Marian Harkin (Sligo-Leitrim, Independent) | Oireachtas source

First, I congratulate my colleague, Deputy Collins, for bringing forward this motion because it lays bear the completely unacceptable and totally disgraceful situation whereby redundant workers are being deprived of agreed redundancy payments due mainly to the transfer of company assets.

The core question that we are asking here today is how the law can protect employees during the redundancy process and help ensure that limited liability and corporate restructuring are not used to avoid a company's obligation to its employees. We have sound reasons to believe that the Duffy Cahill report provides many of the answers to that core question. We know existing provisions do not work. We can see what has happened to the Clerys workers and now the scandalous situation regarding the Debenhams workers. The Duffy Cahill report has as its main objective an examination into ways in which a similar occurrence can be avoided in the future and that, of course, refers to what happened to the Clerys workers. If some or all of those recommendations had been implemented, it is likely that the Debenhams workers would be paid their rightful entitlements. As Duffy Cahill states in regard to the Clerys workers, "While the transaction that produced this result may have been lawful, it is difficult to avoid the conclusion that it would be preferable if it were not." Amen to that. Ask any of the exhausted Debenhams workers pounding the streets for more than 100 days.

Duffy Cahill looks at the situation where assets are separated from the operation, the operating entity subsequently becomes insolvent and goes into liquidation, and how in those circumstances we can ensure the legitimate interests of employees can be more effectively safeguarded. The report is comprehensive and it does not rush headlong into new legislative proposals. For example, it examines whether more effective use could be made of existing employment legislation. It looks at how employees could negotiate better terms and conditions beyond their statutory entitlements, whether employees' entitlements could be ring-fenced in the event of a transfer of assets, and many other questions. Unfortunately, time does not allow me to go through them in detail. The essential point here is this is a considered and detailed report which puts forward reasonable, credible and workable proposals to help safeguard redundant workers' entitlements.

Deputy English, as Minister of State, and the Government do not want to see Debenhams workers left without their rightful entitlements. Expressing regret and sympathy is fine as far as it goes but it is utterly useless. It is basically redundant for the redundant workers because it does not solve their problem and it will not solve similar problems in the future. Everybody, no matter which side of the House he or she is on, recognises that we need to amend our legislation and, if nothing else, this report provides a sound basis for doing that.

I was especially interested to look at some of the legislation that we now have in place and its inadequacies to protect workers who are made redundant where companies transfer their assets. Much of this legislation is derived from EU directives.

Some protections are in place. For instance, more than 1,500 workers made redundant by Waterford Crystal were able to use EU legislation to vindicate their rights and entitlements and the European Court of Justice, ECJ, ruled in their favour and against the State in the case of underfunding of a company pension scheme. However, it is never easy to take on the power, might and resources of the State. Those workers did and they established those rights not only for themselves but for all Irish workers for which I congratulate them. Nevertheless, the Duffy Cahill report's forensic examination of existing provisions in Irish law that derive from EU legislation shows that these provisions, as we already knew, are inadequate to protect redundant workers in the situation of transfer of assets. Some European countries, including Germany and Austria, have unilaterally established levy funds on private sector employers for this very purpose because EU legislation does not provide the required protections. One of the main reasons for this is the existence of a strong tradition of collective bargaining in these countries, something that is missing in Ireland.

I will take a closer look at some of the relevant legislation. The Protection of Employees Act provides for consultation of workers. However, it is telling that a successful case was taken against Ireland to comply with the requirements of the underlying directive, the Collective Redundancies Directive. Ireland had to rewrite our legislation comprehensively after we lost the case. We had legislation that allowed employers to allow someone else to control the operation and hide behind an assertion that they did not know what was going on, but the ECJ insisted Ireland change that legislation. It is incredible that such a get out clause was there for Irish employers and perhaps it indicates something far deeper about how we sometimes transpose EU legislation. I do not have time to deal with that today, but it is one of several examples I know of where EU legislation was not transposed into Irish law with a view to protecting an individual, the ordinary person or worker, but rather sought to insulate the State in some cases and corporate interests in others from adhering to requirements of specific EU legislation.

I was most interested in the directive on the protection of employees in the transfer of undertakings. Unfortunately neither the directive itself nor our legislation provides any realistic mechanisms for protecting workers in cases where the essential assets of the business, as opposed to the business itself, are transferred. None of our employment law as it stands could be safely relied upon to provide redress in the current situation.

Another area worth examining is the Companies Act. It has some potential where any transfer of assets was conducted with the intention of perpetrating a fraud, such as deliberately to deprive redundant workers of their rights. If this could be proved in a court of law, there could be redress. However, tellingly the Duffy Cahill report states that in regard to any court application the likely complexity and the costs it would entail would make it an unattractive prospect for creditors with limited resources, which surely describes the Debenhams workers. No worker and no trade union could attempt to use the provision in the Companies Act because they could not afford it.

The legislation must be amended to provide protections to redundant workers in the case of transfer of assets. The Duffy Cahill report lists six proposals for this which my colleague, Deputy Joan Collins, has gone through in detail. Taken together they could provide the missing safety net for workers who find themselves in the position in which the Debenhams workers now find themselves. These proposals are credible, well researched and have sound legal basis. I ask the Government to give them the serious consideration that they deserve.

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