In the second session, we will consider the Protection of Employees (Employers' Insolvency) (Amendment) Bill 2025, which was referred to the committee by order of the Dáil on 28 May 2025. I welcome back the Minister for Enterprise, Tourism and Employment, Deputy Burke, and his officials. The Bill has three Parts, 13 sections and the Title. There are ten amendments on the amendment list. For the information of members, it is proposed to group the following amendments for the purposes of debate: Nos. 1 to 3, inclusive, and Nos. 4, 5 and 10. Amendment No. 6 has been ruled out of order and the proposing Deputy notified of that ruling. All other amendments that are not grouped will be discussed individually. Is that agreed? Agreed.

We will begin with an opening statement by the Minister, which I propose shall be published on the committee's website. Is that agreed? Agreed. I invite the Minister to make his opening remarks.

I thank the Cathaoirleach and members for making committee time available to discuss the Protection of Employees (Employers' Insolvency) (Amendment) Bill 2025. We had a very constructive debate on Second Stage and I welcome the support for the Bill from right across the Dáil. While the Bill is quite complex and technical, it has a clear aim of further supporting employees in the event of their employer's insolvency.

As it stands, where an employer becomes insolvent and employees are owed wages, holiday pay and so on, the State protects those pay-related entitlements. They are usually paid to a liquidator or receiver to distribute to the employees. These payments are made from the Social Insurance Fund under what is generally known as the insolvency payments scheme. The Bill makes a number of changes to how that scheme operates. The primary change is to give effect to the Glegola Supreme Court judgment in which the court found that Ireland had not fully transposed Directive 2008/94/EC, which protects employees' pay-related entitlements in the event of their employer's insolvency. Crucially, the Irish transposing 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 insolvency processes such as liquidation or bankruptcy.

The Bill is designed to remedy the gap identified in the Supreme Court case. It will ensure new cohorts of employees are protected under the insolvency payments 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 protection to a particularly vulnerable group of workers.

Separately, the Bill will give an employee impacted by the Supreme Court 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.

Today, I will put forward seven amendments to the Bill. The most substantial of these is to section 8 and has to do with how pension contributions are protected under the insolvency payments scheme. First, I will amend the legislation to ensure that contributions to the new auto-enrolment retirement savings system, My Future Fund, will be protected in the same way as other pension scheme contributions. This was always the intended policy, but it is insufficiently certain that the detailed wording of the 1984 Act provides this protection. My amendments will put this beyond doubt. Second, I will put in place specific rules to calculate what employer contributions to defined benefit pension schemes are covered under the insolvency payment scheme. This will close a loophole whereby the taxpayer's liability to cover employer pension contributions can be determined by pension scheme rules to which the State is not a party.

I look forward to discussing these proposals in more detail with all members.

I move amendment No. 1:

In page 3, lines 26 and 27, to delete “Minister for Enterprise, Trade and Employment” and substitute “Minister for Enterprise, Tourism and Employment”.

I move amendment No. 2:

In page 4, line 6, to delete “Minister for Enterprise, Trade and Employment” and substitute “Minister for Enterprise, Tourism and Employment”.

I move amendment No. 3:

In page 4, line 9, to delete “Minister for Enterprise, Trade and Employment” and substitute “Minister for Enterprise, Tourism and Employment”.

I move amendment No. 4:

In page 7, lines 2 to 10, to delete all words from and including “an” in line 2 down to and including line 10 and substitute the following:

“—

(a) an employer on which a notice is served under section 4A—

(i) is not taken to be, or to have become, insolvent in any of the circumstances referred to in paragraphs (a) to (f), (h) or (i) of section 1(3) on or before the date on which the deeming application is made, and

(ii) does not pay, to the deeming applicant, the amounts referred to in the notice within 8 weeks from the day on which that notice is served, and

(b) the amounts referred to in the notice became due to the employee—

(i) during the period of 18 months ending on the day on which section 6 of the Protection of Employees (Employers’ Insolvency) (Amendment) Act 2025, insofar as it relates to this section, or any provision of this section, comes into operation, or

(ii) after the period referred to in subparagraph (i).”.

It has been ruled that amendment No. 5 cannot be moved.

An issue has arisen with amendment No. 6, so it is out of order.

That is out of order as well, is it?

Yes.

I am totally out of order today, but I think the Minister will catch the sentiment of what I am trying to do with this.

Amendment No. 6 related to increasing the amount involved from €600 to €1,000. The reason for suggesting that it be changed to a higher amount was to bring it in line with current approximate average wages.

