and redundancy.
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