I welcome the Minister of State, Deputy Richmond, and officials from the Department. He has ten minutes.

I am pleased to present the Protection of Employees (Employers’ Insolvency) (Amendment) Bill 2025 for consideration on Second Stage. I do so on behalf of the Minister of State, Deputy Dillon, who unfortunately has had a family bereavement but this not unfamiliar legislation as I was the Minister of State responsible when the general order of the scheme was presented. This Bill makes changes to the insolvency payments scheme. This scheme fulfils the vital function of protecting workers if their employer becomes insolvent. It covers certain pay and pension-related entitlements an employee may be owed by their insolvent employer. Payments under the scheme are made from the Social Insurance Fund. This scheme is governed by the Protection of Employees (Employers’ Insolvency) Act 1984, as amended. This protection stems from European law, currently Directive 2008/94/EC. Access to the protections of the insolvency payments scheme is contingent on the employer being insolvent. Insolvency is currently defined in the Act as where the employer is in liquidation, receivership, bankruptcy, has died and their estate is insolvent or is insolvent under the laws of another EU member state or the United Kingdom. There are gaps in the legislation that this Bill will address. In rare cases, a business may cease trading but fail to fully wind up, sometimes referred to colloquially as informal insolvency. When this happens, former employees are unable to recover moneys owed to them under the insolvency payments scheme. The Supreme Court found in the case of Glegola that this does not meet the directive’s requirements. To address this gap, the Bill provides for a new deemed insolvent process. Using this new process, an employee can apply to have their employer deemed insolvent for the sole purpose of enabling the employee to access the insolvency payments scheme.

The Bill has four main policy objectives. The first is to address the Glegola Supreme Court decision and ensure Directive 2008/94/EC is fully transposed into Irish law. The second is to align the scheme with broader Government policy on personal insolvency. The third is to provide policy certainty in how the salary ceiling applies to payments under the scheme. Finally, the Bill was also amended on Committee Stage to clarify how certain pension contributions are protected under the scheme. I will outline the main provisions of the Bill. The Bill consists of 13 sections divided into three Parts. Part 1 contains three sections and deals with preliminary and general matters. Part 2 contains nine sections. It amends the Protection of Employees (Employers’ Insolvency) Act 1984. Part 3 contains one section, which amends the Employment Equality Act 1998. This change ensures awards of the Circuit Court for gender discrimination are covered by the scheme. This corrects a 2015 amendment that inadvertently omitted such awards from the scheme’s scope.

The Bill’s first policy objective is to deliver a new deemed insolvent process. This is primarily set out in section 6 of the Bill with consequent changes arising in the remaining sections of Part 2. I have explained why the new deemed insolvent process is required. I will now outline how it will work in practice. The employee will first have to serve notice on their employer and give them the opportunity to repay any moneys owed. If the employer fails to pay, the employee can activate the deemed insolvent process. Officials will examine whether the employer has ceased trading, drawing on the employee’s application, existing State data and any input from the employer. If the evidence shows an employer has ceased trading, the employer will be deemed insolvent solely for the purpose of that application. The employee will then be able to obtain moneys owed to them under the insolvency payments scheme. The new deemed insolvent process has been designed to be as straightforward as possible for employees. This will include straightforward application forms using plain English and clear step-by-step instructions. A representative such as a trade union or trusted family member can also apply on the employee’s behalf. We have put safeguards into this process both for employers continuing to trade and for taxpayers’ money. I am also providing for a separate historical deemed insolvent process. This is to ensure any employees in this situation before this Bill is enacted and commenced are not disadvantaged by the previously incomplete transposition of the directive. It will cover historical cases where an employee was owed money by an employer who failed to formally wind up their business. This covers claims spanning from the original directive transposition date of October 1983 up to the commencement of this Bill. The historical deemed insolvent process will be open for two years following the Bill’s commencement. A further extension of two years is possible in exceptional circumstances outside the employee’s control. The Department of Enterprise, Tourism and Employment will run a comprehensive communications campaign to ensure affected employees are aware of this process before the Minister commences this historical deemed insolvent process.

