Employee rights in a liquidation

anonymous2009

Hi guys,

Our company is about to have a liquidator appointed.

There are a number of staff in Ireland who have 1 months notice which they've yet to receive. They were informed that were no longer employees in late Jan but told nothing more since. Other staff have longer notice periods and have not been officially let go.

There is an amount owing to the revenue which I understand must be paid out first.

My questions are

1. In your experience are the directors entitled to be paid wages in a liquidation?
2. In your experience should the staff who were let go receive their full notice in a liquidation?
3. In your experience should the staff who were not yet let go receive their wages up until the time that a liquidator was appointed
4. In your experience should the staff who were not yet let go receive their full 3 months notice?
5. In your experience how is the order of payments decided after revenue is paid off, i.e. which staff are paid first?

Any help / advice would be greatly appreciated, we tried the Citizens Advice Bureau but they couldn't really help and we can't afford a lawyer.

I understand that any advice posted here is for informational / entertainment purposes only and you will not be held liable for any advice given.

Many thanks

Newaglish

1. In your experience are the directors entitled to be paid wages in a liquidation?
The former directors will be let go instantly when the company is liquidated - they won't be working so won't earn any additional wages.

2. In your experience should the staff who were let go receive their full notice in a liquidation?
Yes - if they have received 4 weeks already and are entitled to (say) six weeks, they will receive 2 weeks minimum notice pay along with their redundancy

3. In your experience should the staff who were not yet let go receive their wages up until the time that a liquidator was appointed
Yes - staff are entitled to all wages accrued up to the date of liquidation. Those working during the liquidation period will also be entitled to wages earned during those weeks/months.

4. In your experience should the staff who were not yet let go receive their full 3 months notice?
Staff will be entitled to statutory minimum notice (check citizen's information). If the original contract stated 3 months' notice this will no longer apply.

5. In your experience how is the order of payments decided after revenue is paid off, i.e. which staff are paid first?
Order of payments is:
Bank (Fixed Charge Debenture)
Preferential (revenue, employees etc.)
Bank (Floating Charge Debenture)
Unsecured Creditors (Customers, Suppliers etc.)

In reality employees will usually get all arrears of wages and redundancy. I think this is paid by the DETE if the company can't afford it. There's no order of preference between individual employees.

anonymous2009

Newaglish wrote: »

1. In your experience are the directors entitled to be paid wages in a liquidation?
The former directors will be let go instantly when the company is liquidated - they won't be working so won't earn any additional wages.

2. In your experience should the staff who were let go receive their full notice in a liquidation?
Yes - if they have received 4 weeks already and are entitled to (say) six weeks, they will receive 2 weeks minimum notice pay along with their redundancy

3. In your experience should the staff who were not yet let go receive their wages up until the time that a liquidator was appointed
Yes - staff are entitled to all wages accrued up to the date of liquidation. Those working during the liquidation period will also be entitled to wages earned during those weeks/months.

4. In your experience should the staff who were not yet let go receive their full 3 months notice?
Staff will be entitled to statutory minimum notice (check citizen's information). If the original contract stated 3 months' notice this will no longer apply.

5. In your experience how is the order of payments decided after revenue is paid off, i.e. which staff are paid first?
Order of payments is:
Bank (Fixed Charge Debenture)
Preferential (revenue, employees etc.)
Bank (Floating Charge Debenture)
Unsecured Creditors (Customers, Suppliers etc.)

In reality employees will usually get all arrears of wages and redundancy. I think this is paid by the DETE if the company can't afford it. There's no order of preference between individual employees.

Thank you very much for your answer, much appreciated

Just on point 2, the staff were let go end of Jan and have received January wages but no further notice money, most haven't worked for the company for 2 years does this mean they are due min 2 week statutory or nothing at all?

Goose27

Newaglish wrote: »

2. In your experience should the staff who were let go receive their full notice in a liquidation?
Yes - if they have received 4 weeks already and are entitled to (say) six weeks, they will receive 2 weeks minimum notice pay along with their redundancy


4. In your experience should the staff who were not yet let go receive their full 3 months notice?
Staff will be entitled to statutory minimum notice (check citizen's information). If the original contract stated 3 months' notice this will no longer apply.


How come staff who are already let go get their full notice period as per contract and those not yet let go do not get the period of notice per contract? Just curious because could be facing this soon enough myself....3 mths notice per my contract versus 1 wk per statutory notice.

Newaglish

I should have clarified - in any sort of insolvency scenario, you are basically entitled to statutory everything.

If your statutory minimum notice is six weeks, and you have received your notice four weeks prior to liquidation, you are still due another two weeks following the liquidation.

If your contract states three months, you are given one week's notice and let go due to a liquidation, you are entitled to no pay in respect of minimum notice, as you have received your statutory minimum notice.

It often appears quite unfortunate when you look at the difference between contracted and statutory minimum notice/redundancy entitlements. Having said that, it's important to realise that Irish workers are entitled to a lot more than the average European (or global) employee.