Dáil debates

Thursday, 30 July 2020

Companies (Miscellaneous Provisions) (Covid-19) Bill 2020: Second Stage


9:30 am

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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I move: "That the Bill be now a Second Time."

I am pleased, as Minister of State with responsibility for trade promotion, digital and company regulation, to present the Companies (Miscellaneous Provisions) (Covid-19) Bill 2020 for the consideration of the House following its successful passage through the Seanad. The Bill will provide for the first phase of measures intended to mitigate the impact Covid-19 has had on the normal operation of business in Ireland.

Before proceeding with a summary of the detailed provisions, I would first like to offer some background and context to the Bill. As Deputies may be aware, a number of issues in the area of company law have come to the fore in light of the pandemic. From the onset of Covid-19, business closures my Department received a significant number of representations, including proposed amendments to the Companies Act intended to support companies as they respond to both the operational and economic challenges of the crisis. Similar issues have arisen with regard to industrial and provident societies, which are mostly co-operatives. Real, practical issues were raised in respect of the ability to hold annual general meetings, AGMs, in light of the public health guidelines on social distancing. AGMs are an important forum for members to approve the accounts, appoint auditors and hold the directors accountable for the affairs of the companies and co-operatives. In addition, general meetings need to be held if a company or co-operative is commencing a range of activities, for example, a merger or members' voluntary winding-up. The issue of AGMs has already been the subject of litigation. A company recently found itself before the court where a shareholder brought proceedings to challenge the intention to hold an AGM with restricted access.

Concerns were also raised with regard business solvency. In terms of these concerns, I am sure the Deputies will have had the experience in their constituencies of businesses which were thriving and full of customers only a short time are now struggling to balance the books and keep money in their tills. Given that there are approximately 240,000 companies and 950 industrial and provident societies registered in Ireland, even if only a percentage encounter such difficulties, that provides clear evidence that a change is needed to ensure they can continue to comply with their obligations under the legislation and measures to alleviate the strain on their finances are required.

My Department, in conjunction with the company law review group, CLRG, a statutory advisory body charged with advising the Minister for Business, Enterprise and Innovation on company law, has worked to find practical solutions to these issues as a matter of urgency.

Efforts were focused on matters which could be concluded within a short timeframe and, as such, this Bill deals only with those items which were required immediately and capable of being progressed quickly. Extensive consultation took place with the CLRG, the membership of which is broad and represents key stakeholders in this area such as the Irish SME Association, IBEC, the Irish Congress of Trade Unions, the Office of the Director of Corporate Enforcement, the Revenue Commissioners, insolvency practitioners, legal practitioners, academics and the Department. The group is uniquely well positioned to give a balanced view on the need for this legislation. In addition, my Department has consulted the Irish Co-operative Organisation Society, which is one of the co-operative umbrella organisations.

I will now turn to the provisions of the Bill. The main provisions can be broadly summarised as follows: to provide that the measures will be operative for an interim period up until 31 December 2020, with potential for extension; regulation-making power in respect of extending the interim period and amending the operational detail of virtual meetings; general meetings for companies and for industrial and provident societies, which are mainly co-operatives, may be held virtually; creditors' meetings may be held virtually; documents which are required to be executed under seal may now be executed in counterpart; increase the amount at which a statutory demand can be issued from €10,000 singularly or €20,000 aggregate to €50,000; and extension of the examinership process to a total of 150 days in exceptional circumstances and subject to court approval.

Part 1 deals with preliminary and general provisions. It contains standard provisions, such as those relating to the Short Title and commencement.

Sections 3 and 4 deal with the interim period. The interim period refers to the limited period during which the provisions of the Bill will be operational. This timeframe can be extended by Government order and different provisions may be extended by different times. The latter is important because it gives us the flexibility to respond to the changing nature of the crisis and its effect on companies.

Section 5 makes a small but practical amendment to the Companies Act in the context of the sealing of documents. Under the Companies Act, there are a number of documents which must be executed under seal. This means they must have the company’s official seal affixed to the document and the document must be signed by the company director and secretary. As more and more people are working from home this has created situations where the signatories and seal are in separate locations. Now, documents may be signed and sealed on separate pages which will be counted as one single document for the purpose of the Act. This will reduce the administrative burden on companies.

Sections 6 to 11 make provision for general meetings, including AGMs, to be held wholly by electronic means during the interim period. Such meetings may now be held by electronic means using online platforms such as Zoom or Webex or allowing people to dial in. Companies must guarantee the security of the platform used for the meeting as far as is reasonably possible. Provision is made for the details which must be included in the notice of a general meeting held by electronic means. Such notice must include details of how an attendee can access the platform used for the meeting, as well as any measures put in place by the company for security purposes. For example, some companies may provide attendees with personal identification numbers which they must enter to access the meeting. Further consequential amendments are made to the Companies Act to ensure those who participate in electronic meetings will be counted as part of the quorum.