In the context of amendment No. 5, I just felt that the period when employees are left waiting for payments should not be prolonged. Eight weeks is too long to wait. That is why I suggested that it be brought down to four weeks. As in the recent case, where people expect a wage on a Thursday and they are dependent on those wages, that eight weeks was too long for them to wait for a payment.

I hear what the Deputy said in respect of both amendments. First, we will keep the matter of reducing the period to four weeks under review. We did not want this new process to be the default mechanism. There is already a statutory process under way which the vast majority of employees will access, but once we get this bedded in we will keep that under review. There will be potential to do that in future, and if we need to do it we will. There are a number of supports available through our Intreo offices already, but we do not want to see employees under pressure, so it is absolutely something we will keep under review.

Obviously, the €600 relates to a wider budgetary decision. This matter has been raised on a number of occasions. It will be kept under review by the Department, but that will be as part of a wider budgetary decision as opposed to being done here.

We will have further situations where people are left in insolvency and where their payments or their wages are suddenly cut off. There is sometimes a bit of confusion about what they are eligible for, particularly what they are eligible for that will not impact their redundancy once all of that has been worked out. I suggest that we might have a toolkit or a standard package of frequently asked questions that people could have and that could be ready even in the Intreo offices. To have a designated person as well would be ideal. It is a matter of having something where questions could be answered for them really quickly as to where they can get supports, how they can get them and reassurance to the effect that it would not impact their final redundancy settlement.

We are happy to work across Government on that. First, this is aimed at cases where the shutters are pulled down but the employer or the business has not gone through the statutory process to wind up the business. That is what we are trying to resolve here. About 220 employees per annum could be captured by this cohort. We have to look at the look-back period, which I mentioned in my opening statement, and in respect of which there could be significantly more to resolve. In relation to those who are on redundancy, we are working with the Intreo offices. In particular, the Fastway case was one on which we did a lot of outreach with our Department and the Department of Social Protection, advising employees about their job status and their ability to get other work, particularly coming up to Christmas, and getting key payments from the Department of Social Protection. We are happy to work and fine-tune our response to give people the best information possible. I am happy to take that on board.

As quickly as possible. I thank the Minister.

I move amendment No. 7:

In page 18, between lines 9 and 10, to insert the following:

“8.Section 7 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the substitution of “occupational pension scheme, Personal Retirement Savings Account or automatic enrolment retirement savings system” for “occupational pension scheme or Personal Retirement Savings Account (within the meaning of the Pensions Act, 1990)”,

(ii) in paragraph (c), by the substitution of “occupational pension scheme, Personal Retirement Savings Account or automatic enrolment retirement savings system” for “scheme or Personal Retirement Savings Account (within the meaning of the Pensions Act, 1990)”, and

(iii) by the substitution of “assets of the occupational pension scheme, Personal Retirement Savings Account or automatic enrolment retirement savings system” for “assets of the scheme or Personal Retirement Savings Account (within the meaning of the Pensions Act, 1990)”,

(b) by the insertion of the following subsection after subsection (1):

“(1A) Where an application under subsection (1) relates to an employer who has become insolvent in the circumstances referred to in section 1(3)(i)—

(a) the application shall be accompanied by a copy of—

(i) the insolvency arrangement, and

(ii) any court order relating to the insolvency arrangement,

and

(b) the Minister shall not make a payment under subsection (1)—

(i) in respect of any amount paid, or to be paid, to the applicant under the insolvency arrangement, or

(ii) in respect of any unpaid pension contribution that is not specified in the insolvency arrangement.”,

(c) in subsection (2), by the substitution of “occupational pension scheme, Personal Retirement Savings Account or automatic enrolment retirement savings system” for “occupational pension scheme or Personal Retirement Savings Account (within the meaning of the Pensions Act, 1990)”,

(d) in subsection (3)—

(i) by the substitution of “Subject to subsection (3A), the sum payable under this section in respect of unpaid contributions of an employer on his own account to an occupational pension scheme, Personal Retirement Savings Account or automatic enrolment retirement savings system” for “The sum payable under this section in respect of unpaid contributions of an employer on his own account to an occupational pension scheme or Personal Retirement Savings Account (within the meaning of the Pensions Act, 1990)”,

(ii) in paragraph (a), by the substitution of “occupational pension scheme, Personal Retirement Savings Account or automatic enrolment retirement savings system” for “scheme or Personal Retirement Savings Account (within the meaning of the Pensions Act, 1990)”, and

(iii) in paragraph (b), by the deletion of “(within the meaning of the Pensions Act 1990)”,

(e) by the insertion of the following subsection after subsection (3):

“(3A) The sum payable under this section in respect of unpaid contributions—

(a) to an occupational pension scheme that is a defined benefit scheme (within the meaning of section 2 of the Pensions Act 1990), and

