John Halligan (Waterford, Independent) | Oireachtas source

I am sharing time with Deputy Mattie McGrath.

I support many aspects of this Bill. A commitment the Minister made before his election was to introduce it. In the short time available to me I want to speak on the benefits to SMEs afforded by the Bill. Sadly, it does not address the issue of companies dealing with workers' rights. The Minister may well say this should not be part of the Bill, but, having spoken to many trade unionists and company representatives, I believe it should. SMEs provide more than one third of all private sector employment in Ireland. As we know only too well, the financial crisis is having a severe effect on them.

There is much to be welcomed in the Bill. Many of the changes it proposes to introduce should help small and medium-sized businesses, in particular. I especially welcome the changes that will allow for some of the 12,500 private companies limited by shares which are established every year to incorporate more easily. This will result in an average saving of €1,200 in professional fees in each case. Anything that can be done to save jobs and keep businesses trading is welcome. The Bill's introduction of an affordable examinership regime will make the process a more accessible and affordable option for SMEs.

Under current legislation, only 1% of SMEs are using the courts to enter into examinership to try to trade out of their difficulties owing to the high costs they would face. I certainly hope it is true, as some industry experts are predicting, that the Bill, once enacted, will double the number of SME jobs saved this year. Perhaps the Minister might go into some detail on why he believes this will be the case.

The sad reality is that no matter how many companies or jobs are saved by opening up the examinership process, hundreds of companies will be lost, having gone into receivership. Approximately 2,000 company insolvencies last year resulted in receivership or liquidation.

This was a 43% increase on the previous year. We need to find out the reason for this and to examine in more detail what can be done to help companies which want to remain in business but are finding it difficult, because of existing legislation, to do so. The Minister should as part of this Bill introduce measures to protect workers in this instance. It is appalling that we are allowing a situation to prevail whereby staff who have lost their jobs have to engage in sit-ins to obtain moneys owed to them. As the Minister will be aware, workers are often the most vulnerable when a company goes into receivership or liquidation. In such circumstances workers should be paid first. Currently, this is not the case. Invariably employees are not the cause of a small or large business going bust yet when a liquidator is appointed they are the last on the list to be paid. It is wrong to allow this treatment of people who often have given many years of service to a company.

In one case in which I was involved - a pound shop in Waterford which went into liquidation - the liquidator told the employees that the store would be cleared out and that everybody from the ESB, gas company and product manufacturers would be paid and they would not. This is fundamentally bad treatment of people who deserve better and who had no hand, act or part in a company going into liquidation in the first instance. Often the amounts they are owed is very small. It may only be a week's wages, holiday pay or over-time payments, which amounts are not extraordinary in the larger scheme of a company going bust. I accept and understand that companies run out of money and go bust. However, it is wrong that we do not have in place legislation to protect workers where this happens.

A case in which I am currently involved relates to workers who are still fighting for redundancy payments three years after the company closed despite that an employment appeals tribunal ruled in their favour. I dealt with another case involving a UK based company which ceased its Irish operations and left its workers high and dry. I am currently dealing with another company, the workers of which were told it was going into liquidation, that they could do nothing about it and that the company would try to get them their statutory redundancy but which the following day re-opened under a different name having taken on new employees for less money. It is fundamentally wrong that people can be treated like this. I agree that companies are suffering and that we must do everything we can to help them remain profitable and in existence in the current circumstances. Anything we can do to help them must be done. However, we also have a responsibility to the many people who helped such companies become profitable and remain open, many of whom have taken a 24% to 30% cut in wages. These people should not be thrown on the scarp heap and left to fend for themselves. It can take up to six months to get a hearing with an appeals tribunal and up to six or seven weeks, sometimes longer, to obtain a social welfare payment. These workers have families and children but are being left to fend for themselves while we enact legislation to ensure companies, their management and directors are treated well. I am not too sure if what I am proposing can be provided for in this legislation or would need to be addressed by way of additional legislation. However, I ask that the Minister give consideration to it. The Minister needs to get his act together in terms of the introduction of tighter legislation to protect not only companies, which I accept should be protected, but their biggest asset, namely, their workers.

The Department of Finance conference last week was told that the chief barrier to growth for all small and medium sized enterprises is not as one might believe access to credit but an inability to find consumers for their products and services. I did not want to let this opportunity pass without making reference to this issue. The drop in demand for goods and services will be exacerbated as long as the Government continues to hack away at the incomes of low and middle income families. Small and medium sized businesses are our largest employers. As I have stated previously, the biggest problem with which SMEs are faced having paid rates, rent and workers' wages is a lack of customers coming into their shops an so on to purchase their products. It is important not to let this opportunity pass without saying that. Under Croke Park II, some workers were asked to take a reduction in pay that was equivalent to the 11.7% they had already lost. I strongly urge the Government, if it wants businesses to succeed, to bear this in mind before proceeding with any further public sector pay cuts or austerity measures.

I compliment the Minister on the introduction of this lengthy Bill, all of which I have not had time to read. It is important we make it easier for companies to produce, display and sell. Small companies will say that legislation, regardless of that for which it provides, means nothing if the consumer does not purchase the products produced, be it tea, a car or a meal. As I stated earlier, I do not have a problem with this Bill but would welcome a response from the Minister to some of the issues I have raised, including on the SMEs and companies which go into receivership or examinership. I ask also that he consider the introduction on Committee Stage of amendments to compel companies which go into liquidation to look after the rights of the employees who worked for them and helped to build them and who are often the last to be looked after when a company goes bust.

See this speech in context