Employers' insolvency legislation

The Protection of Employees (Employers' Insolvency) Acts 1984 - 2004 protect certain outstanding entitlements relating to the pay of employees in the event of their employers becoming insolvent as defined in the Acts.

Subject to certain limits and conditions (including statutory time limits), money due to employees in a range of situations may be paid by the Department of Enterprise, Trade and Innovation out of the Social Insurance Fund. Instances where the Department may pay from this fund include circumstances where money due as a result of:

• Arrears of pay (including arrears of pay due under an Employment Regulation Order)
• Holiday and sick pay
• Entitlements under the minimum notice and terms of employment, employment equality and unfair dismissals legislation
• Court orders in respect of wages, holiday pay or damages at common law for wrongful dismissal.

The Insolvency Payments Scheme also protects employees' outstanding contributions to occupational pension schemes which an employer may have deducted from wages but not paid into the schemes. Unpaid contributions to an occupational pension scheme on an employer's own account may also be paid from the Fund, subject to certain limits. The Scheme applies to outstanding pension contributions for up to a year prior to the date of insolvency.

The Scheme covers employees who are over 16 years of age and are in employment which is insurable for all benefits under the Social Welfare Acts and includes those over 66 years of age who are in employment which, but for their age, would be insurable for all benefits under the Social Welfare Acts.

Implementation of Directive 2002/74/EC

The European Communities (Protection of Employees (Employers' Insolvency) Regulations SI 630/2005 amend the Protection of Employees (Employers' Insolvency) Act 1984 by including a provision to cover employees who are employed in Ireland by an employer who has become insolvent under the laws, regulations and administrative procedures of another member state. The Regulations apply to insolvencies occurring from 8 October 2005.

Employees should claim from the employer's representative (usually the liquidator or receiver) for payment of outstanding entitlements. Application forms to claim outstanding entitlements under the insolvency scheme are available here. 

Disputes regarding most entitlements under the Acts may be referred to the Employment Appeals Tribunal. You can download the complaint form TC-1 here (pdf) or request it from the Employment Rights Information Unit.

For further information see the Department of Enterprise, Trade and Innovation's booklet Guide to the Insolvency Payments Scheme (pdf)