Damien English (Meath West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It would be wrong to say there is consensus because we are still working through this. There is a general sense, certainly in our Department, that we may be able to strengthen the position in this area. There are two consequences to that. The Deputy is right that one of the consequences involves the director's responsibilities in continuing to trade in such a situation for those 30 days when it is effectively insolvent. This needs to be teased out and could result in other serious complications. My understanding is that this was considered before with the Company Law Review Group, which did not recommend changes here. We are trying to tease that out. I think the word used by Mr. Duffy was "dignity". The very least one would achieve during that process would be a reasonable conversation with employees to respect their dignity and have a chance to tease through all the situations involving a company. It is a very difficult time when there is an insolvency because the company is effectively going broke.

It is different if there are assets involved or decisions have been taken at earlier stages which affect that. In most cases, an insolvency is a very difficult time for employees. We can see that in respect of Debenhams, which was mentioned. It has been a very difficult time. We are trying to see if we can allow for that 30 days of consultation. The other part of that is what it can achieve and if it would be effective. We would then have to try to define what the consultation is and what it covers. There is consensus that if we could do that, it would be the right thing to do in that situation. There would seem to be consultation in most cases but in other cases, insolvencies take place overnight because the creditor might make a move. It is not always straightforward but we are looking to try to do that.

The other issue is what happens to employees during that time. The committee discussed at its previous session access to social welfare entitlements and who pays employees during the 30-day consultation. If employees still employed but there is no money to pay their wages, technically they would not be entitled to social welfare payments. We are examining how we could address that issue. My reading of it is that it is fixable. None of those with whom I have engaged has spoken against trying to address this issue.

On the hiding of assets, the Duffy Cahill report, while not referencing any one case, dealt with hypothetical cases where assets had been stripped, hidden or sold off. That does not mean that the pattern is similar in every situation but that is the one the Duffy Cahill review was asked to examine. The view in the report, and of our team and the company law review that current legislation allows for those assets to be chased down. It is clear, however, that it has not been used. Part of the question we are asking all the stakeholders is why it has not been used. Is it too expensive or too difficult or is it too hard to try to prove a case? That is the issue we are teasing out to see how we can improve that situation. It is desirable that we do it and we are asking if we can do it or what needs to be done.

The Deputy asked me if there is evidence of that practice in a current case. That case is before the courts and the court's duty is to decide that in conjunction with the liquidator and all the creditors. I have seen no evidence that that is the case here. I have heard commentary on it but no one has presented any evidence to me that that is the case. The situation the Deputy mentioned is probably different from other ones that were discussed originally in the Duffy Cahill report. Much of that report dealt with cases where there is an asset. I have not seen evidence of that and none has been presented to me but others will judge that. That is the purpose of the courts. The law is there to protect but we will see if we can make the law more user-friendly. The Tánaiste has committed to doing that work and it is under way in the Department. We will try to have that finished by the end of December.

Recommendation 4 was related to collective redundancies and the potential fund. Deputy O'Reilly asked me my view on that. The Department has not expressed a view on this. We are facilitating a conversation on the issue to see where it ends up. We will express a view when we have finished the consultation. The proposal is to establish a new fund that would honour collective agreements. Collective agreements are negotiated in companies, very often at an earlier stage of a company's restructuring when it wants to reduce the number of employees or make other changes. They are very often negotiated at an earlier stage, not necessarily at an insolvency stage. That issue must be teased out. What is being suggested here is that a fund would be established, probably at the time the agreement is made, that could pay for the agreement at a later stage. In fairness, the majority of companies working with trade unions and employees enter such collective agreements assuming they have resources to pay them. The position may change, however, in an insolvency years later. In that case, how would that play out? If there were a fund in place, as Deputy O'Reilly and others have referred to, it could be tapped into to pay for that. Who should contribute to such a fund? Not everybody has a collective agreement or enhanced entitlements. Should everybody pay into such a fund? That is the question we are asking.

If we draw on the State's Social Insurance Fund, it would mean every employer and employee had paid into it. We have to tease that out because not everybody would agree with using that fund or find it appropriate to use it. The percentage of employees covered by collective agreements is smaller that those covered by the Social Insurance Fund. We will discuss whether there should be a register of collective agreements that is visible and transparent in terms of where they are and who has them. That question may have been asked previously. That is an issue we want to tease out, which is exactly what we are doing. It would probably be appropriate to engage with the committee again at the end of this process. It is not that I am being awkward but it would be wrong of me to give an answer to this when it is being teased out.

The final question was on recommendation 6.