Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

My Department is responsible for compensating employees for the loss of their jobs where their employer is unable to pay statutory redundancy due to financial difficulties or insolvency. Payments are made from the Social Insurance Fund, essentially from the PRSI contributions paid in by those in employment, employers and the self-employed.

Following the liquidation of Clerys in June 2015, more than €2.5 million was paid under the Department’s redundancy and insolvency payment schemes to 134 former employees. Arising from the Clerys liquidation, the Department of Jobs, Enterprise and Innovation initiated a twin-track examination of protection law for employees and unsecured creditors to ensure in particular that limited liability or company restructuring were not used to avoid a company’s obligations to its employees and creditors. The Government recently published one of these reports, by Nessa Cahill and Kevin Duffy. It is my firm view that employers must adhere to the letter and spirit of both company and employment law.

My Department is currently considering how the provisions of the Companies Acts, including section 599 of the Companies Act 2014, might be used to recover the moneys expended from the Social Insurance Fund. Consideration of legal action by my Department must take into account a number of factors, including the burden of proof required, the likely costs and duration of a legal action, and the level of assets, if any, that might be recovered if an action were successful. Officials from my Department are discussing this approach with the Attorney General's office and with senior counsel to seek legal advice, as there is no precedence in Irish case law on this specific provision.

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