Joan Collins (Dublin South Central, Independents 4 Change) | Oireachtas source

I move:

That Dáil Éireann: notes:

— the failure of the previous Government to legislate to implement the recommendations of the ‘Expert Examination and Review of Laws on the Protection of Employee Interests when assets are separated from the operating entity (Duffy-Cahill Report)’ which was commissioned following the closure of Clerys’ department store, and that this report made six recommendations aimed at protecting the rights of workers made redundant through insolvency;

— that a key recommendation of that report was that the State should have the right to chase up transferred assets and to use them to fund payments due to workers as per collective agreements; and

— workers at Debenhams Ireland are being denied their right to four weeks redundancy pay per year of service as per a collective agreement with their union, Mandate;

further notes the distinct possibility of a large number of closures and insolvencies due to the economic crisis caused by the Covid-19 pandemic, which could affect thousands of laid-off workers; and

calls on the Government to:

— introduce emergency legislation to implement the Duffy-Cahill Report recommendations as a matter of urgency; and

— examine the need for a ring-fenced insolvency fund, such as exists in several European Union states, to allow for all payments due to workers laid off by an insolvent company, which could be financed by a levy on employers Pay Related Social Insurance.

I am sharing time with Deputy Harkin. The priorities of a Government are shown not just by what it does, but also by what it does not do. That is precisely what we are dealing with here. When it comes to weighing up workers' rights against the interests of employers and business, Fianna Fáil and Fine Gael always know exactly where their priorities lie. In that regard, I am looking at amendment No. 1 tabled by the Minister for Employment Affairs and Social Protection, Deputy Humphreys. I know how I feel and the workers feel on this issue.

Following the insolvencies at Clerys and Connolly Shoes which left workers high and dry, the then Minister for Jobs, Enterprise and Innovation, Deputy Bruton, commissioned an expert review to examine possible changes to company and employment law to protect workers in situations of tactical insolvency. The expert review, known as the Duffy Cahill report, made six important recommendations. The report was welcomed by the Irish Congress of Trade Unions and the Clerys workers but was vehemently resisted in the consultation process by the employers body, IBEC. IBEC recommended no action be taken. Surprise, surprise, that is exactly what happened. As I stated, the priorities of a Government are shown by what it does not do and its inaction in order to serve certain vested interests.

What precisely was called for in the report? It made six recommendations which essentially relate to employment law. The first recommendation was for the removal of the insolvency exception in regard to an employer notifying the Minister of a collective redundancy, thus allowing all redundant workers access to the 30-day consultation period. This would give unions an opportunity to negotiate and allow employees to be paid for at least 30 days. Second, it recommended the imposition of ade factoobligation on a decision maker, that is, a company the actions of which may cause insolvency. The third recommendation was to increase redress for workers for a failure to notify and consult. The fourth and probably most important recommendation proposed that the State be given the power to recover assets or proceeds to cover the cost to the State - the taxpayer - in situations of tactical insolvency. The fifth recommendation related to a statutory power to injunct and the sixth recommended an enhanced redundancy payment where an agreement was in place or there was a reasonable expectation of payment in excess of the statutory two weeks per year allowance.

The recommendation relating to assets is key to the solution to the issue facing the workers laid off by Debenhams Ireland.

If the Duffy Cahill recommendations had been implemented, the State would be in a position to pay the four weeks' redundancy due and then chase up Debenhams to recover the €10 million cost. Debenhams workers point out there is stock worth €25 million in all the 11 stores in Ireland. KPMG, the liquidator, has valued the stock at €12.5 million at cost, not sale, price. There is also the asset of Debenhams' online business, which the workers reckon is worth up to €30 million, which was transferred out of Ireland to the UK this summer.

The claim made by the Tánaiste and Minister for Enterprise, Trade and Employment that Debenhams is not a tactical insolvency does not stand up to the facts, which are that assets were transferred to the UK and debts were transferred from the UK to Ireland. The State must move to legislate and do so as an emergency measure. The Dáil has enacted emergency legislation on numerous occasions over recent years, particularly in bailing out the banks.

The liquidator must be instructed to extend the consultation process while such legislation is being enacted. Indeed, the State, as a gesture of its good intentions, should now pay the Debenhams workers what they are owed from the Social Insurance Fund with the intention to recover the cost from Debenhams at a later date.

This is an issue which will not go away. A tsunami of insolvencies can be expected in the next few months. A total of 69.500 companies are availing of the wage subsidy scheme. Many will not survive as the scheme is reduced and phased out altogether.

Even with the recommendations of Duffy Cahill enacted in law, there will be circumstances whereby there will simply not be liquidity or assets to meet workers' entitlements. That is why I have raised in this motion the need for a special insolvency fund. Such funds exist in many EU countries and are used to pay redundancies, wages due, holiday pay, etc. to laid-off workers. In Germany, this fund is resourced by a 0.6% payroll levy on employers. In Ireland, we have the lowest level of employers' PRSI in the EU, at 10.75% - less than half the EU average. I know there will be a hue and cry from employers about tax on jobs, but this would be a solidarity insolvency fund. We pay our PRSI for health. It means that those workers who are healthy pay into a fund to support those who are sick. The concept is solidarity and this is what should be done here for workers who have been laid off through tactical insolvencies. I note the Government amendment states that this is a useful suggestion to be examined. There is no commitment and we can expect no action. Regarding the Government amendment's rejection of the Duffy Cahill recommendations, what we have is a cut-and-paste job from IBEC's submission to the consultation process set up after the report.

Then there is a contradiction in the Government's amendment. After stating clearly there is no need for any change as per the review of the Company Law Review Group, we are promised yet another review. It is clear the Government has no intention of acting on these important issues. Workers' rights, to my mind, are simply not a priority of the Government.

I placed this Private Members' motion on the agenda today because the ex-employees in Debenhams last week took the action of occupying two stores. They raised the issue again and we debated it in the Dáil. I was hoping that the Government would come back with something much more urgent, thought out and detailed in support of these Debenhams workers, the St. Mary's Telford workers where the Sisters of Charity are trying to go into liquidation, and workers in the future. That is what we wanted today. We are not getting it. I am calling on the Dáil to make an exception for once to make workers' rights the priority.

See this speech in context