The Bill’s second policy objective is to align the scheme with broader personal insolvency policy. Several new types of insolvency arrangements were introduced in 2013 as an alternative to bankruptcy. The Minister is expanding access to the scheme to cover employees of sole trader employers who avail of these arrangements. I expect the number of employees and employers affected by this change to be very low. However, it is important that the State’s broader policy on insolvency is in alignment. The change is set out in sections 4, 5, 7 and 8 of the Bill. A salary ceiling of €600 per week applies to most payments under the insolvency payments scheme.

The Bill’s third objective is to standardise the application of this salary limit to all payments. This change gives a statutory basis for the previous long-standing practice governing scheme payments which was found to be ultra vires in the Court of Appeal judgment in the Brady case. This change will ensure all applicants are treated consistently. It will ensure minor differences in the wording of adjudications for employees receiving similar awards in comparable situations will not give rise to significant differences in their entitlements under the scheme. This change is set out in section 7 of the Bill.

The Bill's fourth policy objective relates to how pension contributions are covered under the scheme. This was introduced on Committee Stage. This section ensures that contributions to My Future Fund, the new auto-enrolment retirement savings scheme, are covered under the scheme in the event of the employer’s insolvency. This removes any doubt about whether such contributions are covered. This section also changes how employer contributions to defined benefit pension schemes are protected under the scheme. The Bill sets out limits to the amount that may be paid in respect of employer contributions to a defined benefit scheme. This change puts in place reasonable limits to ensure the Social Insurance Fund is not liable for excessive defined benefit pension debts or the entire deficit of defined benefit schemes. It ensures the amount the taxpayer is required to pay via the Social Insurance Fund is not determined by an individual pension scheme’s rules. These changes do not affect other types of pension schemes such as defined contribution pension schemes or PRSAs. This is set out in section 8 of the Bill.

To conclude, while the Bill itself is quite complex and technical, its objectives are clear. The Bill will further enhance the protection of employees when their employer becomes or is deemed insolvent. Most importantly, it will expand the protections of the insolvency payments scheme to employees of employers who cease trading without formally winding up their business. It will deliver a time-limited historical deemed insolvent process allowing people to claim entitlements which arose prior to this Bill. It will ensure the salary limit applies to all payments under the insolvency payments scheme in the same way, ensuring certainty of outcome and consistency of treatment for all applicants. It will ensure that there are reasonable limits on taxpayers’ liability to cover pension contributions and that My Future Fund contributions are protected under the scheme in the same manner as any other pension. I look forward to debating the merits of this important Bill and to working with Senators from all parties and none to ensure its swift enactment. I commend this Bill to the House.

I thank the Minister of State for being here today. Sometimes when we get opening speeches, I find them hard to follow and understand. The Minister of State's opening statement very much explained what we are talking about today in an informative way for businesses and employees.

Rather than going through a lot of what was said, I will set out a few points myself. The Protection of Employees (Employers' Insolvency) (Amendment) Bill 2025 is important because it provides greater protection for employees in the event of their employer's insolvency, ensuring they can access pay-related entitlements. It amends the insolvency payments scheme, as the Minister of State mentioned, allowing employees to claim for arrears of wages, holiday pay and other entitlements owed by insolvent employers. It addresses historical entitlements not previously covered, rectifying a 40-year gap in Irish law in the protection of employees. It establishes a legal mechanism for employees to seek financial redress if their employer ceases trading, thereby enhancing their rights and protections. This legislation is crucial for safeguarding employee rights and ensuring they receive the benefits they are owed in the event of the employer's insolvency.

I will give an example. We have Linda's Florist, a small flower shop employing four staff that suddenly shuts because Linda, the owner, becomes seriously ill and cannot continue operating. The owner never formally goes into liquidation; she simply locks the shop and stops trading. In a situation like this, what would have happened under the old system without this Bill? The employees would have been stuck. They could not have claimed unpaid wages from the State because the employer had not legally entered insolvency. They might have lost important holiday pay, unpaid minimum notice and other entitlements that were unpaid. What happens under this Bill, though, is that each employee will send the owner, Linda, a prescribed notice listing money owed, for example, three weeks' pay or holiday pay. If nothing is paid within eight weeks, that person would apply to the Minister for Enterprise, Tourism and Employment to have the employer deemed insolvent. When the employer is deemed insolvent, employees gain full access to the insolvency payment scheme, which reimburses them for unpaid wages, holiday pay, unpaid minimum notice and pension arrears up to €600 per week. The State pays these entitlements directly through the Social Insurance Fund. The outcome will be that the staff in Linda's Florist would recover much of what they are owed, even though the owner never entered a formal insolvency process. I am delighted this legislation has passed through all the relevant Stages so far and I welcome the legislation coming to the House today.

