Louise O'Reilly (Dublin Fingal, Sinn Fein)
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15. To ask the Minister for Jobs, Enterprise and Innovation if he will implement legislation or measures to prevent tactical insolvency and ensure that workers are protected in insolvency situations. [15877/20]

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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This question is a fairly simple one. It is to ask the Minister if he will implement the legislative measures to prevent tactical insolvencies and ensure that workers are protected in insolvency situations. The latest of quite a number of cases of this nature concerns the Debenhams workers, but there has been a litany of cases. Every time this comes up, whoever is in government says something needs to be done, someone should do something, this cannot be allowed to happen again and when it happens again they say the same things.

5 o’clock

Workers are getting a bit sick of waiting, they want protection and they want it now.

Leo Varadkar (Dublin West, Fine Gael)
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I thank the Deputy for raising once again the important matter of insolvency and how it impacts on the rights of workers, creditors and others at this time. The procedures for liquidations are set out in the Part 11 of the Companies Act 2014. In general terms, a company is permitted to initiate a winding-up where it has complied with the requirements of the Companies Act 2014. A company both during normal operation and in a winding-up process must of course also abide by all relevant legal requirements, including the treatment of employees and creditors and disclosure to the Revenue Commissioners as well. However, the provisions of the Companies Act 2014 provide safeguards to prevent the abuse of the liquidation system. These include preferential payments under section 621 which provide for categories of employee entitlement such as wages owed, holiday remuneration, superannuation benefits, ill health payments and social welfare contributions. An insolvent company is defined by the Companies Act 2014 in section 818 as a company that is unable to pay its debts and is further defined in the Act.

Therefore insolvency cannot merely be asserted: insolvency is defined in the legislation and scrutinised in the courts. In addition the liquidator of an insolvent company must report to the Office of the Director of Corporate Enforcement, ODCE, on its demise and must apply to the High Court for the restriction of each of the directors of the company, unless they are relieved of that obligation by the ODCE. Ireland has a longstanding preventative restructuring framework in examinership that provides a protective mechanism for companies that have real prospects for the future but find themselves in financial difficulty at a point in time. When it comes to workers the Protection of Employment Act 1977 imposes obligations on employers who are proposing collective redundancies, including official notification to the relevant Minister and a 30-day consultation period to allow employee representatives adequate opportunity to consider the employer's proposals and make constructive proposals in response. While this legislation is currently the responsibility of my colleague the Minister for Employment Affairs and Social Protection, Deputy Humphreys, it will shortly transfer to my Department under a transfer order.

On redundancy entitlements, it is the responsibility of the employer in the first instance to pay statutory redundancy and all other wage-related entitlements to eligible employees.

Additional information not given on the floor of the House.

However, the social insurance fund, under the Department of Employment Affairs and Social Protection provides a safety net for employees in situations where the employer cannot pay due to financial difficulties or insolvency.

The Government has committed in the programme for Government to reviewing whether the current legal provisions surrounding collective redundancies and the liquidation of companies protect the rights of workers effectively. It has committed also to reviewing the Companies Act 2014 with a view to addressing the practice of trading entities splitting their operations between trading and property with the result being the trading business, including the jobs, go into insolvency and the assets are taken out of the original business. Additionally, it commits to examining the legal provision that pertains to any sale to a connected party following the insolvency of a company including who can object and the allowable grounds of an objection.

As part of its next work programme, I will be requesting the Company Law Review Group to examine these programme for Government commitments.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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The workers in Debenhams are on strike, they have balloted for industrial action. They are not on the picket line because they want to be there, they are on the picket line because they are literally in the last-chance saloon. They have got no option. They have nothing, they have lost their jobs. If one talks to these men and women, some have 20, 30 or 34 years of service to the company. Between them, they have given hundreds of years of loyal service to a company that has simply left them, dumped them.

The Tánaiste may recall that my party tabled legislation in 2016. His predecessor as Minister in responding to the legislation, the Protection of Employees (Collective Redundancies) Bill 2017, said:

The Government supports the broad principles of the Bill. It is well intentioned and in line with proposals being developed in my Department in response to the Duffy-Cahill report.

Where are those proposals now? They were being developed in 2016. It is 2020 now and we have another situation. They were developed on foot of what happened to the Clerys workers, we now have another such situation. We are going to have more of these if we do not take some action. We have tabled legislation that is broadly in line with the legislation previously tabled, entitled the Protection of Employees (Collective Redundancies) Bill 2020. I have sought leave to introduce it and I hope that the Minister will work with me in the spirit of his predecessor to ensure that action is taken on behalf of these workers.

Will the Minister agree to meet with a delegation of Debenhams workers? Their trade union, Mandate, has written to him to request that. I have spoken to them directly and they have said that if they could talk to the Minister and explain to him it might underline for him the urgency and the need to act.

Leo Varadkar (Dublin West, Fine Gael)
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I have met some of the Debenhams workers already about this matter although I have not met them through their trade union. I am certainly happy to consider any meeting request. It is important to say that the Debenhams staff who were laid off should get their redundancy and they will. Even if it has to come out of the Social Insurance Fund they should get it. I know that they have not gotten it yet but redundancy payments are suspended at the moment because of Covid. That should not stop them getting their redundancy payments and they should get them as soon as is possible, either from the company or from the Social Insurance Fund if needs be.

The situations with Clerys and Debenhams are not quite the same. Clerys had substantial property assets on O'Connell Street, Debenhams did not. It was renting its premises and had been in and out of examinership for quite some time. Putting the two together is a little bit inaccurate. There are legal changes that need to be made however. Some flow from company law and the company law Bill which we will publish in the next couple of days will deal with some of those. When we have the employment affairs section transferred over I will look again at the Duffy Cahill report and see if we need to make some changes on foot of that.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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The Company Law Review Group issued a report in 2017. It outlines again the need for changes and outlines exactly what needs to be done. There is absolutely no dearth of information about what needs to be done and what would be the right thing to do. Everybody knows this. All that they are waiting on is the political will to act on it and that is why I am imploring the Minister to meet with the Debenhams workers and I welcome the fact that he will consider that. Their trade union has written to him, I think the letter was sent last week. They would be very grateful for a formal meeting with a delegation.

The Minister referred to redundancy. As he rightly pointed out, the workers are entitled to what I, in my previous life, would have called "stat", that is, statutory redundancy. They have a collective agreement. They were a unionised workforce and I am conscious of the fact that I am talking to someone who has worked for probably most of his adult life under collective agreements and national wage agreements. These workers had a collective agreement with their employer and their employer has walked away from it. It did cover issues such as their redundancy entitlement and they are now sitting-in because there is stock in the Debenhams store and once that is gone they believe that will be it, that it is all that is going to be left to them. Statutory redundancy after 34 years of good and loyal service is not really good enough. These people had a collective agreement with their employer which was negotiated. There was give and take, as there always is, on behalf of both parties but the workers should be entitled to the minimum terms that are in that collective agreement.

Leo Varadkar (Dublin West, Fine Gael)
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I am not sure whether that stock belongs to Debehams, to concessionaires or a bit of both but that is neither here nor there.

It is important to say that a company cannot just declare itself insolvent. A company has to initiate a liquidation while insolvent and it cannot do so by voluntary liquidation, it must apply to the High Court. It may be that these matters have yet to be heard in the courts and that is where they will be determined.