The Employment (Collective Redundancies and Miscellaneous Provisions) Act 2024

The Act has been signed into law and once commenced, it will amend the current collective redundancy regime in insolvency situations. Collective redundancies are redundancies that are effected by an employer where in any period of 30 consecutive days the number of dismissals falls within certain thresholds set out in the Protection of Employment Acts 1977 – 2014.

Key Proposed Changes to Collective Redundancy Legislation

New concept of the “responsible person”
Section 4 of the Act provides for the newly defined term of “responsible person”. The Act places on a legislative footing the obligations and responsibilities to which a “responsible person(s)” who assumes full control of an affected business is required to adhere.

The definition of responsible person includes a liquidator, a provisional liquidator, a receiver (who assumes management of the business) or any other person appointed by the Court where they assume full responsibility for the management of the business concerned.

Obligations of a “responsible person”:
(i) Consultation
A responsible person is required to engage in a consultation with the elected employee representatives where it is proposed that collective redundancies will occur.

Such a consultation is required to take place at the “earliest opportunity and in any event at least 30 days before the first notice of dismissal is given”.

Prior to the introduction of the Act, an express exemption to the 30-day consultation period existed in cases of collective redundancy arising due to an employer’s insolvency. Section 11 of the Act amends section 14 (3) of the 1977 Act to remove this exemption and Section 9 of the Act now provides that the statutory obligations in collective redundancies also apply where those redundancies are due to the business termination on an employer’s insolvency.

Where a consultation process has already been commenced by an employer, a responsible person is entitled to continue that consultation.

(ii) Information
The Act provides that a responsible person is required to provide information to the employee representatives during the consultation period.

(iii) Notification
A responsible person is responsible for notifying the Minister of Enterprise, Trade and Employment (the “Minister”) of a proposed collective redundancy in writing at the earliest opportunity and at least 30 days before the first dismissal takes effect. The 2024 Act will provide that the notification to the Minister can be sent by “electronic means” and not just by registered post.

Non-compliance with the consultation, information and notification requirements
Under the Act, it is now an offence for a responsible person to fail to comply with the consultation, information and notification requirements set out above. On summary conviction this can result in a responsible person being liable to a class A fine of up to €5,000.

Non-compliance with the requirement not to effect redundancies prior to the expiry of the 30-day period following notification to the Minister is also an offence and a responsible person is liable on conviction on indictment to a fine not exceeding €250,000.

Defence in respect of consultation, information and notification obligations
The Act provides that a responsible person may rely on a defence that, having exercised all reasonable professional care and skill, he or she had reasonable grounds for believing that the employer had complied with its obligation to consult and inform with employees and to notify the Minister.

Redress expanded
The Act expands the grounds on which an employee can make a complaint to the Workplace Relations Commission. This now includes circumstances where an employee is dismissed prior to the expiry of the 30-day period following notification to the Minister.

Amendments to the Companies Act 2014
In addition to the above, the Act also amends certain provisions of the Companies Act 2014, which will impact on insolvency proceedings.