Thursday, 15 October 2020
Department of Trade, Enterprise and Employment
13. To ask the Minister for Trade, Enterprise and Employment his plans to introduce legislation to allow for a mechanism for workers to be prioritised as creditors in the event of a liquidation in the future; if legislation that stops workers seeking redundancy in certain circumstances will be ended or extended; and if he will make a statement on the matter. [30568/20]
In a liquidation, a preferential creditor is one whose debts are deemed to be more important than the debts of another creditor. In terms of wage arrears, outstanding holiday pay, and pension scheme contributions, employees are already listed as being preferred creditors.
In relation to redundancy entitlements, it is the responsibility of the employer in the first instance to pay statutory redundancy, as well as other wage related entitlements, to eligible employees. However, the Social Insurance Fund provides a safety net for employees in situations where the employer cannot pay due to financial difficulties or insolvency.
The current law is a result of careful balancing of the various rights of creditors, including employees. Any changes made to the order of those rights will require careful consideration as it will affect the rights of other creditors, many of whom are small businesses or sole traders. The Department is currently considering proposals on the issue of collective agreements in insolvency situations.
On the second issue, Section 12A which is the emergency provision of the Redundancy Payments Act 1967, effectively suspends an employee’s entitlement to claim redundancy from their employer following certain periods of lay-off or short time work due to Covid-19. The Government was concerned that the financial impact of significant redundancy claims at this time, would have a serious impact on the potential for a business and economy to recover which in turn could result in significant insolvency and bankruptcy situations, with further permanent job losses.
The decision to extend this emergency measure to 30thNovember was a difficult one. I know many employees who have been laid off are experiencing great uncertainty.
A decision has not been made on whether this emergency provision will continue after the 30thNovember. I recently sought the views of the social partners on this issue.
In its deliberations, the Government will have regard to the social partners’ views, the criteria and principles underpinning the emergency provision and the public health and labour market situations.