Paul Gavan (Sinn Fein) | Oireachtas source

I move amendment No. 2:

In page 13, after line 32, to insert the following: "Amendment of Act of 2014

28. The Act of 2014 is amended by the insertion of the following sections after section 621:

"Power of the Court to return assets which have been improperly transferred

621A. (1) The court has the following power where, on the application of the Minister or the liquidator and/or employee representative and

employees’ recognised trade union in respect of a situation in which collective redundancies have arisen in circumstances in which the

employer is insolvent, it can be shown that—

(a) the employer is unable to fully discharge the debts owing to the employees,

(b) any property of the company of any kind whatsoever was disposed of either by way of conveyance, transfer mortgage, security, loan or in any way whatsoever whether by act or omission, direct or indirect, and

(c) the effect of such a disposal is to perpetrate a fraud on the company’s employees by leaving inadequate resources to discharge the entitlements of the employees who are subsequently made redundant as a result of the employer’s insolvency.

(2) The power of the court is to order, if it deems it just and equitable to do so, any person who appears to have—

(a) the use, control or possession of the property concerned, or

(b) the proceeds of the sale or development of that property, to deliver it or them, or pay any sum in respect thereof, to the liquidator on such terms or conditions as the court thinks fit.

(3) If the Minister makes a payment to employees pursuant to section 10 of the Protection of Employees (Employers’ Insolvency) Act 1984, then the Minster shall have the right to make an application under subsection (1) in order to recover the sum expended.

Preferential Creditor status for employees

621B. (1) Assets or value accrued pursuant to section 621A, form part of the assets of the employer for the purposes of the liquidation and shall be distributed in accordance with section 621.

(2) Notwithstanding the generality of the foregoing, payments due to discharge the entitlements of the employees who have been made redundant as a result of the employer’s insolvency shall have priority to all other debts.".".

This amendment seeks to provide protection for employees in collective redundancy cases where the employer is insolvent, to give power to the High Court to return assets that have been improperly transferred and to give preferential status to employees. It builds on the Duffy-Cahill report recommendation to ensure limited liability and corporate restructuring are not used to avoid a company's obligations to its employees.

For years, workers, trade unions and Opposition politicians have been seeking legislative protections for workers' collective agreements. The Government outlined its intentions to deliver legislative improvements in that area through this Bill. While any improvement in this area is welcome, Sinn Féin has been clear that the Bill does not address the situation whereby workers are treated as unsecured creditors for the purposes of their collectively bargained redundancy agreements. Treating them as such means this debt to the workers is not prioritised along the same lines as are wages and statutory redundancy. This matter must be addressed. It is for this reason that I proposed this amendment.

During collective redundancy cases in the event of liquidation, the phrase "a company's obligations to its employees" is used frequently, as it was used in the Duffy-Cahill report. It is on this point that I am focusing this amendment. We cannot have companies engaging in what are known as tactical insolvencies, whereby they break the company up into different components, sell off the parts that are profitable, walk away with the money and leave the operational parts intact, with the State and workers having to shoulder all the liabilities. On several occasions, we have seen tactical liquidations used by companies to make workers immediately redundant and deny them their collective redundancy entitlements.

While every situation is unique, the overarching aim of what was done with Debenhams, Clerys, Paris Bakery, TalkTalk and La Senza, to name but a few, was to defraud workers and the State. I hope there will be unanimous support for this amendment, which seeks to prioritise workers in such horrendous situations.