Complainant

Respondent

Parties

Complainant

Respondent

Anonymised Parties

An Applicant

A Government Department

Representatives

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 9 of the Protection of Employees (Employers’ Insolvency) Act, 1984.

CA-00023049-001

06/11/2018

The Complainant worked for a company, ‘Company X’, which ceased trading on 26 August 2016 and her employment was terminated on that day. The Complainant said that Company X failed to appoint a liquidator until 7 March 2018, almost 19 months after it ceased trading. The Complainant claims that the delay in appointing a liquidator had frustrated her ability to successfully assert her employment rights in respect of outstanding pay related entitlements due to her.

The Complainant said she applied to recover arrears of two week’s pay minimum notice payment. However, due to the long delay in appointing a liquidator, 18 months and a few days, her claim

was rejected by the relevant Department.

The Complainant said that she had no control or influence over when the liquidator would be appointed to Company X and has no information as to why Company X was allowed to delay the appointment of the liquidator. She said that the whole system is unfair, that there is a statutory 'time frame’ placed on her to get her entitlement application in to the Department, whereas there is no 'time frame' on Company X or any other Company between ceasing trading and the appointment of a liquidator.

The Complainant claims that she applied to the relevant Department for her entitlement and was informed that it was unable to process her claim as it was outside of the 18 months prior to date of liquidation.

The Respondent said that the Insolvency Payments Scheme operates under the Protection of Employees (Employers’ Insolvency) Act 1984, as amended. The purpose of the Insolvency Payments Scheme is to protect certain outstanding pay related entitlements due to employees in the event of the insolvency of their employer. These include arrears of wages, holiday pay and minimum notice. Payments are made from the Social Insurance Fund and are subject to the conditions and limits of the scheme as set out in the legislation. The scheme is confined to former employees of companies that are in a formal wind-up procedure such as liquidation or receivership, or situations where the employer has died or been declared bankrupt.

The Liquidator in this case was appointed to Company X on 7 March 2018, and the Respondent received an application for the Insolvency Payments Scheme from the Complainant on 21 September 2018.

The Respondent set out the summary of the Complainant’s claim as was received:

Arrears of wages from 27/02/2015 to 26/8/2016 – 8 weeks x @ €692.61 = €5,540.61

Arrears of holiday pay from 27/02/2015 to 26/8/2016 = €1,385.22

Minimum Notice of 8 weeks = €4,800.00

The Respondent said that following a review by the Liquidator of Company X, who certified the following amounts:

Arrears of wages = €4800 owed.

Arrears of holiday pay = €1200 owed.

Minimum Notice = €5540.88 owed.

The Respondent claims that under Section 6(4)(a) of the Protection of Employees (Employers’ Insolvency) Act 1984, as amended a wage cap of €600 per week applies. It states,

“(4) (a) The amount payable to an employee in respect of any debt mentioned in subsection (2) or award mentioned in subsection (3) of this section shall, where the amount of that debt is or may be calculated by reference to the employee’s remuneration, not exceed €600 in respect of any one week or, in respect of any period of less than a week, an amount bearing the same proportion to €600 as that period bears to the normal weekly working hours of the employee at the relevant date.”

The Respondent said that the date of termination of the Complainant’s employment was 26/8/2016 and therefore the relevant date for purposes of arrears of wages and arrears of holiday pay was the date of appointment of the liquidator was 7/3/2018. The relevant date for purposes of Minimum Notice (date of termination of employment) was 26/8/2016, and the relevant period for the claim was 7/9/2016 - 7/3/2018. The Respondent said that when processing the Complainant’s application, it was noted that as the date of termination of employment was outside of the 18-month relevant period the insolvency claim was disallowed. It said that the Liquidator was advised of the Department’s decision in a letter dated 15 October 2018.

The Respondent said that there was a full review of the Complainant’s application following receipt of notification of this within appeal to the Workplace Relations Commission. The application was checked in full in accordance with the procedures for the scheme. It said that Section 6 of the Protection of Employees (Employers’ Insolvency) Act 1984, as amended, sets out an employee’s rights on the insolvency of their employer. Section 6(2) sets out the types of debts which are covered by the scheme and these include the type of award claimed in the case at hand. The debts claimed are allowed under the Act. However, some of the claimed amounts were found to be in excess of the maximum payable under the Act as follows:

1) In relation to arrears of wages as per Section 6(2)(a)(i), €5,540.61 was claimed but the maximum allowed was €4,800.00.

2) In relation to Arrears of holiday pay as per Section 6(2)(a)(iv), €1,385.22 was claimed but the maximum allowed certified by the liquidator was €1,200.00.

