Neale Richmond (Dublin Rathdown, Fine Gael) | Oireachtas source

I am delighted to have the opportunity to conclude the debate on this Stage. I appreciate the comments made by the Deputies this evening. I listened closely to the debate with the Minister, Deputy Coveney, yesterday. I will start by trying to respond to some of the comments and questions that were raised by Government and Opposition Deputies.

I welcome Deputy O’Reilly’s strong support for the Bill and I look forward to engaging further with her and other members of the committee on Committee Stage. I also welcome Deputy Nash’s strong support for the Bill, particularly the former Minister of State with responsibility for business and employment who initiated a review of employment and company law in the wake of the Clerys situation. In response to his comment on the level of redress provided under the Protection of Employment Act, as amended by the Bill, and as the Minister stated, this new form of redress is in addition to the existing rights under that Act, the Minimum Notice and Terms of Employment Act and the Unfair Dismissals Act.

Our focus is on creating a culture of compliance. We do not simply want to provide redress; we do not want redress to be required in the first place. What we want is for employers and others to comply with their obligations. The Workplace Relations Commission and Corporate Enforcement Authority both have a role to play in respect of different aspects of this culture of compliance and I am committed to ensuring that they can play their independent roles.

Reflecting the recommendation of the joint committee’s pre-legislative scrutiny report, my Department will update the collective redundancies information handbook, which was published in 2021, to reflect the changes in the Bill. This is a living document and will be updated as required.

I welcome the clear cross-party support from Deputies O’Reilly, Martin Kenny, Nash, Catherine Murphy, Marc Ó Cathasaigh, Cathal Crowe, Joan Collins and Pringle - to an extent, based on the tenor of the debate - for the statutory establishment of the employment law review group, ELRG. I agree that the group will add significant value to the review of employment law in the State. Its establishment will ensure our suite of employment and redundancy law remains robust and fit for purpose in the rapidly changing world of work. It is important to emphasise that the ELRG will be an expert and technical advisory group rather than a consultative group for social dialogue like the Labour Employer Economic Forum. Accordingly, its membership will be drawn from those with expertise in employment law, accountancy and insolvency professionals, academics, regulators and representatives of employers and workers. There will be an open call for expressions of interest and I will seek nominations from relevant bodies, including the WRC, the Labour Court, Departments and representative groups. The group's terms of reference will accommodate a non-statutory declaration of conflicts of interest.

A number of Deputies discussed the Duffy Cahill report in the context of Debenhams. The Duffy Cahill report was in response to narrow and specific terms of reference and where assets of significant value were separated from the operating entity before liquidation. The Government’s stated policy in this space – the Plan of Action on Collective Redundancies following Insolvency – considered and responded to each of the Duffy Cahill recommendations. Debenhams is the subject of an ongoing High Court-supervised liquidation, so I am reluctant to be drawn into too much of a discussion about it. As has been mentioned in the House, though, if anyone has information that suggests wrongdoing under company law, it should be brought to the Corporate Enforcement Authority's attention.

I fully acknowledge the impact on the Debenhams workers who were made redundant early in the pandemic. The Government always sought to ensure that their concerns were heard and the State’s welfare, employment and training services responded to their needs. The Government extends that same responsiveness to all employees facing the difficult prospect of redundancy. The Social Insurance Fund provides a safety net for employees to ensure they receive statutory redundancy and other wage-related entitlements in situations where the employer cannot pay due to insolvency. These rights have been honoured by the State in the case of the Debenhams workers at a cost of over €13 million. In recognition of the exceptional circumstances of this case, and as reflected in the report by the chair of the Labour Court, the Government also provided an additional €3 million fund to support career guidance, training, education and pre-retirement planning for the former Debenhams workers.

Deputies O’Reilly, Martin Browne, Ó Murchú and Boyd Barrett raised the matter of enhanced redundancy payments. All eligible employees are entitled to a statutory redundancy payment and, where an employer is unable to pay, the State steps in to ensure this is honoured. In an insolvency situation, employees are already considered preferred creditors in terms of wage arrears, outstanding holiday pay, pension scheme contributions and statutory redundancy. Their statutory entitlements are also guaranteed by the State via the insolvency payments scheme.

