Written answers

Thursday, 4 March 2010

Department of Enterprise, Trade and Employment

Redundancy Payments

Photo of Deirdre CluneDeirdre Clune (Cork South Central, Fine Gael)
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Question 36: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she will review an application for redundancy in respect of a person (details supplied) in County Cork; and if she will make a statement on the matter. [10909/10]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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My Department administers the Social Insurance Fund (SIF) in relation to redundancy matters on behalf of the Department of Social and Family Affairs. There are two types of redundancy payment made from the SIF – rebates to those employers who have paid statutory redundancy to eligible employees, and statutory lump sums to employees whose employers are insolvent and/or in receivership/liquidation. As I informed the Deputy in my previous reply, I can confirm that my Department received a statutory lump sum claim for the individual concerned on 4 September, 2009 claiming inability to pay on behalf of the employer.

In this case, as in all cases where the employer claims inability to pay the employee(s) statutory redundancy, the Department requires the employer to provide sufficient proof to substantiate the claim. This includes providing the latest set of audited accounts for the company as well as certification from the company's Accountant or Solicitor attesting to the fact that the employer has insufficient assets to pay the redundancy entitlements. Providing this documentation is submitted and is in order, the Department pays the employee(s) directly from the Social Insurance Fund. In this case, adequate supporting documentation from the employer was not submitted and has been requested by my Department. In the absence of the necessary documentation being submitted, the employee will be advised by my Department to take a case to the Employment Appeals Tribunal (EAT) against the employer to seek a determination establishing the employee's right and entitlement to redundancy. Once such a determination is available, this allows the Department to make payment to the employee concerned. Should the outstanding documentation be provided by the employer during the period while the case is pending a hearing before the EAT, this would allow the claim to be processed by my Department in the usual way.

Photo of Deirdre CluneDeirdre Clune (Cork South Central, Fine Gael)
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Question 37: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if there has been a change in policy regarding the payment of redundancy to employees when their former employer is not co-operating with the redundancy section of her Department; and if she will make a statement on the matter. [10910/10]

Photo of Deirdre CluneDeirdre Clune (Cork South Central, Fine Gael)
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Question 38: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if the redundancy Section of her Department now refuses to pay redundancy to employees when they encounter problems with dealing with their former employers; if they now require these employees who cannot get redundancy from their former employers to take a case to the Employment Appeals Tribunal; if so, when this policy was changed; and if she will make a statement on the matter. [10911/10]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I propose to take Questions Nos. 37 and 38 together.

There has been no change in policy in respect of the handling of redundancy claims. My Department administers the Social Insurance Fund (SIF) in relation to redundancy matters on behalf of the Department of Social and Family Affairs. There are two types of payment made from the SIF – rebates to those employers who have paid statutory redundancy to eligible employees, and statutory lump sums to employees whose employers are insolvent and/or in receivership/liquidation.

Under the relevant Acts the objective is to ensure that statutory redundancy payments due to eligible employees on being made redundant are made in accordance with the legislative provisions. The legislation places the onus, in the first instance, on the employer to discharge the obligation to pay redundancy entitlement to employees. On so doing, the employer is entitled, by virtue of the pay related social contributions made to the State, to recover 60% of the lump sum redundancy payments paid out to employees.

In instances where the employer does not formally wind the company up but goes into informal insolvency and is unable to pay the statutory redundancy entitlements, the Department seeks from the employer evidence of inability to pay the entitlements to the employees. This involves requesting a statement from the company's Accountant or Solicitor attesting to the inadequacy of assets to make the redundancy payments and the latest set of financial accounts for the company. The employer is also asked to admit liability for the 40% liability attaching to the company arising from the redundancy payments. If this information is provided to the Department, the employees are paid their redundancy entitlement from the Social Insurance Fund. Upon payment, the Department pursues the company for the 40% share, which the company would ordinarily have been expected to pay to the employees.

If supporting information required from the employer is not provided to my Department the employee will be advised by my Department to take a case to the Employment Appeals Tribunal (EAT) against the employer to seek a determination establishing the employee's right and entitlement to redundancy. Once such a determination is available, the Department is then in a position to make the payment to the employee concerned. Should the outstanding documentation be provided by the employer during the period while the case is pending a hearing before the EAT, this would allow the claim to be processed by my Department in the usual way.

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