Dáil debates

Wednesday, 4 November 2015

Ceisteanna - Questions - Priority Questions

Company Closures

9:30 am

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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1. To ask the Minister for Jobs, Enterprise and Innovation the status of his Department’s investigations and follow-up after the closure of Clerys; and if he will make a statement on the matter. [38077/15]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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Five months on what is the position in the investigation into the closure of Clerys? What legislative proposals will the Minister undertake between now and the general election, particularly in the light of the forthcoming legislation on workers' rights?

Photo of Gerald NashGerald Nash (Louth, Labour)
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On 6 July 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 Government colleagues on the report, a copy of which is available on my Department’s website. It sets out the sequence of events leading up to the closure on 12 June based on the information then available. It also sets out the relevant employment law and company law framework.

The Deputy will be aware that the liquidation of Clerys is in the hands of liquidators under the supervision of the High Court. The High Court was informed at the hearing on 6 July that the liquidators had identified a number of matters which they intended to investigate as part of the liquidation process. I understand the liquidators will report back to the High Court in due course. The liquidators have important duties under company law, including an obligation to provide, within six months of their appointment, a report on the conduct of directors for the Director of Corporate Enforcement and a requirement to make an application to the High Court for the restriction of directors, unless the Director of Corporate Enforcement has relieved them of this requirement.

On the establishment of the Office of the Director of Corporate Enforcement, ODCE, in 2001, the existing functions of the Minister relating to the enforcement of the Companies Acts transferred to the Director of Corporate Enforcement. These functions included the investigation of suspected offences under the Companies Acts and prosecuting detected breaches of the Acts. Neither I nor the Minister, Deputy Richard Bruton, has any investigative function under the Acts. The Director of Corporate Enforcement is independent in the exercise of his statutory functions.

I have been informed by the Department of Social Protection that, with the exception of three pending payments, all former Clerys employees have received their full statutory pay-related entitlements.

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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My difficulty is that it could have happened again at the weekend. Thankfully, the employers who have taken over Arnotts are committed to growing the business and employment in it, but five months on the same situation could have been unveiled at the weekend. On ICTU's proposals regarding facilitating a consultation period before redundancies, for instance, there are issues such as this could be done to try to delay proceedings.

I understand the Office of the Director of Corporate Enforcement, ODCE, is separate, but does the Minister of State have a timeline for when its investigations will be completed? Is the ODCE aware of the significance of this case in terms of the message it sends because it is not being dealt with while the office is looking into it? The message it sends is that it is okay to treat workers like something on a peg in a shop that can be just thrown away overnight and that unscrupulous business people can get away with that behaviour, which is unfair to workers. We know that the reality is different, but while Natrium has got away with it - five months on it looks as if it has - all of the agencies involved in investigating the matter should be aware of its urgency and the necessity of preventing it from recurring. As regards the Minister of State's responsibilities, with legislation being brought forward, how does he respond to the various ICTU proposals revolving around a consultation period?

9:35 am

Photo of Gerald NashGerald Nash (Louth, Labour)
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The various proposals made by ICTU generally relate to company law and the conduct of directors. I know that ICTU representatives have met my ministerial colleague, Deputy Richard Bruton, in that regard. It is worth making the point, however, that the report I published in a timely fashion after the closure of Clerys and the related events takes that issue very seriously. It suggested, as I recommended, that the Department of Social Protection become a member of the committee of investigation, which essentially is a committee of the court and an important part of the liquidation process which is ongoing. It is only when all of the facts and events leading up to the winding up of Clerys are fully known, with any legal challenge that could potentially be initiated in that respect, that an informed decision can be made on whether any amendment to company law is required. As the Deputy knows, company law is continuously kept under review domestically and in the European context, as well as through the work of the company law review group. The group's current work programme includes items on winding up, receivership and examination.

We are all troubled by and distressed at the way in which the Clerys workers were treated. There is an ongoing liquidation process, at the conclusion of which the Government and I hope any subsequent Government will not be found wanting in providing important protections for workers given what happened at Clerys and in the context of the lessons learned from it. We are all very concerned about the situation at Clerys.

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I acknowledge the speedy report and its directness, but the reality is that it could happen again, despite the sentiments expressed in the Minister of State's report. Section 224 of the Companies Act states directors must have regard to the interests of employees and that this is among the fiduciary duties of company directors. Surely there is scope within that section to ensure what happened will not recur. I am conscious that there is an investigation taking place, but the liquidator has one month left in which to provide a report for the ODCE. Has the Minister of State asked the ODCE to put him on notice when the report is received? If so, as soon as it is received from the liquidator, his departmental officials will have sight of it to take action, if necessary.

Photo of Gerald NashGerald Nash (Louth, Labour)
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I have a close personal interest, apart from a political interest, in how this matter evolves. I expect that, given my interest in the issue and that of the Minister, Deputy Richard Bruton, the ODCE will keep us informed. There is a huge amount of public interest in this issue. Decisions will have to be taken by the Government and Departments on the next steps to be taken. It would be remiss of me, however, to make any statement on the matter before the process has been concluded. The Clerys liquidation process is in the hands of the liquidators under the supervision of the High Court. We will assess the position when that process has been concluded.