3) In relation to Minimum Notice Section as per Section 6(2)(a)(iii)(II), €4,800 was claimed but €5,540.88 was certified by the liquidator whereas the maximum allowed was €4,800.00

The Respondent said that the “relevant date” and the “relevant period” are prescribed in the Act and were considered when making the decision on the Complainant’s application. It said that the “relevant date” is not the same for the three situations mentioned above.

Section 6(9) sets out the definition of the “relevant date” for the purposes of the section. In particular paragraph (b) of the definition states that in relation to any other debt to which

this section applies-

(i) in case the relevant applicant’s employment is terminated as a result of the employer’s insolvency, the date on which such employer became insolvent, or the date of such termination, whichever such applicant shall as regards the debt nominate, or

(ii) in any other case, the date on which such employer became insolvent;

The “relevant period” for the purposes of the Arrears of Holiday Pay and Arrears of Wages is - “in relation to a debt to which this section applies, the period of eighteen months immediately preceding the relevant date.” These debts did not occur during this period and therefore the Complainant application fails as its outside the prescribed time limits.

For the purposes of the Minimum Notice the relevant date is the date of termination of employment: -

Section 6(9)(aa) in relation to a debt referred to in subparagraph (iii)(II), the date of termination of employment,

However, Section 6(2)(a)(iii)(II) does not have any reference to a “relevant period”.

The Respondent said as the Complainant’s application for arrears of wages and arrears of holiday pay did not fall during the “relevant period”. Therefore, the decision of the deciding officer is correct and should be upheld. The decision in relation to arrears of wages is supported by a previous decision of the EAT – EAT Hearing Number 55879, Case 11/2013.

The Respondent said as the section of the Act which deals with Minimum Notice does not refer to a “relevant period” then the Respondent has asked if payment for Minimum Notice can be allowed.

Having considered the submissions made by the parties and the relevant law, I am satisfied that the scheme is prescriptive and there are details in relation to the time limits for the various categories of debts. The Complainant details the unfairness regarding the time limits placed on her, an applicant, having been employed by an entity that went into liquidation, as opposed to the lack of statutory time limits place on the entity having to appoint a liquidator.

I hear her frustrations. I am unaware of the reasons for the delay in this instance for the appointment of a liquidator, which has had consequences on her application to recover a financial settlement.

The Respondent has been very clear and transparent in how it has applied the law relevant to the Complainant’s case. I have read the provisions of the Act and I am satisfied that the Respondent has ruled on the Complainant’s application inadmissible in relation to its interpretation of the Law.

I note Section 6(9) sets out the definition of the “relevant date” for the purposes of the section and I further note in particular paragraph 6(9)(b) of the definition states that in relation to any other debt to which this section applies-

(i) in case the relevant applicant’s employment is terminated as a result of the employer’s insolvency, the date on which such employer became insolvent, or the date of such termination, whichever such applicant shall as regards the debt nominate, or

(ii) in any other case, the date on which such employer became insolvent;

In particular I note that the “relevant period” for the purposes of the Arrears of Holiday Pay and Arrears of Wages is - “in relation to a debt to which this section applies, the period of eighteen months immediately preceding the relevant date.” (My emphasis added)

I find that the Respondent is correct in its interpretation of the legislation in relation to the Complainant’s application to Arrears of Holiday Pay and Arrears of Wages, as they do not fall within the “relevant period”.

As for the criteria regarding application for Minimum Notice, I take careful note of the wording in Section 6(9)(aa) in relation to a debt referred to in subparagraph [section 6(2)](iii)(II), the date of termination of employment. In particular, I note Section 6(2)(a)(iii)(II) does not refer to any “relevant period”, as is prescribed for bothArrears of Holiday Pay and Arrears of Wages applications, and therefore, it does not place a time restriction in applications in relation to Minimum Notice.

It has been well established in case law that the ordinary meaning of the words should be taken as the primary rule of interpretation of law, and that we should apply the plain intention of the Oireachtas or the maker of the legislation from the words provided.

In this case the limitation of a relevant period, which has been defined in the Act, has not been referred to for instances of application for payment of Minimum Notice. Accordingly, I find that the relevant period stipulation does not apply in such a situation.

I find that the claim in relation to Arrears of Holiday Pay and Arrears of Wages was outside of the 18-month relevant period prior to the appointment of a liquidator. Therefore, the claims are not well founded.

I find that the claim in relation to Minimum Notice is well founded and should be paid to the Complainant.

I find that the claim in relation to Arrears of Holiday Pay and Arrears of Wages was outside of the 18-month relevant period prior to the appointment of a liquidator. Therefore, the claims are not well founded.

I find that the claim in relation to Minimum Notice is well founded and should be paid to the Complainant.

Protection of Employees (Employers’ Insolvency) Act - Minimum notice - well founded