Companies will be afforded flexibility to reschedule meetings should this be deemed necessary by the directors in order to comply with public health advice from the Government. There may be smaller companies which can hold physical meetings and comply with social distancing guidelines. This provision is designed with them in mind should they schedule such a meeting and subsequently, further restrictions are announced.

New provision is made for the withdrawal or amendment of dividend resolutions. Where a company has previously proposed to pay a dividend to shareholders but the impact of Covid-19 on the company’s finances makes this untenable, directors may withdraw or amend the dividend resolution. This will ensure that directors are empowered to make decisions for the long-term financial stability of the company.

Finally, provision is also made for AGMs to be deferred until 31 December 2020. This is in line with measures taken at EU level as per Article 2 of Council Regulation 2020/699 on temporary measures concerning the general meetings of European Companies and of European Co-operative Societies adopted on 25 May 2020.

Section 12 and 13 amend section 520 and 534 of the Companies Act and provide for an increase of 50 days to examinership, bringing the total period to 150 days. This is an important amendment intended to give companies additional breathing space to restructure, trade through the crisis and preserve employment.

Section 15 amends section 570 of the Companies Act, which sets out the circumstances in which a company is deemed unable to pay its debts. Normally, a company is deemed unable to pay its debts when it has failed to pay debts of €10,000 in respect of a single creditor or €20,000 in the aggregate within 21 days of a statutory demand being delivered. It is at this point the company may be wound up by the Court. Section 15 increases the threshold at which a company is deemed unable to pay its debts to €50,000 for one or more creditors. This amendment is intended to prevent companies which were previously viable from being would up for relatively low levels of debt.

Sections 15 to 24, inclusive, deal with creditors' meetings under the Companies Act. Parts 9, 10 and 11 of the that Act provide for several circumstances in which these meetings must occur.

For example, examiners and liquidators are appointed to call meetings of creditors at various stages in the respective processes. This Bill will allow such meetings to take place by electronic means for the duration of the interim period in line with what is provided in respect of general meetings. There are a number of consequential amendments made to sections which specifically reference creditors' meetings to include a reference to creditors' meetings held by means of electronic communications.

Section 25 makes an amendment to section 1103 of the Companies Act, which provides for additional notice provisions required for general meetings of publicly-traded companies. It includes additional information which must be provided should that meeting be held by electronic communications such as access details for the electronic platform.

Section 26 makes a minor amendment to section 1106 of the Companies Act by replacing the words "provide for" with the word "guarantee" at section 4(a)(i).

9:45 am

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Minister of State is out of time.

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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Before I make my contribution on the legislation, I want to put on the record again my dissatisfaction with the fact that the Tánaiste, Deputy Varadkar, is not here. The Minister of State will know that we were not happy previously when the Tánaiste did not attend. Today, again, he is not in attendance. This is a pattern. On the previous occasion on which I spoke on this, I stated that I sincerely hoped it was not a pattern. One would not need a microscope to figure out that there is a pattern here. It is disrespectful. I do not mean this disrespectfully to the Minister of State, who is here, but I would ask that he convey to his senior ministerial colleague our dissatisfaction that, once again, he has not seen fit to turn up to discuss his own legislation. We were asked to waive pre-legislative scrutiny in respect of this Bill, a request to which we acceded. There is clearly no desire on our part to delay or anything else. However, it has to be recorded once again that we are discussing legislation and the Tánaiste is not here.

Sinn Féin broadly welcomes the Bill, the purpose of which is to address operational issues in respect of compliance that arise under the Companies Act 2014 and the Industrial and Provident Societies Acts 1893 to 2018 as a result of the Covid-19 public health emergency. These changes include providing for the ability to hold meetings, such as AGMs, by means of video technology, for the use of electronic communications in general during the interim period, increasing the debt threshold at which a company can be wound up and extending the examinership period. Those elements of the Bill which deal with instances in which companies and small businesses struggle with debt are to be welcomed. I suggest to the Minister of State that they be examined for permanent insertion into the legislation. This is something I would be interested in pursuing and I sincerely hope I will have an opportunity to discuss it further with the Minister of State.

There is severe pressure on businesses' cash flow and the threshold at which they are deemed unable to pay their debts for the purpose of being wound up by the courts is extremely low in normal times, at €10,000. It is imperative that this threshold be increased during these extraordinary times. Some organisations, such as ISME, have been proposing changes to administrative insolvency whereby matters can be discussed between parties to achieve a resolution without going down the examinership route. As we move through the Covid crisis, organisations such as those representing SMEs and microbusinesses should be brought into the fold by the Department. They have a lot to offer on how we can help businesses get through this difficult period. They do not have all the answers and I certainly do not always agree with their perspective, most especially on the issue of workers' rights. That said, they can bring a unique perspective and they do need to be listened to.

