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Lay-offs legislation covers insolvent firms

Legislation aimed at strengthening protections for workers whose employer becomes insolvent comes into effect today (1 July).

The legislation also provides for the setting up of a new statutory Employment Law Review Group (ELRG) that will advise the Minister for Enterprise, Trade and Employment on all aspects of employment and redundancy law.

The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 removes an exemption from notification requirements for collective redundancies caused by an employer’s insolvency.

Notification period

This means all collective redundancies are subject to a 30-day notification period before they take effect – including where the employer is insolvent.

The act also allows workers to seek redress from the Workplace Relations Commission (WRC) where their employer makes them redundant before the 30-day notification period finishes.

The department says that this change applies to all collective redundancies, not just caused by insolvency.

The legislation also obliges a liquidator or similar appointee, where they are managing the collective-redundancy process in an insolvency situation, to comply with the employer’s obligations. The WRC is given the power to prosecute those breaching this part of the act, with a maximum fine on conviction of €5,000.

‘Valuable resource’

The department says that the ELRG will include representatives of workers and employers, while ministerial nominees will be appointed following a call for expressions of interest.

Emer Higgins (Minister of State for Business, Employment and Retail) described the group as “a valuable resource”, that would ensure that the laws in this area were fit for purpose and updated to reflect emerging trends and international developments.

Amendments to the Companies Act 2014 also come into effect today, aimed at improving the quality and circulation of information available to workers as creditors.

Liquidation

The changes will ensure that workers have access, within “a reasonable period”, to a company’s Statement of Affairs filed with the court, and that provisional liquidators inform workers of their appointment, explain the liquidation process, and invite them to provide relevant information.

Dara Calleary (Minister of State for Trade Promotion, Digital and Company Regulation) said that, while Irish firms had shown a high degree of resilience, an increase in the levels of company restructuring could be anticipated.

“While the vast majority of businesses act fairly and responsibly, this act will ensure the measures that exist to protect assets from being moved beyond the reach of creditors prior to the opening of insolvency proceedings are more accessible to creditors,” he said.