Ms Nessa Cahill:

I echo what Mr. Duffy said and I am also happy to come before the committee and to assist in any way I can with the report, which Mr. Duffy and I prepared in 2016. As Mr. Duffy outlined, I will address the company law aspects of our report.

The essential company law question presented by the terms of reference is whether, and, if so, how, the Companies Act 2014 may be amended to address the situation of employees of an insolvent company that has inadequate resources to discharge their accrued entitlements, in circumstances where valuable assets were transferred to another entity before the liquidation. The report considers some of the potentially relevant provisions of the Companies Act 2014, with particular focus on three provisions, which appear to be of most direct relevance to the terms of reference:

Section 621 enshrines special protection of employees in the context of liquidations by ensuring that certain employee debts such as wages and salaries rank as preferential debts in a liquidation. This is complemented by section 42 of the Redundancy Payments Acts 1967 as amended, which provides for priority for statutory redundancy payments.

Section 608 provides that when a company is in liquidation, the court, on the application of the liquidator or a creditor or contributory of the company, can order that a person who appears to have the use, control or possession of a property "of any kind whatsoever" or the proceeds of sale of that property, must deliver this property or pay this sum to the liquidator. This is only possible if it can be shown to the court's satisfaction that the property in question was disposed of and the effect of the disposal was to perpetrate a fraud on the company, its creditors or its members.

Section 599 allows for an order to be made that a company related to the company in liquidation must pay to the liquidator the amount of the whole or part of all or any of the debts provable in that winding up. This may only be done on the application of the liquidator or any creditor or contributory of a company, and only if the court is satisfied that it is just and equitable to do so having regard to the matters stipulated in that provision.

The report concludes that, by contrast with the applicable employment legislation, the provisions of the Companies Act 2014 that are already available do not appear to be in need of amendment. However, the report notes that many of the provisions of the Companies Act that may be of assistance are not frequently invoked such as section 608 or are not invoked at all such as section 599. The reason for this appears to relate to the costs and risks associated with such applications rather than the formulation of the provisions themselves.

In response to this difficulty, proposal No. 4 in the report refers to the possibility of conferring a power on the Minister, as creditor of an insolvent employer, having paid the employee claims through the Social Insurance Fund, to delegate the taking of statutory applications to the liquidator and to provide funding to the liquidator for that purpose. The report, accordingly, does not propose any amendments to the Companies Act 2014, but rather considers possible mechanisms to facilitate and extend the use of the existing provisions of the Companies Act in the protection of employees' interests.