John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on this Bill and wish to make a couple of points concerning it. The CSO's jobs figures this week were promising and mark a significant step in the right direction, but there can be no complacency. The biggest task facing the Government is in creating jobs. It is particularly significant that this week's job statistics were good concerning the number of long-term unemployed people in which category there was a notable decrease.

The south east continues to have the highest unemployment rate in the country despite the fact that the latest CSO figures also show a reduction our region. It is imperative for State agencies to redouble their efforts to ensure that the south east recovers more strongly in future. I hope that can happen. The Bill's provisions will be positive not just for the country as a whole, but also the south east in particular. That is why I welcome it. The legislation before us is primarily concerned with the protection of existing jobs, given its revision of the existing Companies Acts vis-à-vis examinership. That is the major change contained in the Bill.

Even though I was very young at the time - I was a strange child and interested in politics - I recall being in primary school when the Companies Act 1990 was introduced. Deputy John Browne was a Member of the House then. It came in overnight in response to the perceived collapse of a significant national business. There was much controversy about it because it was rushed legislation. Ironically, however, the provision for examinership has not only been successful in Ireland, but has also been copied in many other countries around the world. The United States has Chapter 11, while Britain's provision for examinership, which postdates ours, is similar to the one we adopted in 1990. It basically allows a business to seek court protection for a 70-day period, which can be extended to 100 days, if a number of criteria can be satisfied. Chief among them is that the business can be kept afloat and survive as a going concern. In addition, the examiner must be appointed no later than three days following the appointment of a receiver, if one has been appointed.

A number of tests are contained within the case law that has happened since to determine when a business is commercially viable and when the terms of examinership can be extended to a particular business. Chief among those tests are the company's assets which can be clearly identified, and that the company's liability can be secured. The company's regulatory position must be clear concerning environmental matters, planning permissions or other outstanding issues, as well as the level of outside investment required to maintain the company's long-term sustainability beyond the period of examinership.

The provision has a number of positive points for the company concerned, including ensuring that the company owners can remain in control of it, and that the company has court protection for the examinership period. In addition, the company will maintain control of its intangible assets. The provision also has advantages for creditors in that existing commercial relationships can be sustained into the future if a company can be kept afloat and remain in business. The probability of a dividend with creditors receiving payment of outstanding moneys is greatly increased by a successful examinership. That is why the system has been successful. I fully support the Bill's provisions which stem from the much larger Companies (Consolidation) Bill, which has been lumbering its way through the Oireachtas for some months past. It passage has been slow primarily because it is the largest piece of legislation in the history of the State.

The Minister for Jobs, Enterprise and Innovation, Deputy Bruton, and other members of the Government identified two or three key areas that needed to be dealt with more quickly than would apply if they were to be included in the overall Companies (Consolidation) Bill, which is still before the Oireachtas.

The provision under section 2 which allows small private companies to apply to the Circuit Court for examinership protection is to be welcomed. The current position under the 1990 Act which necessitates an application in this regard to the High Court dramatically increases the costs of such an application, which for a small business can be hugely prohibitive. This provision, which allows small businesses to make such applications closer to where they operate and is available to companies whose turnover does not exceed €8.8 million and the number of employees does not exceed 50, is a necessary and positive change to the 1990 Act which, by and large, has since its enactment been very positive legislation.

I welcome section 9, which recognises the measures introduced by the Oireachtas under the Personal Insolvency Act 2012 and seeks to reconcile them with company law in this country. Sections 3 and 4 deal primarily with electronic filing of accounts with the Companies Registration Office. This initiative is aimed at streamlining and reducing the burden of costs, etc., on businesses wishing to be compliant with the Companies Acts. Section 5 streamlines another cumbersome provision of the current legislation and provides that in a situation where a designated officer named on a search warrant ceases to be an officer of the Director of Corporate Enforcement, the Director of Corporate Enforcement may seek to have another officer so designated on application to the District Court.

I welcome that the Minister has been able to expedite this aspect of the reform of company law in this country. His officials, who have been very busy over the course of the past few years in terms of the revision of company law, are to be highly commended in terms of their efforts in drafting this legislation. I support the passage of the Bill through the House.

See this speech in context