Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

Fairness and decency at work sum up the aspirations of all working people throughout the world in their working lives. This involves opportunities for work that are productive and deliver fair outcomes, security in the workplace, better prospects for personal development and social integration. In Ireland it means, among other things, paying a living wage and giving decent terms and conditions of employment to vulnerable workers. Fairness and decency at work cannot be achieved by codes of practice or whimsical employer benevolence but must be assisted by effective legislation that will right the enormous imbalance of power between employers and employees. Business models based on a race to the bottom in standards inflict damage not only on workers but also on the prospect of sustainable growth for all.

Legislating for fairness and decency will benefit society because there is an enormous connection between decent treatment and improved economic performance. Fairness and decency at work means addressing the abuse of zero-hour and low-hour contracts. It indicates a real desire to abolish bogus self-employment contracts. It entails finally confronting the scourge of workplace bullying through the enactment of effective legislation. It would mean ensuring that service workers enjoy the same protections as every other worker under the transfer of undertaking regulations. It also necessitates change in legislation to extend insolvency protection legislation to workers who are left without wages and other compensation when the employer ceases trade. Fundamentally, we need nothing less than employment rights that are fit for the 21st century to make people feel secure and productive at work. The motion before the Dáil this evening shows how we are looking to the Government to provide a fair framework of law and to promote fairness and decency in the context of employment practices. In other words, this motion is simply putting forward a workers' agenda - nothing more, nothing less.

We welcome the Clerys workers to the Gallery. We met them earlier today. Of course, we are all aware of the situation that arose in Clerys: the liquidation and the developments and how matters were resolved. The principal disquiet that arose from that issue was the fact that the insolvency was preceded by a company restructuring, which involved separation of the trading business that employed the staff from its major asset, namely, the Clerys building. When the operating company was declared insolvent and went into liquidation, the employees lost their employment without any notice - some of them learned about it on Facebook - or any consultation. They did not have payment under statutory entitlements, but this was remedied by the right to recourse to statutory entitlements through the Department of Social Protection because the State is obliged to pay all sums of money due to companies' employees. It is the Department of Social Protection that bears this cost, approximately €2.5 million. However, employees in a situation such as that faced by the Clerys workers, some of whom had 46 years' service, some of whom had decades of very sterling and worthy service to the company, were left not being able to negotiate an enhanced redundancy package going beyond the statutory minimum. They therefore lost out hugely, not just their work but also any compensation that they could claim.

An employer insolvency in a case such as this impacts on two sets of legislation. Employee protection is covered by the Redundancy Payments Acts, which provide a statutory minimum entitlement to redundancy payments. In addition, the Minimum Notice and Terms of Employment Act 1973 confers a right to payment of wages in lieu of notice. Finally, outstanding wages, holiday pay, commission and bonuses are protected by the Payment of Wages Act 1991. In the first instance, it is the responsibility of the employer to make these payments. If, however, the employer has disappeared into a situation of insolvency, legislation provides for payments by the Department of Social Protection. Then there is the collective redundancy legislation. Under the Protection of Employment Acts 1977 to 2007, an employer who is contemplating a collective redundancy is obliged to enter into consultations with a view to reaching agreement with staff representatives. These consultations must take place at the earliest opportunity and at least 30 days before the notice of redundancy is given. The aim of the consultation is to consider whether there are any alternatives to the redundancies. However, certain provisions of the Act are stated not to apply to employees in a business which is being wound up, and the reason given for this approach to date is that where an insolvent firm goes into liquidation, it can no longer trade. It can no longer accrue debts as it is in no position to discharge. It would be difficult to keep staff on the books, expecting them to work merely to serve out a 30-day notice period, where the employer has no resources to pay those staff. Neither would the staff need this if it merely delays access to social welfare.

As Deputy Howlin stated earlier, there have been a number of developments in response to the issues raised at Clerys liquidation, including the report to the then Government by the former Minister of State, Senator Ged Nash, dealing with the application of the Companies Act. Section 599, which was first enacted in 1990 and re-enacted verbatim in 2014, is about bringing assets of a connected company into a liquidation on the grounds of fairness and equity. This is borrowed from New Zealand legislation. It does not apply in the United Kingdom, Canada or Australia. Since 1990, it has never been invoked. This is the area that should be focused upon. It seems designed to suit the situation that has arisen in Clerys, indeed it is custom built to do so.

