European Restructuring Monitor (ERM)
Eurofound's ERM database on restructuring-related legal regulations provides information on regulations in the Member States of the European Union and Norway which are explicitly or implicitly linked to anticipating and managing change.
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In the event of employer insolvency, affected employees are paid statutory minimum payments - statutory redundancy (if applicable), unpaid wages - through the redundancy payments scheme (via the Social Insurance Fund, SIF), which is administered by the Department of Social Protection.
This provision concerns all employed in an employment relationship underlying full social security protection, irrespective of the duration of the employment contract. Part-time and fixed-term contracts are covered. For temporary agency workers, the party which pays the wage/salary is considered the employer - if the hirer company pays wage/salary and becomes insolvent/liquidated, the temporary agency worker comes under the criteria for access to the SIF.
An employer is considered insolvent if the company went bankrupt, has been put under liquidation, filed for insolvency (either in Ireland or in another EU member state) or is legally administered because of the death of the entrepreneur. Examinership, receivership and winding up of partnerships are excluded.
The protection for employees, and critically, access to the SIF, is only guaranteed if the insolvency is formal, i.e. the company has been formally wound up at the courts. If an employer is informally insolvent (no court-approved wind up), affected employees cannot get access to the SIF. However, the minister can apply for a company to be wound up to enable affected employees get access to minimum payments through the SIF.
To apply for support, employees have to fill in the relevant forms and submit them to the insolvency administrator who checks them and confirms them at the guarantee fund. The SIF pays the claims to the insolvency administrator who forwards them to the employees after deducting taxes and similar. The insolvency administrator is also responsible to answer employees’ questions regarding the extent of the claims. For other questions, employees are referred to the insolvency income department of the ministry.
Guaranteed are non-paid wages, holiday remuneration as well as other claims the employee has against the employer, such as severance payments, maternity payments or similar. Non-paid wages, sickness payments, holiday remuneration and income for non-worked hours are paid for a maximum of eight weeks. In most of the cases, claims that arose during the 18 months prior to the insolvency/being made redundant are considered. There is a maximum weekly level on an individual's earnings that can be considered for the calculation of payments from the SIF, which is subject to change. The current limit can be found here.
The fund is financed by employers' and employees' contributions, as well as through taxation. The guarantee of the fund is independent of the employer paying the contributions. The regulation provides that the fund should satisfy the employee within 60 days of the request. The Minister for Enterprise, Jobs and Innovation can also use the fund to make payments into the assets of an occupational pension scheme so as to cover contributions that could not be paid by the employer due to insolvency.
While there is no centralised state record of the number of redundancies each year, the redundancy payments scheme (paid out via the Social Insurance Fund) has statistics on what is paid to workers made redundant where their former employer is unable to pay their statutory redundancy.
The weekly cap on an individual's earnings that is considered for payment from the SIF (found here) is the same cap that applies to statutory redundancy payments.
The inability for employees affected by informal insolvency to obtain redress from the insolvency payments scheme was found by the Supreme Court, in the case of Glegola (2019), to be inconsistent with Directive 2008/94/EC.
In May 2025, the government published the General Scheme of the Protection of Employees (Employers’ Insolvency) (Amendment) Bill 2025, which outlines a new right of redress in the circumstance of informal insolvencies.
An employee will be able to serve formal notice on their employer and give them a reasonable period to pay any moneys due. If the employer fails to pay, the employee can then apply to the scheme to have them deemed insolvent. When an application for deemed insolvency is received, the employer will be notified and given a chance to participate in the process.
Under this test, officials will consider the application, the employer’s response and Revenue and Companies Registration Office data on the employer. If the evidence shows an employer has ceased trading, the employer will be deemed insolvent for the purpose of that application only. If the evidence shows an employer has not ceased trading, then the employer is not deemed insolvent. In such cases, an employee still has rights to pursue the employer through the Workplace Relations Commission or the courts. A trade union or “trusted family member” can make an application on an employee’s behalf.
To correct the failure in transposing Directive 2008/94/EC, there will be a window of opportunity for claimants who have been affected by informal insolvency to seek redress for retrospective claims dating back to 1983.
Eurofound (2015), Ireland: Wage guarantee in case of insolvency, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/wage-guarantee-in-case-of-insolvency/ireland
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