Willie Penrose (Longford-Westmeath, Labour)
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358. To ask the Minister for Social Protection if she will amend the Protection of Employees (Employees Insolvency) Acts, 1984 to 2006, to ensure they encompasses the definition of deemed insolvency in line with paragraph 4 of EU Directive 2008/94/EC, which ensures employees have access to the insolvency payment scheme fund administered by the Department of Social Protection; and if she will make a statement on the matter. [31398/14]

Joan Burton (Dublin West, Labour)
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The purpose of the insolvency payments scheme, which operates under the Protection of Employees (Employers’ Insolvency) Act, 1984, which, in turn, derives from EU Council Directive 987/80, is to protect certain outstanding pay-related entitlements due to employees in the event of the insolvency of their employer. These entitlements include wages, holiday pay, sick pay, payment in lieu of minimum notice due under the Minimum Notice & Terms of Employment Acts, 1973-2001, and certain pension contributions. Various other statutory awards made by the Employment Appeals Tribunal, Rights Commissioners, etc., are also covered by the scheme.

Where a person’s former employer was a limited company, the company must be in liquidation or receivership in order for the person to be eligible to claim under the insolvency payments scheme.

In such circumstances, the liquidator or receiver becomes the relevant officer for submitting claims as he or she has access to the company records and can certify that the amounts claimed are in order.

I am aware that there are cases where companies have ceased trading without engaging in a formal winding-up process and that in some such cases those employers owe monies to their employees. Such employees are not eligible for payments under the insolvency payments scheme.

My Department is reviewing the position to establish what, if anything, can be done to progress payments to individuals in these situations. In progressing this review the Department must have regard to the integrity of the Social Insurance Fund (from which insolvency payments are made). Any policy development to deal with this issue must have measures which would contain potential abuse by employers. After all, directors of companies who avail of limited liability have responsibilities under company law to ensure that proper books of accounts are kept and that the appropriate returns are made in a timely manner to relevant authorities. The Department will consult with a range of interested parties in this review including the ODCE, the Department of Jobs, Enterprise and Innovation and the Revenue Commissioners. The Department has received submissions from ICTU on the issue. In its review the Department will also have to have regard to legal issues arising in the general area of insolvency law and the potential impacts that any proposed policy development will have in that area of law.