Damien English (Meath West, Fine Gael) | Oireachtas source

I move amendment No. 1:

To delete all words after “Dáil Éireann” and substitute the following: “extends its sympathy to the employees of Debenhams Ireland who have lost their jobs given the liquidation of the company;

acknowledges the distress and worry that this is causing for employees of Debenhams Ireland, and the added difficulty at the present time when mobility remains restricted;

notes that:

— Debenhams Ireland is undergoing a court-supervised liquidation, and that the case remains before the High Court and accordingly is sub judice;

— a company cannot merely assert that it is insolvent, it must apply for an official court liquidation and as such the liquidation will be under the supervision of the Irish courts system;

— the Companies Act 2014 already provides for a court power to order the return of assets improperly transferred in appropriate cases;

— the Workplace Relations Commission continues to be fully operational and available to any interested parties who may require it;

— the Government’s job loss protocol has been activated for employees of Debenhams Ireland putting in place all available supports and information for workers, including on welfare entitlements, job-search assistance and upskilling needs and opportunities;

— the Protection of Employment Act 1977 imposes a number of obligations on employers who are proposing collective redundancies;

— in respect of redundancy entitlements, it is the responsibility of the employer in the first instance to pay statutory redundancy and other wage related entitlements to eligible employees;

— the Social Insurance Fund provides an important safety net for employees in situations where the employer cannot pay statutory redundancy due to financial difficulties or insolvency; and

— the State will guarantee statutory employment rights to the workers of Debenhams;

recalls that in response to concerns in earlier cases, the then Government, in 2016, commissioned two reports in parallel: the 'Expert Examination and Review of Laws on the Protection of Employee Interests when assets are separated from the operating entity (Duffy-Cahill Report)' in March 2016, and the report of the Company Law Review Group (CLRG) on 'Protection of Employees and Unsecured Creditors' in June 2017;

recognises the need for the Government to have a strong focus on job creation, training and reskilling in the July Stimulus announcement and forthcoming National Economic Plan, given the number of people whose employment has been threatened or lost as a result of the Covid-19 public health emergency;

further notes that the Tánaiste and Minister for Business, Enterprise and Innovation will meet with Debenhams worker representatives; and

endorses the intention to immediately commence the Programme for Government’s commitments regarding employee protections by:

— reviewing whether the current legal provisions surrounding collective redundancies and the liquidation of companies effectively protect the rights of workers;

— reviewing the Companies Act 2014, with a view to addressing the practice of trading entities splitting their operations between trading and property, with the result being the trading business (including the jobs) goes into insolvency and the assets are taken out of the original business; and

— examining the legal provision that pertains to any sale to a connected party following the insolvency of a company including who can object and the allowable grounds of an objection."

I welcome this opportunity to discuss these important matters and their impact on more than 1,000 Debenhams workers and their families, as well as the suppliers with stock in those outlets. The focus of tonight's motion is the employees and everything they have been going through for more than 100 days since they got that devastating news. We all recognise the very difficult position they are now in. As a country we are in difficult times. Among other things, this was one of the first groups of employees to be hit hard by the fallout from Covid-19. There is recognition throughout the country of their plight. People support them and there is a great recognition of the important role that those involved in retail have played in recent months. Most people now have a greater recognition of the service they provide.

I have particular sympathy for the Debenhams employees because I have met a lot of them over the years. I have shopped there many times myself. I am not sure about others, but I have certainly been there on many occasions and they always provided a top-class service and were very pleasant people to deal with. The Tánaiste, the Minister of State, Deputy Troy, and I found the same thing when we had a chance to meet the employees' representatives and some of the employees themselves. We met Ms Valerie Conlon and Ms Carol Quinn earlier today. As some of the Deputies have mentioned already, both Valerie and Carol have been working there for decades. Valerie worked there for 24 years and Carol, who is herself from Cork, has been there for more than 30 years. They are very committed.

Those representatives put the case very strongly today and we had a very successful and solutions-focused meeting to discuss what we can and cannot do. The Tánaiste, the Minister of State, Deputy Troy, and I listened to them intently. We were very pleased to meet them and understand where they are coming from. We want to see what the Government can do in response and how the legislation can work for them, or in some cases cannot work.

I wish to express my sympathy and that of my Government colleagues for those Debenhams employees and for all those who have lost their jobs as a result of this. We all recognise that Debenhams staff have given loyal service for many decades. It is an awful shame that this has happened to them. Today one could see the pain they are going through. Having given such loyalty, they really feel let down. We also got that sense from the workers we met before today. It could be seen in their eyes that they felt totally let down after giving dedicated service for many years. It is important that we have this conversation to see how we can help them. We must focus on solutions.

We recognise that this is a difficult situation for them and their families. I am acutely aware of the timing of this, occurring as it has during the Covid-19 pandemic, a difficult time for many people in the country. The Government is working in a co-ordinated way to support everyone who faces the prospect of losing his or her job and all of those who have already lost their jobs in recent months. The job loss response protocol was immediately activated for the employees of Debenhams. This brings together all available supports and information for them, including information on welfare entitlements, job search assistance and upskilling opportunities. It is important that this work continues even though a discussion is ongoing. The workers have their own picket, but it is important that all the Departments and agencies of the State step up immediately and do their jobs as quickly as they possibly can.