The Bill seeks to support as many businesses as possible with changes to the debt threshold at which a business can be wound up, thus helping them trade through the crisis, supporting their economic recovery and helping to preserve employment. However, as I have said previously, the preservation of employment cannot just be for its own sake. They have to be decent jobs that are worth having and that can help people to pay the bills. They should not be jobs that require long-term support from the State. Increasing the period of examinership by 50 days provides a similar support and will allow businesses additional breathing space within which to formulate restructuring plans.

I would add, however, that much more needs to be done. Many SMEs, microbusinesses and small family concerns looked on at the July stimulus and were disappointed at what was announced, not to mention the hundreds of thousands of workers in the hospitality and accommodation sectors who were gravely disappointed by the Government's offering. Businesses were waiting weeks for the stimulus package and now that it has been announced, many are calling it a lost opportunity. Businesses are struggling to get back up and running. They have been calling out for liquidity injections through grants. Instead of a comprehensive and funded grant scheme, businesses are instead being asked to take on more debt through loans, which they say they cannot do. The July stimulus package involves a 4:1 debt-to-grant ratio. This flies in the face of what the Government has been advocating in Europe. The Taoiseach spent a full weekend preaching about the need for grants in Brussels, but when he comes home he talks only about debt. Businesses were calling out for an economic life buoy and, let us be honest, the Government has thrown them an anchor. The provisions in the Bill around the ability to hold meetings such as AGMs through video technology and for the use of electronic communications in general during the interim period will help to streamline proceedings for those businesses and are also necessary from health and safety perspective. These changes are welcome. They will make business operation much easier but will also offer proactive health and safety precautions for directors and board members.

The speed with which the legislation is being rushed through to protect the health and safety of company directors and board members is, however, in stark contrast to the failure of the State to legislate to protect ordinary workers on the shop floor or the hospital ward or in the meat factory. The Irish Congress of Trade Unions, ICTU, has been to the fore in campaigning for a simple change by way of regulation, not even legislation, to make workplace outbreaks of Covid-19 notifiable to the Health and Safety Authority, HSA. At the stroke of a pen in an office in Government Buildings, workers could have had additional protections for their health and safety. The former Minister for Business, Enterprise and Innovation, Deputy Humphreys, refused to do this and the Tánaiste is now also refusing to make this change. Instances of Covid-19 in workplaces such as meat plants were rife during the lockdown period and many workers were put in danger because of the rapid development of clusters. Was there any emergency legislation rushed through for these workers? Not a single thing was done for their health and safety. Maybe if they wore suits and ties to work and carried briefcases there might have been a little more concern, but these people wear Snickers work wear and overalls. They are ordinary people. They just do not really get onto the Government's radar very often. The simple change that we and ICTU requested is that Covid-19 be designated as a notifiable illness in the meaning of the Safety, Health and Welfare at Work Act 2005, which essentially means that if one contracts Covid-19 in the course of one's work it is classified as an occupational injury. I would have thought that would be fairly plain. If one contracts an injury, disease or virus as a result of one's work, then it is an occupational injury. However, the Government seems reluctant to acknowledge that. It is our hope that the necessary regulations will be amended. That said, we are not pessimists but optimists with experience. We have legislation we will table if that becomes necessary.

I want to refer briefly to the ESRI report which shows that workers such as carers, meat plant employees, taxi drivers, security guards, cleaners and migrant workers are most at risk of severe adverse outcomes from Covid-19. I call on the Government to work with the representative bodies and trade unions to ensure that policies and strategies are put in place to proactively protect the health, safety and welfare of workers in work and not just company directors. The ESRI report also highlights the hypocrisy of the Government when it comes to how different categories of worker from different sectors have been treated. They can see that. They look in here and see what is going on. There are only 67 Health and Safety Authority inspectors available to carry out inspections of the return to work safety protocol. This protocol was designed to support employers and protect workers as they return to work. It was developed following a high-level dialogue involving the ICTU and employer representatives. It has really good information and safety recommendations. The HSA was tasked with carrying out return to work safety protocol inspections but it only has 67 inspectors, as I found out from a ministerial response to a parliamentary question. This situation is farcical. It makes a mockery of the protocol and puts workers and their health at risk. We need to get real about workers' rights during Covid-19. We need to protect the worker in the supermarket or meat factory just as much as the company director in the International Financial Services Centre.

The Bill is welcome. Aspects of it will make significant changes that will be good in the context of protecting public health and businesses during this crisis. However, it is only the tip of the iceberg in the context of what must be done to protect workers and support businesses.