Enhanced redundancies over and above this statutory entitlement are a voluntary matter between employers and employees. Ireland’s system of industrial relations is based on a voluntary approach and collective agreements are not binding in law. Providing for enhanced employee entitlements would have serious consequences. It would risk creating two classes of employees, with a special class of worker who is made redundant due to insolvency granted enhanced legal rights that go beyond those afforded to workers who are made redundant for other reasons. This could be constitutionally unsound. It would have a knock-on effect on other creditors, such as SMEs and suppliers, who are themselves employers and who, due to liquidity issues, may find themselves making their workers redundant. As preferential debts include rates and taxation claims, the State is also a preferential creditor and such a proposal would adversely affect the Exchequer, depriving the taxpayer of moneys owed to local authorities, the Department of Social Protection and Revenue. It may also incentivise employers and employees to agree enhanced collective agreements ahead of insolvency situations in the knowledge that they will be funded from the sale of assets and-or State funding via the Social Insurance Fund.

Deputy Catherine Murphy queried the balance of rights that underpins the Bill. It is worth remembering that, while certain insolvencies have attracted negative headlines, most company directors want to do the right thing and do their best to act accordingly. Companies are entitled to arrange their affairs in a manner appropriate to their needs, provided those arrangements comply with the law. However, where there is non-compliance with the law, remedies and individual accountability are important. The Bill amends the remedies already available to creditors in those cases where assets are removed from the reach of creditors, but these changes are being introduced in a way that guards against unintended consequences.

Deputy Boyd Barrett raised the issue of costs. The question of costs is always something that a person going to court will have to weigh up. A review group considered the issue of improving access to civil justice and reported to the Minister for Justice on its recommendations for change, including reducing the cost of litigation. The Department of Justice considered the recommendations and published the implementation plan on civil justice efficiencies and reform measures in May 2022, which set out the approach to reforming the administration of civil justice in Ireland. Under this plan, the Department of Justice has considered that third-party funding should be available to liquidators to fund proceedings intended to increase the pool of assets available to creditors. This recommendation will be implemented by the Department of Justice through primary legislation, with a target date of being enacted in 2024. We will, of course, actively engage with our colleagues in that Department as necessary.

This is a significant and complex piece of work. It changes the employment, redundancy and company laws on the matter in a meaningful way. As has been remarked by a number of Deputies, this Bill was brought about after long-considered preparation by officials and stakeholders alike as well as a detailed pre-legislative scrutiny process. It is an important further step in implementing the outstanding legislative commitments in the plan of action, which represents the Government’s considered policy response to the complexities arising in such situations.

It is important to remember that workers already have robust legislative protections and safeguards as employees under employment law and as creditors under the Companies Act. This Bill will further benefit the workers of insolvent employers in a number of ways. It will improve awareness and increase transparency for employees of insolvent employers, improve access to the mechanisms that can increase the pool of assets available for the creditors, and provide for the statutory establishment of the ELRG, which will ensure employment and redundancy law is fit for purpose.

The Bill has been prepared in consultation with various stakeholders. In particular, I thank the Company Law Review Group for its considered work on the matter of company law and the Office of the Attorney General for its efficient preparation of the Bill. The Government’s response to the various crises has proven successful in mitigating the immediate impacts on companies. However, with the exceptional decrease in insolvencies in recent years, we now anticipate a reversion to pre-pandemic levels of corporate restructuring and insolvency in the coming months and years. Therefore, it is incumbent on us to strengthen further the already robust legislative protections and safeguards afforded to the employees involved.

I know that my colleagues recognise the importance of having an appropriate and considered legislative framework in place that deals with the generality of collective redundancies following corporate insolvency. I hope there can be cross-party support to ensure that we get this Bill enacted as soon as possible. I assure the Deputies that we have carefully considered the recommendations in the pre-legislative scrutiny report. In our analysis, some of those recommendations are not necessary. This is not because they are without merit, but because they are already addressed in law. I very much look forward to a further detailed engagement with Deputies on these issues on Committee Stage.

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