It is time to throw off the shackles and utilise the legislative section to pursue the issue that has arisen in Clerys. We do not know if it will be effective until it is tried. Let it be utilised and tested on this occasion to bring in assets of an associated company where there has been unfairness meted out to creditors, such as the employees. The sole object of this transaction was to leave the State carrying the can for the redundancy of the employees. It, in effect, represented an engineered bill being presented to the Department of Social Protection. If an ordinary person overdraws, over claims or makes a claim that is not justified, he or she is rightly pursued, even if it is only €200, €2,000 or whatever. We now have a chance to pursue persons for over €2.5 million. Let us try it. We are saying that Clerys was closed and the valuable assets were extracted from the company. The insolvent company was put into liquidation and sent out all the bills, such as redundancy bills, holiday pay and sick pay, directly to the Department of Social Protection. What transpired in this case will be attempted again if it escapes without question and without detailed investigation. Let us utilise existing law to see if it works and if it does not work, let us come back here - that is our job - to change it and bring forward laws that work. There should be no foot-dragging in that regard. I am sure we will get the advice of the Attorney General which the Minister is entitled to get.

I will not say too much about the authorised officer because that is before the courts to determine whether the requirements of the Protection of Employment Act 1977 were satisfied. Contravention of the Act is an offence punishable on summary conviction with a fine of €5,000. The issue here is there is a 12 months' time limit on prosecutions which are brought in the name of the Minister and therefore they must be brought by 11 June next.

We have expert reports in this area. The former Ministers, Deputy Richard Bruton and Senator Nash, announced a twin-track examination of protection in law for employees and unsecured creditors, particularly to ensure that limited liability and-or corporate restructuring cannot be used to avoid a company's obligation to its employees and unsecured creditors. They appointed two experts to examine the legal protection for workers, particularly where operations and assets may be moved to separate legal entities as part of a restructuring. This examination would specifically look at situations where valuable assets in a company are separated from the operating entity and how the position of employees can be better protected in such situations. Mr. Kevin Duffy, chairperson of the Labour Court, and Ms Nessa Cahill, an experienced company law specialist and barrister, were given eight weeks to examine existing legislation and also consider a new solution on how best to protect innocent workers in such cases. The then Minister's deputy requested the Company Law Review Group to examine legislation with a view to recommending ways company law could be amended to better safeguard employees and creditors.

As the Minister, Deputy Mary Mitchell O'Connor, will be aware, Ms Cahill and Mr. Duffy have reported. Their focus was on how the interests of employees could be more effectively safeguarded where collective redundancies arise from liquidation following restructuring in which assets had been put beyond the reach of the liquidator or been transferred to a related person. Among other measures they proposed was that employees should in future have a right to consult with their employer for a minimum 30 days' period before a collective redundancy can take place, whether the employer is insolvent or not. Where a related company or person is contemplating a significant decision in regard to an asset that will lead to collective redundancies, such as refusing to renew a lease or a sale of a property, the company or person should be obliged to notify the employer who would be obliged to trigger a 30 days' consultation period with employees. Compensation for failing to respect employees' rights on 30-day consultation period should be increased from four weeks' pay to two years' pay. I refer here to section 608 of the Companies Act 2014. Where the employer transfers assets out of the business with the effect of perpetrating a fraud on employees, there should be a mechanism for recovering the assets or the proceeds of a sale.

The priority is to ensure that a situation such as Clerys would never happen again. Our commitment in the Labour Party has always been that if the law is tested and proves to be ineffective, then it must be corrected. However, the jury is still out on the view taken by Ms Cahill and Mr. Duffy that the Companies Act remedies "that are already available do not appear to be in need of amendment, but more in need of use". It is now over to the Minister.

I also want to address the issue of workers who are in formal insolvencies. I have met numerous workers who have fallen foul of this. Over the past number of years, those of companies in retail, construction and the hospitality sectors have gone through the formal insolvency process, such as receivership, liquidation, bankruptcy or some other process recognised by law and, as a consequence, employees in those companies are able to apply to the State's insolvency fund for up to eight weeks' arrears of wages, holiday pay, minimum notice and third party awards where the insolvent employer is not able to pay. I refer to the Protection of Employees (Employers' Insolvency) Acts, 1984 to 2004.

