Niall Collins (Limerick County, Fianna Fail)
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33. To ask the Minister for Jobs, Enterprise and Innovation the status of his investigations and follow-up following the closure of a company (details supplied); if all company law provisions were complied with; and if she will make a statement on the matter. [15766/16]

Niall Collins (Limerick County, Fianna Fail)
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I am asking for a status update on the review by the Department of the Minister of State, Deputy Pat Breen, and the review by the Office of the Director of Corporate Enforcement into the sudden closure of Clerys. The Minister of State will appreciate that it is now 15 June and that the company closed three days ago last year. We have just passed the first anniversary. Clerys was iconic and was trading on O’Connell Street in Dublin for 162 years. It had 134 direct employees and in excess of 300 employed by concessionaires within the store. The news was very disturbing across so many levels. The closure was even discussed during a recent Private Members’ debate. So many issues arise in regard to employment law.

Pat Breen (Clare, Fine Gael)
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I thank Deputy Niall Collins for raising this issue. The closure of Clerys department store and the manner in which its workers lost their jobs was totally unacceptable and should not happen again.

A number of actions were initiated as part of the Government’s response to the closure of Clerys. They included the Duffy-Cahill expert examination of legal protections for workers. The Duffy-Cahill report was published on 26 April last, as the Deputy knows. It makes a number of proposals for reform of the law. My priority now is to complete the public consultation to allow for a response to be brought forward for consideration by the Government. I remind the Deputy that the consultation is to finish this Friday.

The Company Law Review Group was asked to review company law. This was with a view to recommending ways company law could be amended to ensure better safeguards for employees and unsecured creditors. The work of the Company Law Review Group is progressing in this regard.

Separately, authorised officers have sought information from a number of parties regarding the collective redundancies that took place in OCS Operations Limited on 12 June 2015. This work is ongoing. However, one of the parties from whom the authorised officers sought information initiated proceedings in the High Court challenging the powers of the authorised officers. As the matter is before the court, it would not be appropriate for me to comment any further.

With regard to compliance with company law, this is ultimately a matter for the court to decide in any particular case before it.

Niall Collins (Limerick County, Fianna Fail)
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I want to focus on a couple of areas. We all agree it is imperative that the legal framework that we put in place be fit for purpose in dealing with any future case similar to that of Clerys. I also want to focus on the Protection of Employment Act 1977, which provides that where an employer is considering collective redundancies, there is an obligation to consult employees and provide certain information to employees for the purpose of the consultations. This was obviously lacking in the example of Clerys. Flowing from that, workers’ representatives have campaigned. The Duffy report recommended the removal of the insolvency exemption from the prohibition on implementing collective redundancies during the consultation period.

Section 14 of the Protection of Employment Act provides for the exemption from the prohibition against giving effect to collective redundancies until the expiry of 30 days after the notification to the Minister in circumstances of insolvency. Does the Minister of State support the 30-day notice requirement under the Protection of Employees Act 1977 in so far as it would apply to all collective redundancies, including in the case of Clerys?

I wish to focus on section 224 of the Companies Act 2014. It states directors shall have regard to the interests of employees. It provides that "The matters to which the directors of a company are to have regard in the performance of their functions shall include the interests of the company's employees in general, as well as the interests of its members." The directors obviously have an obligation to themselves, their shareholders and the company but, equally, they have an obligation to the employees. Is the Minister of State happy that section 224 of the Companies Act 2014 was complied with in the case of Clerys? Can he comment on that? My other question was on the 30-day notice requirement under the Protection of Employment Act.

Pat Breen (Clare, Fine Gael)
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I thank Ms Nessa Cahill, a company law specialist, and Mr. Kevin Duffy, the chairman of the Labour Court, for the work they have done. They are very distinguished, professional people. As the Deputy knows, the idea behind the report was to focus on limited liability in corporate restructuring and the view that it would not be used by a company to avoid meeting its obligations towards employees.

The Protection of Employment Act 1977 imposes a number of obligations on employers who are contemplating collective redundancies, including the obligations to consult employees and to provide certain information to employees for the purpose of the consultation. As I said, authorised officers sought information from a number of parties, but since the matter is sub judice, it would not be appropriate for me to comment any further on it.

With regard to the company law aspect, about which the Deputy spoke, the report does not propose that any amendments be made to the existing provisions of the Companies Act 2014. However, it does state in clear terms that the existing company law provisions provide substantial weaponry that could be used against directors and related companies to redress the effects of and deter harmful transactions.

These provisions are only of weight if the persons are employed and seen to be employed. The report makes proposals designed to facilitate and support the use of these proposals in future cases.

Niall Collins (Limerick County, Fianna Fail)
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While we all appreciate that much of this discussion is technical and observers could reasonably ask what it is about, we must also bear in mind those whose lives and jobs have been seriously affected by this case. We must also have regard to the fact that the Oireachtas cannot dictate to the courts how quickly they should act or what decisions they should make. Notwithstanding this, a degree of urgency is required.

Section 599 of the Companies Act deals with the relationship between companies and, more generally, provides mechanisms whereby one company can be required to contribute to the indebtedness of the other. As the Minister of State is aware, the Clerys case involved a multi-company structure. The Duffy-Cahill report states:

It therefore seems that section 599 is a potentially useful provision to address the concerns outlined in the Terms of Reference. It is only when this provision has been tested by the courts that any necessary amendments may become apparent.

In reply to a recent parliamentary question, the Minister for Social Protection indicated he was considering how the provisions of the Companies Act 2014, including section 599, might be used to recover moneys expended from the Social Insurance Fund. Is the Minister of State in a position to update the House on that issue and, if not, will he furnish such an update afterwards?

Pat Breen (Clare, Fine Gael)
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The Department of Social Protection, as a creditor, is considering how the provisions of the Companies Act 2014, including section 599 to which the Deputy referred, might be used to recover moneys expended from the Social Insurance Fund.

The Duffy-Cahill report is a comprehensive document which makes a number of proposals that need to be considered together as no single proposal will provide a solution. My priority is to ensure that these events are not repeated in the case of any other company. My second priority is to complete the public consultation and that will be done on Friday next. The stakeholders, including the business employers, trade unions and others, have been consulted. The Company Law Review Group has also made recommendations in respect of company law. The role of the Department is to formulate detailed proposals as quickly as possible to ensure this case is not repeated.