I thank the Minister of State for being here. When we were here last year and there was the big debacle about Fastway and the protests outside, my heart went out to the employees caught in the middle of all that. Even running a business myself, I was thinking of whether there was any mandatory insurance or similar requirement that could be placed on the employer to ensure an employee can never be caught in that situation again.

I know the Supreme Court found in 2018 that Article 2(1)(b) of Directive 2008/94/EC was not properly transposed into Irish law. That had created a situation whereby employees of employers who ceased trading without formally winding up could not access the Social Insurance Fund to obtain reimbursement. I know this Bill is well intended and is to allow eligible employees a limited time to recover pay-related entitlements from over the previous 40 years. The claims process will cover various employee entitlements, including arrears of wages and sick pay, capped at eight weeks, outstanding holiday pay, also capped at eight weeks, unpaid statutory minimum notice moneys, certain arrears of pension contributions and various statutory awards made by the Workplace Relations Commission, WRC, and the Labour Court. This legislation is definitely going in the right direction and is most welcome.

There are some issues, though, that I want to highlight. The current statutory ceiling is classified as €600 per week that will be recoverable by an employee. That seems a little bit outdated. If enacted, the Bill will provide welcome additional protections to employees. While there are no additional debt burdens on employees who are subject to employee applications, some degree of resources will be required to engage with this application. According to the Bill, the Minister may deem an employer insolvent if there is no evidence of continued trading, like in the case of the flower shop example given, and there is satisfaction that amounts are due to the employee. Employees should not be required to provide supporting documentation evidence for this test. This was determined by the working group and the recommendations given in that regard. I think, though, that we will be able to find some way to streamline that.

The working group also said that where an employer is a sole trader, the test to verify the employer trading status should have an appropriate modification so that it is not a requirement for the a sole trader to have fully ceased trading. However, the phrase, "sole trader", does not come up once in the Bill. This issue was brought up by the working group. Will sole traders be required to cease trading under this legislation? It is much harder for any entrepreneur in Ireland to come back from a business failure compared to the United States, where it is possible to start off again at 85. I fear that this aspect is going to compound the situation. Some sole traders also trade as part of private, limited private companies because they have liability. I hope this is something that can be addressed on Report Stage. The working group brought up the suggestion of the establishment of an appeals mechanism as part of an Article 2(1)(b) process, which is a good suggestion.

In conclusion, I recommend the Bill, and I will certainly back and commend it. In the context of its introduction, the findings of the 2023 working group should be taken into account.

I welcome the Minister of State to the Chamber this afternoon. Fianna Fáil welcomes and supports this Bill, which will make changes to the insolvency payments scheme that protects employees' pay-related entitlements if their employer becomes insolvent. As the Minister of State outlined, the Bill strengthens the safety net for employees when their employer goes out of business. It ensures that workers are not left without pay or legal remedies simply because a company collapses in an unexpected or irregular way.

Under existing legislation, the Protection of Employees (Employers' Insolvency) Act 1984, employees can claim certain unpaid entitlements, such as wages, holiday pay and some statutory awards from the State's insolvency payment scheme when an employer becomes formally insolvent, for example, through liquidation or receivership. Over time, however, it became clear that the law did not fully cover every situation required under EU law, particularly where an employer ceases trading but does not enter a formal insolvency process. This gap created uncertainty and, in some cases, hardship. Employees could find themselves in a situation where their employer had, effectively, shut down and wages were unpaid, but because no formal insolvency step had been taken, those employees were unable to access the State scheme. Obviously, this is an unjust situation for any employee to be in and it needed to be addressed by legislation, which this Bill does.

