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Unrecovered employment debt
Unfortunately, an employer will sometimes go out of business leaving unpaid debts owed to their employees.
Under European Union law, the Member State (Ireland) is obliged to maintain a fund which will pay these debts in circumstances where the employee would otherwise be left high and dry.
Presently, domestic Irish legislation requires the employer to be placed into formal liquidation or adjudicated bankrupt.
The probelm is that Liquidation is very costly and require High Court proceedings and the appointment of an official liquidator. This has meant that if an insolvent employer shuts its doors, and fails to pay its staff without incurring the expense of a formal liquidation, the employees of such entities are left high and dry with their debts unrecoverable.
This situation has resulted in thousands of Irish employees being deprived of the opportunity to recover wages arrears and Employment Tribunal Awards (Unfair Dismissals Acts, Minimum Notice Acts, Organisation of Working Times Acts, etc.)
We are proud to have prosecuted the lead case in this area in which we challenged the compatibility of domestic Irish legislation with EU Regulations and we obtained a finding from the Court of Appeal in Ireland and the Supreme Court of Ireland that Ireland was in breach of applicable EU Regulations. Supreme Court Case Law
The consequences of this important case for Irish employees is that there is an entitlement on the part of thousands of Irish workers to recover compensation from the State for breach of the European Union rights as an employee.