Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I propose to take Questions Nos. 3 and 4 together.

The recent closures of HMV and the Old Darnley Lodge are very regrettable. My thoughts are with those directly affected, the workers and their families and the wider local communities. Their concerns about the future of their jobs and the payment of money owed to them by their employers are of paramount importance.

There is a body of legislation to protect workers in such situations such as the Payment of Wages Act 1991, Redundancy Payments Act 1967 – 2007, Protection of Employment Act 1977 and the Minimum Notice and Terms of Employment Act.

When I became aware of the evolving situation in both companies, I asked the National Employment Rights Authority, NERA, to contact the workers involved in the sit-ins, and to mobilise NERA resources to answer workers’ queries on their employment rights.

In the case of HMV, my Department established a direct line of contact with the receiver from the outset and I was assured that communicating with staff would be a priority. I understand that, over the weekend, the HMV receiver secured the agreement of staff to discontinue their sit-in in return for his commitment to arrange for payment of wages this week. The HMV receiver has indicated he is making every effort to find a buyer for the Irish operation. I understand that the receiver has issued employees with letters notifying them that they are on temporary lay-off, pending an outcome to his efforts to secure a buyer.

In relation to the Old Darnley Lodge, my Department, through NERA, is offering employees ongoing information support in relation to the processing of any outstanding entitlements, including redundancy entitlements.

On the general legislative front, employees left without pay and redundancy payments by an insolvent employer are protected in legislation and are entitled to receive outstanding payments from the Social Insurance Fund, which is administered by the Department of Social Protection. NERA can assist workers to establish the position regarding their rights.

On the issue of preventing employers from injuncting workers occupying the place of work, it should be noted that the Industrial Relations Act 1990, subject to certain prescribed conditions being met, contains a number of provisions affording immunity to persons who organise or engage in trade disputes from civil liability. The Act also places restrictions on the right of employers to obtain injunctions in certain dispute situations. However, the Act does not place restrictions on the seeking of injunctions in cases of unlawful action, for example trespass, sit-in, occupations, damage to property, or actions resulting in or likely to result in personal injury or death. Where an injunction along the lines mentioned by the Deputy is sought, it is a matter for a court to decide, based on the circumstances of the case, whether or not such an injunction is warranted.

As regards the suggestion that pay and redundancy should be prioritised, I point out that in instances where a company is being wound up, employees, in relation to pay etcetera, are preferential creditors under the Companies Acts. Initial priority in terms of disbursement of assets belongs to super preferential creditors, that is the Revenue Commissioners on behalf of taxpayers in respect of any PRSI deductions made by the employer. The liquidator’s costs are next in priority. The employees, the Revenue Commissioners and the rating authority rank next in priority. Holders of fixed charges and mortgages are outside the liquidation process and can enforce their security in accordance with the terms of the deed of charge or mortgage.

The proposal on public ownership of enterprises which close peremptorily is not a viable option. The reality is that the economy has gone through a profound crisis as a result of policies which allowed the economy to become dependent on property, construction and debt. The economy must now make a transition to one that is sustainable, built on enterprise, innovation and exports. While the Government actively promotes policies designed to assist enterprises at risk of losing jobs, it is not viable for Government to take responsibility for running businesses which cease to be viable. In addition, there are EU rules regarding operating aid to be considered.

As far as the sale of gift vouchers is concerned, consumer protection law prohibits traders from engaging in unfair or misleading commercial practices. Aside from general advice regarding gift vouchers, the National Consumer Agency issued a public statement in the run up to Christmas urging consumers to use gift vouchers as quickly as possible. Consumers who have used payment cards to purchase vouchers from retailers who cease trading have been advised to contact their card issuer. The agency’s full advice and public statements in relation to the purchase of gift vouchers can be obtained from its website.

Additional information not given on the floor of the House.

The Deputy has asked whether I plan to change consumer legislation in view of recent events. In these situations, customers holding unredeemed gift vouchers are effectively creditors of the retailer. The priority of creditors is determined in accordance with section 284 of the Companies Act 1963. Any measure which would require that unredeemed vouchers should always be honoured would mean that holders of such vouchers would rank in priority over the interests of all creditors, including the interests of employees, the taxpayers and other ordinary creditors. I do not consider that such a measure would be appropriate or justified.

On the question of giving workers and the State sight of company accounts, under the Companies Acts, limited companies are required to file annual accounts with the Companies Registration Office. That office strictly enforces this requirement and in general all filed accounts are available to the public from the CRO. In addition, mortgages and debentures over a company’s assets must be registered in the CRO, providing further information on a company’s level of indebtedness

In summary, I am satisfied that the current body of employment rights and industrial relations legislation, backed up by the information and enforcement activities of NERA and the redress available to workers through the State’s workplace relations bodies, provides robust protection for employees, even in these very difficult circumstances. I am similarly satisfied with the protection provided by consumer protection legislation, backed up by the services of the National Consumer Agency. Accordingly, I do not intend to amend the relevant legislation as suggested by the Deputies.

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