Regarding job losses and efforts to sustain businesses more broadly, it is hoped the Government will publish the July stimulus plan this week. That will strengthen the Government's effort to save and create jobs and save businesses on behalf of the taxpayers of this country. As outlined in the programme for Government, the July stimulus will be followed in October by the national economic plan, which will be published on the same day as the budget. Many colleagues of all parties will feed into that. They have already contributed suggestions and ideas for legislation as well as for the July stimulus plan to be announced this week. In October, we will set out a long-term approach to restoring employment and the economy. As the Minister of State with responsibility for employment affairs and retail businesses, I am quite clear about the serious situation that sector will be in. It has gone through as difficult a time as any sector in this country, with many changes affecting it. That has now become a lot more serious. We have a lot of work to do where the retail sector is concerned. We must work with the sector, its representative bodies and its employees. It is a very important sector with great opportunities, on which we must expand.

All of these economic initiatives must be centred around employment, retaining jobs wherever we can, creating new ones to replace jobs that might be lost, and providing a strong focus on quality employment with good terms, conditions and work-life balance. The qualifications and retail excellence built up by someone who has worked for more than 30 years were quite clear from today's meeting with the Debenhams employees. They have a skill that is transferable to many other sectors. I have previously been a Minister of State with responsibility for skills, research and innovation. I am keenly aware of the skills of those working in the retail sector.

I recognise that the workers of Debenhams have immediate questions and concerns on the redundancy payments they will receive as a result of the liquidation of this company. Again, we met officially with the representatives of the Debenhams workers to hear their views and concerns. It was clear to us from that discussion that the engagement between the liquidator, the company and the union representing employees has not yet concluded. They are working very closely together, having engaged in previous situations. It is important to note that the State will ensure that the statutory employment rights of the Debenhams are recognised. There is quite strong legislation behind that, as we discussed here last week. The information and customer service of the Workplace Relations Commission can provide information on employment rights and equality and industrial relations matters. That body provides a very good service. I also recognise that the Debenhams liquidation is court supervised and remains before the High Court. These legal proceedings will need to conclude and it is essential that nothing prejudicial is said here tonight. We have borne that in mind when moving the Government's amendment. The resources available for distribution towards debts owed to employees and to other creditors, including State creditors, have not yet been confirmed by the liquidator. This is work is ongoing.

I acknowledge that this is an exceptionally difficult situation for Debenhams employees and for the many small business owners who are suppliers to the company and have stock tied up in this. The Debenhams employees and their union recognise those concerns also. They are waiting for answers and are understandably concerned. Anybody running a small business now is in a difficult situation. I am aware that the Debenhams employees have raised the issue of collective redundancies. The redundancy payments to be made to employees in a collective redundancy situation are a matter between an employer and employees in the first instance. The employees had negotiated additional terms for themselves in recent years, and rightly so. However, the Social Insurance Fund provides a safety net for employees in situations where an employer cannot pay statutory redundancy payments due to financial difficulties or insolvency.

Several legitimate questions about the rights of employees when a company goes into liquidation have been raised tonight and in recent weeks. These are particularly pressing issues given the number of people whose employment has been threatened or lost as a result of the Covid-19 public health emergency. Responding to this, the Government made several important commitments in the programme for Government. Specifically, the Government will review whether the current legal provisions on collective redundancies and the liquidation of companies effectively protect the rights of workers; review the Companies Act 2014 with a view to addressing the practice of companies splitting their operations in advance of an insolvency so that the assets are taken from the original business; and examine the legal provisions around sales to a connected party following an insolvency, including who is entitled to object.

The Tánaiste and the Department are asking the Company Law Review Group, CLRG, to examine these matters as a matter of priority. That work has been ongoing for some time.

When it concludes, the Government will be ready to act and to propose legislation where it can achieve improvements.

It has been noted that the Duffy Cahill report of 2017 made a number of recommendations on the protection of employee interests, with a focus on specific cases where interests are separated from the operating company. That report was sought by the former Minister, Deputy Bruton, and the former Minister of State, Deputy Nash, when they were in the Department of Jobs, Enterprise and Innovation. The Company Law Review Group also made recommendations in 2017 regarding the protection of employees and other unsecured creditors. Both of those sets of recommendations will be reconsidered as part of the work the Government is commencing. It is important work, not least given the more difficult economic conditions we face and the unwelcome prospect of more business failures and job losses into the future.

It is necessary and right that we look to see how the statutory framework can be improved to better protect workers' rights, as the Government is doing. However, we should not lose sight of the fact that we have a strong legal framework for dealing with insolvency, and it includes provisions to deal with improper actions. Under the Companies Act 2014, a company cannot merely assert that it is insolvent. It must apply for an official court liquidation, which will be under the supervision of the High Court. The Companies Act provides, in section 608, that liquidators or creditors of an insolvent company can, in appropriate cases, obtain a court power to order the return of assets which have been improperly transferred. The Act also provides, under section 559, that a related company may be required to contribute to the payment of debts owed by the company being wound up. These and other statutory provisions, and the associated civil and criminal penalties, provide an important deterrent to improper actions by companies facing an insolvency. It is worth recalling that the Duffy Cahill report found that "the provisions of the Companies Act 2014 that are already available do not appear to be in need of amendment, but more in need of use".

As I have outlined, there is a strong and comprehensive statutory framework already in place for dealing with insolvency. No such framework can be a panacea for the cost of business failure for workers and other debtors, including other businesses, but the legal framework does provide clear remedies and sanctions where there is illegal conduct, as well as rights and protections for employees where collective redundancies are in view. By way of the commitments in the programme for Government, we will be looking to see how and where this framework can be further improved for workers, and we will consult all Members in this regard. Across all fronts, the Government will maintain a strong focus on job creation, training and reskilling in the July stimulus and the forthcoming national economic plan. These are the Government's priorities and commitments to workers at Debenhams and across our economy. I commend the Government amendment to the House.

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