Legal Eagle: Recently made Redundant

Q: I was recently made redundant. I had been employed by that company for a number of years. I’ve just found out however that the firm has been made insolvent. I am at a loss what to do. I am still owed wages and holiday pay, and I’m afraid that any chance of getting my redundancy money has gone out the window.

A: Unfortunately, this is becoming an increasingly common scenario. Fortunately, there is legislation in place which provides protection to employees in this very situation through the Insolvency Payments Scheme and the Redundancy Payments Scheme.

If an employer has become legally insolvent, employees can claim a wide range of entitlements covered by the Insolvency Payments Scheme (subject to certain limitations) including arrears of wages, holiday pay and deductions which have not been paid over by the employer e.g. health insurance.

Employees should also be aware that they can claim for pay in lieu of notice and compensation awarded by the Employment Appeals Tribunal. Entitlements based on pay are limited to a maximum weekly rate of €600 and there is a limit of eight weeks pay for outstanding wages, sick pay or holiday pay.

Your statutory redundancy entitlements are protected under the Redundancy Payments Scheme. In determining the amount payable, the calculation of a week’s pay is also subject to the €600 ceiling.

You should ensure that details of your claim are promptly provided to the liquidator or receiver appointed to the company who should then forward the claim to the Department of Enterprise, Trade and Employment for processing and payment.

Marguerite Glynn is an associate at Brian O’Donnell & Partners