Insolvent Employers: Further Protections for Employees

Under the General Employee Entitlements and Redundancy Scheme ("GEERS"), the Government provides protection for various employee entitlements where an employee loses their job as a result of their employer's insolvency. Amendments have recently been made to GEERS which became effective from 15 December 2008.

Amendment 1 - clause 16(d) Operational Arrangements

Currently under GEERS, the employee can obtain pay in lieu of notice (PILN) and redundancy pay under GEERS, despite the fact that the employee may have continued in the same job with the new business owner.

However, the new amendment now provides that where a business is sold or transferred to a new owner, an employee will not be eligible to claim assistance under GEERS for PILN or redundancy pay if they receive an offer of employment from the new business owner. The offer of employment must occur within 14 days of their termination and it must be on terms and conditions which were substantially similar to the terms originally provided by their former employer.

If the employee then is made redundant by the new employer or the new employer goes into liquidation or bankruptcy, the employee may be entitled to obtain assistance under GEERS for PILN and redundancy pay.

This amendment will not put employees in any worse position given that they are continuing their employment on similar terms to the previous employer.

Amendment 2 - clause 8(b)(iv) Operational Arrangements

The retrenchment pay provisions under GEERS will see the PILN capped at a maximum entitlement of 5 weeks. This cap falls in line with the maximum entitlements which are provided under the Workplace Relations Act 1996.