Employee rights company liquidating

24-Jan-2020 10:56 by 9 Comments

Employee rights company liquidating

Generally employees are not given any statutory notice. In the short term the liquidator may retain some employees in certain parts of the business.This could be where the business requires manpower to help wind down part of the company such as a manufacturing plant.

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The court may dismiss the application if the petitioner unreasonably refrains from an alternative course of action.

Where this is the case employees will be treated as preferential creditors.

This means they will receive payment from any funds available after the liquidator has taken their fees. Any outstanding amounts in excess of this sum are treated as standard unsecured debts and may not be paid.

The Insolvency Payments Scheme is a scheme to protect pay-related entitlements of employees whose employer has become legally insolvent as defined in the Scheme.

Under the Scheme, employees may claim - - arrears of pay, holiday pay, pay in lieu of statutory notice and various other entitlements that may be owed to them by their employer.

Claims are made through the person legally appointed to wind up the business (normally the Liquidator or Receiver), who will certify the claims from the records available, and submit them to the Insolvency Payments Section of the Department of Social Protection to be processed.

When the claims have been processed, payments are made to the Liquidator, Receiver, etc., who will pay the employees concerned, having made any statutory tax or other deductions.

A Liquidator may want to keep certain parts of the business running as a going concern.

By doing this they may feel it will help preserve value before they are sold.

Certain conditions and limits apply to payments under the Scheme.

An employer is insolvent for the purposes of the Insolvency Payments Scheme if: The Insolvency Payments Scheme does not cover such cases.

The Scheme applies to employees employed in Ireland in employment that is fully insurable for social insurance purposes (this covers most employees) and whose employer is insolvent as defined in the legislation under which the Scheme operates.