Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

1. To ask the Minister for Jobs, Enterprise and Innovation the actions he has taken to protect jobs following the closure of a department store (details supplied); if all relevant legislation has been complied with in this closure; the provisions he plans to introduce to avoid such closures in the future; and if he will make a statement on the matter. [28720/15]

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is nearly six weeks since the overnight take-out of Clerys by corporate interests that had no concern for those working and doing business in the store. I want to discuss with the Minister of State where we go from here. First, I want him to give an update on his work for the workers, the 134 Clerys' staff and the 330 concession holders' staff. Second, I want to tease out some of the issues raised in his report, particularly on section 224 of the Companies Act which provides that directors must have regard to the interests of the employees. It is very clear that on this occasion the interests of the employees were far down anybody's list of interests and the Minister of State needs to show how the Government will avoid this ever happening again.

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

We all agree that what has happened in Clerys is very shocking and quite appalling. Those who were directly employed by Clerys and the concession holders and their staff have been treated appallingly.

The House will be aware that last week I submitted a report to the Taoiseach and the Tánaiste to further inform the Government on the issues surrounding the sale and liquidation of Clerys. I also briefed my Cabinet colleagues on the report. A copy of the report, together with appendices, including documents submitted for the High Court hearing on 12 June and correspondence I have had with Natrium Limited, the new owners of the site, are available on my Department’s website. The report sets out the sequence of events leading up to the closure on 12 June, based on the information available; events since 12 June, including the engagement I have had with Clerys' workers and their trade unions, the provisional Liquidator and representatives of the 50 concession holders; and the efforts being made by the Department of Social Protection, the NERA and the liquidators’ staff to assist the workers in accessing their statutory entitlements.

The report also sets out the relevant employment and company law framework and identifies a number of issues for the Government to consider in what is an evolving situation, key aspects of which are under the jurisdiction of the High Court. The report indicates the areas of employment law that will be further considered. It also identifies the company law provisions that were designed to ensure just and equitable treatment for creditors in a liquidation, including provisions to ensure all assets that should be available to the liquidator can be accessed for the purpose of discharging a company’s debts. The liquidators have their job to do. In this respect, I understand that, at the hearing on 6 July, the High Court was informed that the liquidators had identified a number of matters which they intended to investigate as part of the liquidation process.

Separately, the Tánaiste has indicated that, given that workers’ claims for statutory redundancy and other statutory entitlements are falling to be met by the State from the social insurance fund, she intends to use every legal avenue available to her to vindicate the State's and taxpayers’ rights in this regard.

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As the Minister of State said, the liquidators are carrying out an investigation. They are setting up a committee of investigation which will include five representatives of creditors. Will the State seek to be one of these representatives, either through Revenue or a representative of the social insurance fund, in order that the interests of the State, both as a creditor and in finding out what exactly happened, can be reflected at the table in the liquidation? We have to stand from this issue. This did not happen in 24 hours; it had been in planning. Highly paid lawyers and accountants had planned it up to the last minute and those who were notified last were the workers and the concession holders. Therefore, somebody somewhere has been incredibly well paid. Gordon Brothers is laughing all the way to the bank, while Natrium is laughing at the Minister of State, the Government, this House and the workers and at the innocence of the State in thinking they have not got away with it. I ask the Minister of State to pursue the companies involved in terms of the responsibilities of directors. Also, what is his response to the proposals of the ICTU about the 30-day notice requirement?

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

Directors have responsibilities to their employees and it is questionable in this case whether these duties have been fulfilled, but that is not something we can settle here. There are very clear provisions in company law. I refer directly to sections 599 and 600. These provisions, taken together, refer to situations where a related company may be required, for example, to contribute to meeting the debts of a company which is being wound up. They refer also to the pooling of assets of a related company or companies. The House will be aware that this provision in the Companies Act 2014, originally included in section 118 of the Companies Act 1990, has yet to be tested. I have advised the Tánaiste directly that I believe it would be in the interests of the taxpayer and addressing the overall issues in this matter that the Department of Social Protection consider taking a place on the committee of inspection to be established by the High Court in the context of the liquidation and the winding up hearing. I have referred that matter directly to the Tánaiste. I believe advice is being taken in that regard and that the Tánaiste is taking additional advice on other matters that she could potentially pursue under company law.

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Under section 224 of the Companies Act, directors must have regard to the interests of employees. No one can say directors of any of the companies, shelf companies or otherwise, involved in this transaction have had regard to the interests of the employees. This is a chance to have the matter referred to the Office of the Director of Corporate Enforcement to send a signal that we will not allow this to happen again, that this cowboy capitalism which places workers who have given a lifetime of service so far down the list of priorities will not be allowed in this country. At some stage the Minister of State will have to make a call on whether he will make a complaint under section 224, or others will do so. Will he respond to the question on putting a representative of the State on the creditors' committee to monitor the liquidation?

Gerald Nash (Louth, Labour)
Link to this: Individually | In context | Oireachtas source

I referred to that matter in referring to the committee of inspection. This should happen. It is rare for the Department of Social Protection to be represented on such a committee, but in this case, given that, essentially, the Minister for Social Protection will become a preferred creditor when payments are made to staff who have been left high and dry because of this transaction, it is the appropriate thing to do. The liquidators also have a statutory obligation to provide for the Director of Corporate Enforcement, within six months of their appointment, a report on the conduct of the directors of the company and to assist him in carrying out his functions. As I understand it, in the context of the High Court hearing last week, a statement of affairs is also expected from the previous directors of the company who owned the Clerys site going back 12 months. That is an interesting development. No one can be satisfied with how this saga has played out. The Clerys staff and the concession holders and their staff have been left high and dry.

I have been doing my utmost to assist them as best I can. As we have said, this is an evolving situation and we will keep a very close eye on it.