(b) that are contributions of an employer to that scheme on the employer’s own account,

shall not exceed an amount calculated in accordance with the following formula:

(A(B/C)) - D

where—

‘A’ is the total remuneration paid by the employer to members of the scheme during the period of twelve months ending on the applicable day,

‘B’ is the total of the contributions paid by an employer on the employer’s own account to the scheme during the reference year,

‘C’ is the total remuneration paid by the employer to members of the scheme during the reference year, and

‘D’ is the total contributions paid by an employer on the employer’s own account to the scheme during the period of twelve months ending on the applicable day.”,

(f) in subsection (4), by the substitution of “occupational pension scheme, Personal Retirement Savings Account or automatic enrolment retirement savings system” for “occupational pension scheme or Personal Retirement Savings Account (within the meaning of the Pensions Act, 1990)”,

(g) in subsection (7), by the substitution of “subsection (3) or (3A)” for “subsection (3)”, and

(h) by the insertion of the following subsection after subsection (8):

“(9) In this section—

‘applicable day’ means the day immediately preceding the date on which the employer became insolvent;

‘automatic enrolment retirement savings system’ means the retirement savings system established under the Automatic Enrolment Retirement Savings System Act 2024;

‘member’, in relation to an occupational pension scheme, has the meaning it has in paragraph (a) of the definition of ‘member’ in section 2 of the Pensions Act 1990;

‘Personal Retirement Savings Account’ has the meaning it has in section 91 of the Pensions Act 1990;

‘reference year’ means a period of twelve months that ends on the day that is twelve months before the applicable day.”.”.

I move amendment No. 8:

In page 18, between lines 24 and 25, to insert the following:

“9.Section 8 of the Principal Act is amended—

(a) in subsection (1), by the substitution of “Where an application is made to the Minister under section 6 or 7 of this Act” for “Where an application is made to the Minister under section 6 or 7 of this Act in respect of a debt owed or unpaid contributions to an occupational pensions scheme”, and

(b) in paragraph (a) of subsection (1), by the substitution of “that officer, or, where the application is made by or on behalf of an employee, that employee,” for “that officer,”.”.

I move amendment No. 9:

In page 19, line 9, after “(3).” to insert the following:

“In such cases, an appeal mechanism for employees will be made available through the Minister’s Department.”.

The purpose of proposing this amendment, the justification, is that employees need some form of appeal or avenue to pursue, after a decision has been made by the Minister, to instil transparency and fairness in the process.

I thank Deputy Conway-Walsh for her amendment. This amendment would require me to put in place an appeal mechanism in circumstances where certain cohorts do not have access to an appeal to the Workplace Relations Commission, WRC. In general, where an employee believes the Minister has failed to properly pay arrears of wages, contractual sick pay or holiday pay, this decision can be appealed to the WRC. Section 9 restricts this appeal mechanism in very limited circumstances and for good reason. The first limitation applies where the employer has entered into an insolvency arrangement within the meaning of the Personal Insolvency Act 2012.

In such cases, the employee has already engaged with the relevant insolvency arrangement procedure. This is a separate statutory process under the supervision of the superior courts. The debts owed to the employee and the amounts the employer will pay to that employee under the terms of the insolvency arrangement are confirmed through this statutory process. These court-supervised terms should not be subject to further review by the WRC, including an appeal that would risk undermining the courts and statutory processes.

The second limitation applies where employees are using the new deemed insolvent process and the debts claimed are entirely disputed by their former employer. In this case, it is important to emphasise the employee has access to the WRC. The issue here is who the appropriate respondent is. The employee will need to make a complaint to the WRC against the employer to establish that the debts are genuine. Where an employee goes through the process and receives a WRC adjudication confirming the debt, they will then be able to apply for payment of this debt under the deemed insolvent process. It would be futile and could be hazardous to provide a further appeal by the Minister in this scenario. There is already an appeal route for a decision by the WRC and the Labour Court. If the Minister intervened, it would require him or her to overrule established processes that could undermine the independence of these bodies.

I appreciate that the points made by the Deputy are nuanced. However, my officials will ensure that relevant processes available to employees are clearly signposted when this process becomes live.

I move amendment No. 10:

In page 19, line 20, to delete “subsection (1)(b)” and substitute “subsection (1)(a)(ii)”.

Happy Christmas.

Many happy returns. Unfortunately, I am going to Brussels, so I had to get it in early. A few of the Advent candles are lit, so I can say Happy Christmas.

I thank the Minister and his officials for attending. I also thank the select committee's members and staff. I wish them all a very nice break over the Christmas recess. The joint committee will return next week.