What do you do if you are unable to pay the actual redundancy monies due to employees that you are making redundant?

Friel Stafford > Blog > Business > What do you do if you are unable to pay the actual redundancy monies due to employees that you are making redundant?

What do you do if you are unable to pay the actual redundancy monies due to employees that you are making redundant?

  • Posted by: Jim Stafford
  • Category: Business, Uncategorized

The answer depends on whether you are a sole trader, partnership or limited company.

Some businesses, in order to survive the Covoid crisis, will have to do a combination of lay-offs and redundancies.

Position of Sole Traders/Partnerships

Sole traders and partners in a partnership are personally liable for their trading debts, including redundancy monies. If the sole trader’s personal resources or the partners’ personal resources are unable to pay redundancy monies then they may make an application to the Department. See link below for details:

https://www.gov.ie/en/service/78213a-redundancy-payments/?referrer=https://www.welfare.ie/en/Pages/Redundancy-and-Insolvency.aspx

The Department will require a letter from your accountant enclosing a Statement of Affairs for the business together with statements of affairs for the sole trader/partners personally.

The Department will not pay out claims for arrears of wages, holiday pay, minimum notice.

Position of Limited Companies

If the company has no viable future then it should be placed into liquidation so that the liquidator may rapidly process employees’ claims for arrears of wages, holiday pay, minimum notice and redundancy.

If the company is viable, but suffering from cash flow difficulties, then it may make an application to the Department. See link below for details:

https://www.gov.ie/en/service/78213a-redundancy-payments/?referrer=https://www.welfare.ie/en/Pages/Redundancy-and-Insolvency.aspx

The Department will require a letter from your accountant enclosing a Statement of Affairs for the company.

The Department will only pay out claims for arrears of wages, holiday pay, minimum notice. via a Liquidator.

Please contact one of our directors for further guidance on 01 661 4066 or by email as follows:

Jim Stafford: jim.stafford@frielstafford.ie

Tom Murray: tom.murray@frielstafford.ie

Andrew Hendrick: andrew.hendrick@frielstafford.ie

Author: Jim Stafford