The High Court has refused Magdalena Glegola’s application for payment of €16,818.75 from the Employers Insolvency Fund, finding that she had not met two threshold requirements under an EU directive on employer insolvency.
The amount represented an award made to Glegola by a rights officer in October 2012 for unfair dismissal, holiday pay and back pay. She sought an order requiring the Minister for Social Protection to pay it, relying on the directive or, alternatively, claiming damages on the basis that the State had failed to implement it properly.
The court’s judgment, delivered by Mr Justice Hedigan on 23 June 2015, said the claim depended first on whether the conditions in Article 2 of the directive were met. Those conditions required a request to open collective insolvency proceedings and either a decision to open them or, where assets were insufficient to justify opening them, a finding that the employer’s business had definitively closed.
The court found that no request to open collective insolvency proceedings had been made. In a separate petition, Glegola had sought to restore the company to the register and ultimately asked only for a declaration under section 251 of the Companies Act 1990. Her affidavit said she was not seeking to wind up the company, while reserving the right to apply for that later if needed.
The court also found that definitive closure had not been established. The rights commissioner’s October 2012 recommendation recorded that Glegola did not accept that a redundancy situation existed, that the company was not in liquidation and that it continued to trade. The judgment noted that a company solicitor’s letter said trading had ceased in November 2011, but said Glegola and the rights commissioner had not accepted that account.
Because neither requirement was satisfied, the court said the application failed at the first hurdle. It refused the application and did not determine the other issues raised, including whether the State had properly implemented the directive or whether the section 251 declaration could establish insolvency for the purposes of the fund.