Dáil Éireann Debate, Thursday - 21 March 2024
193. Deputy Seán Canney asked the Minister for Enterprise, Trade and Employment what supports are in place for employees who are owed wages and holiday pay from an employer who has closed down its business and is no longer contactable; and if he will make a statement on the matter. [13466/24]
View answerIreland has a robust suite of employment rights legislation in place to protect and support workers.
Statutory and contractual employment terms apply in relation to the payment of wages. Failure to pay all or part of the wages due to an employee is considered an unlawful deduction and a complaint can be made under the Payment of Wages Act, 1991.
The Payment of Wages Act 1991 establishes a range of rights for all employees in relation to payment of wages. The Act regulates how wages and salaries are paid and what deductions may be made from same. Under this Act, an employer is not permitted to make deductions from an employee's wages unless the deduction is authorised under the contract of employment, required by statute, or is made with the prior written consent of the employee.
If an employee believes that their employer has made an unlawful deduction from their pay, then they may refer a complaint to the Workplace Relations Commission (WRC).
It is unclear from the question whether the company is insolvent or has gone into liquidation but either way, the employees are entitled to pursue a claim for non-payment of wages either from the employer or the liquidator as the case may be.
In situations where an employer is legally insolvent and the company is being wound up, such as entering liquidation or receivership, the State provides a safety net by way of the Insolvency Payments Scheme, which protects certain outstanding pay-related entitlements due to employees in the event of their employer’s insolvency. The liquidator or receiver can submit claims to the scheme on behalf of employees in respect of various outstanding debts, including arrears of wages, holiday pay and statutory minimum notice.
The scheme is administered by the Department of Social Protection and payments are made from the Social Insurance Fund. The arrears of wages, holiday pay and minimum notice payable under the scheme are subject to a ceiling of €600 per week and are limited to 8 weeks.
My Department is currently developing legislation to expand access to the Insolvency Payments Scheme to also, in certain circumstances, include former employees of an employer who has ceased trading but has not formally wound up their company.
Finally, employees may also have an entitlement to statutory redundancy depending on their length of service with the employer. It is the employer’s responsibility in the first instance to pay statutory redundancy to eligible workers. If employers are genuinely unable to pay redundancy due to financial difficulties or insolvency, the State may make the statutory redundancy payments on the employer’s behalf from the Social Insurance Fund through the Redundancy Payments Scheme. The scheme is also administered by the Department of Social Protection.
