Employees working for an insolvent company will have to be given at least 30 days' notice of redundancy, under new legislative reforms to be introduced by the Government.

The proposal is part of a new Department of Enterprise, Trade and Employment Action Plan to boost the rights of employees hit by insolvency - an issue highlighted in recent years by the controversial closures of Clerys and Debenhams.

At present, collective redundancies cannot take effect until after a statutory 30-day period of notification to employees.

However, this does not apply to collective redundancies triggered by insolvency - due to an exemption in Section 14 (3) of the Protection of Employment Act 1977.

The Government is now planning to remove that exemption "with a view to providing greater clarification to employees and resulting in enhanced transparency".

"Where a redundancy arises due to company insolvency, it has been decided that an employee may be placed on temporary lay-off by the liquidator for the duration of the 30-day notification period (with the employment termination date to coincide with the expiry of the statutory 30-day period)," the Action Plan states.

"An employee in these circumstances would be eligible to 'sign on' and claim a Jobseeker's Payment during this period in the usual way as a consequence of being placed on temporary lay-off."

The department has also told congress that on foot of a recent Company Law Review Group (CLRG) report - and a minority report submitted as part of this process by ICTU - it will also be recommending nine actions to improve the quality and circulation of information to employees as creditors.

The proposed changes to company law would clarify the powers of the liquidator to bring or defend proceedings before the Workplace Relations Commission and/or the Labour Court.

The liquidator or a director of the company would also be obliged to ensure creditors were informed that they have the right to form or participate in a Committee of Inspection - and any such committee must include at least one employee creditor member.

In yesterday's letter to Congress General Secretary Patricia King accompanying the Action Plan, the Ministers of State with responsibility for Employment Law and Company Law Damien English and Robert Troy confirmed to congress that the Government will also establish a new statutory Employment Law Review Group to ensure the legal framework remains fit for purpose in the contemporary environment.

It is understood that this body will act independently, with the chair appointed by the minister, with experts from employment law, business, unions, state bodies including the WRC and the Labour Court, as well as representatives of government departments.

Following the controversial insolvencies at Clerys and Debenhams, unions had demanded legislative changes to boost workers' rights, including higher priority as creditors, and a levy on employers to fund enhanced redundancy terms provided for in collective agreements pre-dating the insolvency.

The Programme for Government contained a commitment to "review whether the legal provisions surrounding collective redundancies and the liquidation of companies effectively protect the rights of workers".

In their letter the ministers confirm that the department has examined procedures in other jurisdictions.

"While a workable model was not realised during this examination, the department maintains current awareness in relation to emerging trends from other member states that might assist in the formulation of innovative employment law solutions, and these may be considered in the future. It should, however be noted that Ireland's current regime for statutory redundancy entitlement compares very favourably with our EU counterparts," they said.

"Notwithstanding the above, it is of course open to employers and unions to work together to establish a separate fund with a view to providing enhanced redundancy benefits on a voluntary basis."

The ministers also confirm that the work to address these issues has been carried out to ensure that the relevant framework is "robust and responsive to the provision of the fullest possible protection to employees whose employment has ceased due to their employer becoming insolvent".

Congress General Secretary Patricia King acknowledged some progress had been made in key areas, and that clearly a lot of consideration had been given to the ICTU position - though not on all issues.

She said that while some progressive amendments were to be made, there were others that they would have to continue to discuss.