However, employees in companies that fold up, as Deputy Niall Collins as a solicitor would know well, and stand static are actually prevented by law from applying to the statutory insolvency fund. Such employees cannot recover unpaid wages and other amounts due like their colleagues in employments which have taken the proper insolvency routes. They are left at a serious disadvantage. I am aware of persons who are owed €30,000 and €40,000 in this way. The fact is that employees in such circumstances are left bereft of not only their employment but also their due payments. I believe it is in breach of European law because a 2008 employers insolvency directive, in Article 2(4), specifically provides for protection of employees in insolvency situations, such as the informal ones to which I am referring, where payments have been stopped on a permanent basis. The High Court recently made reference to that, which points to an inherent unfairness in the current law in the Republic. A solution to this problem would be for the Government to amend the existing legislation in line with the directive. That was the original proposal in the 1984 Act. This could then cover what is called "informal" or deemed insolvencies where the employer has given up trading or where payments to employees have ceased for six weeks or more. At present in such circumstances all one can do is enact the regulation under existing powers pertaining in section 4(2) of the 1984 Act. An application under these regulations could then be dealt with by the Department of Social Protection which already has responsibility under the solvency payments Act and the Redundancy Payments Bill 2003. There are many issues here.

One of the issues I have been concerned about over the years is that we have no statutory redress for bullying. Everybody agrees that workplace bullying is totally unacceptable but the time has come to take the long-awaited step of incorporating appropriated redress in employment law. To date, there has been an abject failure in respect of legislative innovation in this area, and one must go to court. It is an increasing problem in the workplace and it has negative effects, both for the alleged victim of the bullying and the employer. For the alleged victim, one often finds him or her in stress and ill health. Such workers' productivity drops off and, of course, their career development stalls. For the employer, the workplace can become dysfunctional, with poor morale and, maybe, costly litigation. There is an increased level of complaints but the insufficiency of existing measures to tackle the problem is leading to great frustration for both the employer and the employee, and there is no formal channel for resolving bullying complaints. By contrast, harassment and sexual harassment claims which are clearly and narrowly defined in the Employment Equality Acts, can be processed through the Equality Tribunal and eventually the Labour Court if necessary. In contrast, the worker making a bullying complaint has no defined redress under employment law. The lack of a statutory call to action set out in the legislature has meant that the task of developing and applying an appropriate course of action has been left to the courts and to lawyers, and such a route is invariably costly, time consuming and traumatic for all of the parties.

The task force on bullying of 2006 commented adversely on the lack of formal procedures to deal with bullying and called directly for legislation to be enacted to give effect to these proposals. Legislation should define workplace bullying, give an outline of the internal procedures that need to be put in place to deal with bullying complaints, and outline the formal route for adjudication on bullying complaints which has to be legally sound and cost effective. One must have a comprehensive definition of bullying. It needs to incorporate the tenets that bullying occurs when an individual or group of individuals behaves unreasonably towards a worker or a group of workers. One has to describe the type of behaviour which is unacceptable and state that such behaviour must be deemed to create a risk to health and safety at work. Then one must set out the use of internal procedures and the third-party adjudication that, eventually, a complainant can apply to the Workplace Relations Commission, which is now the one-stop shop for formal adjudication in the matter. The director of the Workplace Relations Commission can also dismiss claims if, in his or her considered opinion, the claim is frivolous.

Regarding redress, one could give an order for a specified person to take a specified action or for compensation of up to two years' pay. Ultimately, one can appeal to the Labour Court in the manner laid out in the Workplace Relations Act 2015.

Bullying is a major issue and it is surprising where it happens. In many places across the State, there are semi-State companies where it might surprise the Minister that zero-hour contracts and casualisation of employment is being applied. It must stop. Over the coming weeks, I intend to find out how many State or semi-State companies are engaged in this practice. It would be a very bad example if any State or semi-State company were engaged in any such practice. We want to stamp it out. We have the report from Limerick, which we should act on and implement.

These are pointers given in a constructive fashion by the Labour Party. The Minister will find us a constructive party. We are unashamedly returning to 1912 and 1913 to pursue a workers' agenda. Woe to the begrudgers.

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