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Collective Redundancies and Insolvency

Ministers Dara Calleary and Neale Richmond have welcomed government approval for the priority drafting of legislation to enhance the protection of employees in collective redundancies following insolvency by providing for a number of steps including:

1. The establishment of a new statutory Employment Law Review Group which will advise the Minister on all aspects of employment and redundancy law.
2. Make provision to strengthen the already robust legislative protections and safeguards afforded to the employees involved.
3. Delivering on remaining important Programme for Government committments in the Plan of Action on Collective Redundancies following insolvency which was published in June 2021.

Current proposals include:

Amendments to the Protection of Employment Act 1977

The Protection of Employment Act 1977, which governs collective redundancy rules, will be amended to:

1. Remove the exemption from notification requirements in respect of collective redundancies caused by the employer’s insolvency. This means all collective redundancies will be subject to a 30-day notification period before they take effect, including where the employer is insolvent.
2. Provide that employees may seek redress from the Workplace Relations Commission (WRC) where their employer makes them redundant before the 30-day notification period finishes. This change will apply to all collective redundancies, not just those precipitated by insolvency. This is in addition to employees’ existing right to make a complaint to the WRC should their employer fail to consult with or provide information to their representatives.
3.Align the 1977 Act with case law of the Court of Justice of the European Union (CJEU), by explicitly providing that the employer’s obligations must also be complied with by a liquidator or similar appointee, where they are managing the collective redundancy process in an insolvency situation.
4.Provide that, where a liquidator or similar appointee is managing the collective redundancy process in an insolvency situation and they fail to comply with their duties under the Act, the WRC may prosecute them, with a maximum fine on conviction of €5,000.
5.Update the methods by which employers can notify the Minister of proposed collective redundancies.

Amendments to the Companies Act 2014

It is proposed that the Companies Act 2014 will be amended to:

1.Improve the quality and circulation of information to workers as creditors such as ensuring they have access, within a reasonable period, to the company’s Statement of Affairs which is filed with the court and ensuring the provisional liquidator informs them of his/her appointment, explains the liquidation process and invites them to provide relevant information.
2.Ensure remedies for transactional avoidance are more accessible to creditors.

A full copy of the press release can be found here https://lnkd.in/egapB_vj

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