The primary change this Bill will provide for is to give effect to the Supreme Court judgment in which the court found Ireland had not fully transposed Directive 2008/94/EC, which protects employees' pay-related entitlements. This Bill is also designed to remedy the gap identified in the Supreme Court case. It will ensure that new cohorts of employees are protected under the insolvency payment scheme. It will set up a new statutory process for employees to seek to have their employer deemed to be insolvent. That will then enable the employees to secure their outstanding pay-related entitlements under the insolvency payments scheme. This will extend the scheme's protections to a particularly vulnerable group of workers.

Separately, the Bill will give an employee impacted by the Supreme Court's judgment since October 1983 the opportunity to make a claim. This time-limited scheme will be open for two years, with a further two years possible in exceptional circumstances in the event of their employer's insolvency. Crucially, the Irish legislation, namely, the Protection of Employees (Employers' Insolvency) Act 1984, did not provide protection to employees whose employers go out of business but do not go through an insolvency process such as liquidation or bankruptcy. The Bill addresses such cases. Where such a situation were to arise again, employees could apply for a deemed insolvent determination where their employer ceased trading without formal insolvency proceedings. This means they could more readily access the State scheme to claim unpaid wages, holiday pay and other entitlements. This reform will help to prevent workers from falling through legal gaps and give them a stronger, clearer route to justice and compensation when a company collapses.

These are the entitlements that employees have earned and that should be honoured, regardless of the situation of the company. This Bill will ensure our legislation matches our obligations under EU directives. It will also further enhance the protection of employees in the event of their employer's insolvency. At a relatively small cost, therefore, we will ensure that employees will have sufficient protections and rights in some very difficult situations where the uncertainty of the future is causing considerable stress. I fully support the Bill and I think it will receive widespread support in the House, given that it enhances the protection of workers and provides them with certainty in regard to their legal rights. Go raibh maith agat.

Cuirim fáilte roimh an Aire Stáit. I thank him for stepping in to help the passage of this important legislation. We will be supporting the Bill to pass on to Committee Stage today.

As the Minister of State said in his statement, this comes about due to the 2018 Supreme Court ruling, which found that our legislation did not adequately transpose the EU directive to cover informal insolvency, that is, those situations where a business ceases trading without formal liquidation or bankruptcy. It is very important that workers are able to access their unpaid wages and entitlements from the insolvency payment scheme, and I welcome the Government's attempts, albeit belated and at the request of the Supreme Court, to now address this anomaly.

This is a workers' rights issue. It is about justice, dignity and making sure that those who have worked hard, often in low-paid jobs, are not left to suffer alone when their employer walks away. Sinn Féin has always championed the rights of the workers of Ireland, whether through advocating for fair wages, better working conditions or stronger protections against exploitation. We believe in collectivism and the right to unionise and that there must be a statutory safety net for those instances of extreme vulnerability such as company insolvency. The challenges that workers and families face are mounting day by day: the cost of rent, access to housing, the cost of healthcare, the cost of living, the price of fuel, the price of food. I am sure the Minister of State will be aware of the eye-watering increases in the cost of fuel. I listened to him on the radio yesterday morning talk about this and the prospect that companies would engage in some form of gouging, given the increase in oil prices internationally. The point was made to him - and he agreed with it - that stockpiling should prevent that, and here we are getting reports from across the country of eye-watering increases in fuel prices. I hope that the Minister and the CCPC will do a job in ensuring that large suppliers do not put undue costs on households and families.

As we are discussing business insolvency and its effects on workers, I also want to mention the staff at EuroGiant. Last month it was reported that EuroGiant had entered liquidation, with 640 jobs at risk across 20 counties. These workers must be treated with respect and they need clarity on their situation as soon as possible. I request that the Minister of State ask the Minister for enterprise to do all he can to support the affected workers.

In terms of legislation regarding informal insolvencies and their effect on workers, my colleague, an Teachta Rose Conway-Walsh, had tabled in the select committee amendments which would have shortened the length of time an employee would have to wait for payment from eight weeks to four weeks and increase the amount payable to an employee in respect of any debt from €600 a week to €1,000. The reason for suggesting the change to the higher amount was to bring it in line with current approximate average wages. Unfortunately, both amendments were ruled out of order, although the Minister then committed to keeping the time period under review. Eight weeks is a very long time for a worker to wait for money. I would appreciate if the Minister of State could seek clarity as to whether the Government's position on that has changed in the meantime.

