Seán Sherlock (Cork East, Labour) | Oireachtas source

In respect of the question posed by Deputy Tóibín as to whether or not we will take any amendments on board, the amendments are put forward and we respond to them. We have taken a clear position on them and believe that the legislative process is such that it produces robust legislation. However, there are some points we can consider for Seanad Stage in the Seanad. We may look at the court of jurisdiction, which is an area raised by the Deputy in connection with employee issues.

In response to the amendments put forward as they are grouped, we are not in favour of adopting these amendments. We must keep reiterating that the Bill is only concerned with company law. In general terms, company law concerns itself with the fiduciary duties a director owes to the company alone while recognising that a director ought to have regard to the interests of his or her employees. It would be wholly inappropriate to include the proposed provisions in the Bill.

Legislation governing employee rights should be considered in the context of employment law. We have stated this several times in the context of other amendments tabled by Opposition Deputies. By addressing such a matter in a company Bill, the provision is not providing protection for all employees, such as sole traders or those working in partnerships.

Second, employment law already provides for redress in less cumbersome and costly fora than the High Court. Third, and equally importantly, it must also be borne in mind that company law must balance the rights of all creditors, many of whom are employers in their own right, in winding-up situations. I appreciate what the Deputy is attempting to achieve with these proposed amendments but the simple fact is that company law is not the correct vehicle for these ambitions. Therefore, we are not in favour of these amendments.

Amendment No. 168 suggests that a company may be wound up in court where it owes an employee or a group of employees more than €1,500. The Bill sets the limit at €10,000, as it was considered that a greater balance and proportionality must be achieved in circumstances where the severe sanction of wind-up is concerned. The section does not distinguish between an employee and any other creditor. In the circumstances, any creditor is entitled to issue a letter demanding payment and if, after 21 days, such payment has not been received the creditor is entitled to petition the High Court. I am sure the Deputies present can appreciate that petitioning the High Court is not a simple or low-cost exercise. It would have to be questioned whether winding-up is really the most effective way to settle a debt of €1,500. It must also be borne in mind that there are provisions in both employment and health and safety law, alongside common law remedies, which already provide for the type of situation described. For example, the Payment of Wages Act 1991 provides more efficient remedies for employees who have not been paid their wages than an attempt to have the company wound up in the High Court, with all of the associated costs.

Amendment No. 169 would fail in substance as prosecutions thereunder would be doomed to fail due to the ambiguity of the phrase "breaches of employment law". There is no indication as to what is meant by this. Such provisions are workable but only in the context of the specific and appropriate enactment, where the transgressions are clearly identified or identifiable. Finally, the amendment proposes that the separate legal personality of the company would be proceeded against for a transgression of civil law rather than criminal law. In all of the other circumstances where this phrase is used, as with health and safety legislation, for example, it requires a criminal offence.

Amendment No. 175 suggests that the value of the preferential treatment of employees should be increased to €40,000. The principal benefactors of section 622 are the employees of the company and the Revenue Commissioners. The period for which the calculation is based, in the context of employee salaries or wages in respect of services rendered, is four months before an order to wind up, the appointment of a provisional liquidator or a passing of the resolution for the winding up of the company is made. The sum of €10,000 is considered to offer sufficient protection for employees in these circumstances.

I understand the Deputy's intention with these amendments. However, we also need to consider that there are other creditors whose rights must be protected in a winding-up situation. The Bill seeks to offer a fair balance to all.

See this speech in context