The Bill extends protections to the most vulnerable workers, including sole traders and those on low pay. It promises that when businesses shut up shop suddenly employees are not forgotten about and it ensures that they do not have to bear the burden alone. For this reason I welcome the Bill, but I remain steadfast that workers' rights must be strengthened at all times.

I thank the Senators for their considered contributions. I am aware of the very real experience of all those contributors and indeed you, a Leas-Chathaoirleach, in the corporate world as employers and as Ministers with relevant responsibility. This was a particularly informed and particularly useful debate, and it is really important that we stress that.

A few issues were raised that I would like to address briefly, where possible, in the interest of being helpful. I am very grateful to Senator Nelson Murray for her very practical example of Linda's Florist. The Senator is a businesswoman of some renown. I did not know she was going into floristry next. Even if it is hypothetical, it is a very practical example.

On two of the issues Senator McCarthy raised, the Bill refers to natural process. Therefore, the test for sole traders is that they are no longer acting as an employer to any employee.

An issue raised also by Senator McCarthy is related to the issue Senator Murphy raised in relation to the €600-per-week limit, which has not been increased, as a matter of fact, for 21 years. A €600-per-week salary ceiling applies to both redundancy and insolvency payments. The salary ceiling for both purposes of redundancy and insolvency payments has been aligned since the creation of insolvency payment schemes in the 1980s. Therefore, the Minister cannot accept any suggestion that would have two different salary ceilings in operation. A range of factors must be carefully balanced in consideration of any increase to the ceiling, the same as in relation to the issue of the eight-week period. I fully accept the point Senator Murphy makes about it being a long time. The Minister is keen to get this legislation in place, see how it is working and see how it is amended, but he said to Deputy Conway-Walsh on Committee Stage that he would keep it under review. It remains under review, and I think we have to get the legislation fully enacted before we can conclude any sort of review process.

I will address the two other remaining points before I conclude my intervention. Senator Crowe is dead right that this is a relatively small cost to the State and to the public body, but the protections are significant. I absolutely agree with Senator Murphy that it is vital that we enhance and enshrine workers' rights. I will sound just a small note of difference, that employers do not always walk away. We have to be fair and considered. There are bad actors and people who perhaps go insolvent without consideration, but sometimes cases are taken where a businessperson has passed away without winding up or getting their affairs in order. That is just an element of balance. I do not disagree with the wider point the Senator makes but it is important to provide that clarity for the Chamber.

In relation to the two wider issues Senator Murphy raised, as he is aware, the Minister, Deputy Burke, instructed the CCPC to commence a piece of work yesterday on accusations of profiteering or gouging, or whatever you want to call, it by energy companies. This is a vital piece of work to provide that clarity and peace of mind for consumers.

The events in the Middle East are ridiculously worrying, to be frank. On a human level, of course we are very concerned for the large number of members of the Irish community not only living in the region but caught in transit and those coming back from holiday or travel. We are also concerned about the very real economic consequences this will have. We have seen this in other conflicts, be it in this region or the war in Ukraine, where there is a knock-on effect. Increases to energy prices, be it gas or oil, are inevitable but increases of the like we have seen this week, so quickly and to the extent that we have seen, are abnormal and quite worrying. That is why that piece of work has to be done and the Government awaits that piece of work. Of course, if anyone is found to be profiteering, there are very clear sanctions.

This Bill will make a positive impact. It will ensure that new cohorts of workers are protected under the insolvency payments scheme. The Bill will provide for a new statutory process for an employee to seek to have their employer deemed insolvent. The officials in the Department of Enterprise, Tourism and Employment have worked carefully to ensure that this process is as streamlined as possible. The Bill is necessarily complex, but the Department aims to ensure that the process it underpins will not be. The Department has been very careful to ensure that workers are not burdened with an onerous process to navigate. It has balanced a straightforward process with safeguards to protect both employers who are still trading and, crucially, the taxpayer. While the Bill itself is quite technical, its intention is clear. It will further enhance the protection of employees where their employer becomes or is deemed insolvent.

I am extremely grateful to the Senators for their time and their contributions. I appreciate their statements of support for this Bill and I look forward to progressing it to Committee Stage.

When is it proposed to take Committee Stage?

Next Tuesday.

Is that agreed? Agreed.