10 o’clock

While I have the opportunity in the context of this Bill, I wish to make reference to the company that runs the Houses, namely, the Houses of the Oireachtas Commission. Last night, the commission met for the first time. There were eight nominees to it between Fianna Fáil, Fine Gael, the Labour Party and the Green Party. I doubt anyone in this establishment, particularly the women, will be surprised or shocked in any way, but I regret to inform the House that the four parties did not nominate a solitary woman. What message does that send out from this institution? The message Sinn Féin sends out is that we have no difficulty nominating women to such positions, given that I was nominated by my party and its leader. On the one hand, the Oireachtas is telling corporate bodies that they need to be mindful of diversity and inclusion and, on the other, it is a case of jobs for the boys and more of the same. We have to lead by example. We cannot stand here and talk about equality only to fail to back that up. There was not one woman from those four parties. They had eight nominees between them, but they could not find even one woman whom they could nominate to the company that runs the Oireachtas. Will the Minister of State go to his parliamentary party and his Government partners and see if they can do better and try harder?

9:55 am

Photo of Aodhán Ó RíordáinAodhán Ó Ríordáin (Dublin Bay North, Labour)
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I intend to be brief, but I concur with my colleague, Deputy O'Reilly, about the Tánaiste's engagement with his portfolio. It appears to those of us in opposition that it is beneath him to address matters pertaining to his Department in the Oireachtas. It is approximately two weeks since he took a swipe at the Labour Party's proposal to introduce legislation in reference to the High Court decision on sectoral employment orders. He dismissed it as virtue signalling. I have been waiting for an opportunity on the floor of the House to take him to task for that remark. We have had two sessions of Private Members' business on the broad theme of employment rights, one tabled by the Social Democrats and another in the form of a motion relating to the Debenhams workers from Solidarity-People Before Profit. We have also had the Credit Guarantee (Amendment) Bill. Despite all of those debates, I am still waiting for an opportunity to engage with the Tánaiste. There are themes that other political parties in the Dáil and I want to return to under the broad umbrella of the economy, employment rights and company legislation, but if the Tánaiste is not present for at least part of those debates, he will not hear those messages or be influenced by them. That is not in any way a reflection on the entire team in his Department, and I respect the Minister of State, Deputy Troy, very much, but it undermines what we are trying to achieve when the Tánaiste does not seem to be minded to address issues raised in the House and pertaining to him.

We have studied this Bill and proposed no amendments to it because we view it as timely and necessary. I note the level of consultation that the Department has had with various stakeholders in order to ensure that the legislation is robust, is necessary and can operate effectively. However, I will make a point about how the economy and business will change in light of remote working, online meetings, etc. There is a growing assumption that the manner in which businesses operated remotely or how meetings took place remotely over the course of the pandemic was 100% positive. Although it was positive to see a reduction in traffic and the amount of time workers spent commuting and it was positive that people could spend more time at home, what happened was not universally positive. In some circumstances-----


Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Gabh mo leithscéal, but will Deputies show a little respect for the speaker?

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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I am sorry.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Deputy Ó Ríordáin, please continue.

Photo of Aodhán Ó RíordáinAodhán Ó Ríordáin (Dublin Bay North, Labour)
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The point I am making relates to remote working and the fact that there is an assumption that it is in all circumstances a positive. If, however, a company decides that a worker can in all circumstances work remotely and connect remotely to the workplace, that is something which will need to be regulated heavily by the Government and via legislation. If there is overcrowded housing, the workers are young or people do not necessarily have access to the appropriate materials or IT equipment. In addition, workers may not be able to connect remotely or may be uncomfortable doing so. We need strong regulation and oversight of this issue because, as the Minister of State knows, the market has no conscience. Therefore, how companies operate their interactions will need to be heavily regulated if the workplace is to be radically different in future.

We appreciate the motivation behind the Bill, but, like Deputy O'Reilly, we hope that other areas of company law, oversight and employment legislation will be dealt with as speedily. We are still awaiting a Government response to the Duffy Cahill report on issues surrounding Clerys, Debenhams and HMV, matters that were referenced recently during Private Member's business. It is this sort of speed that makes the public realise what the Government's priority is. While we have no issue with the speed with which this Bill is being dealt, if every legislative measure governing employment law and workers' rights was dealt with as speedily, there would be a sense across all sectors of society that the Government was even-handed and would respond to the needs of employers and employees equally. Some of us would rather it if the Government spent more time listening to the concerns of employees than employers, but if the speed was seen to be even-handed across the spectrum, there would not be the sense of alienation from the political system and legislation that governs the way people work. There is a sense that if one is a captain of industry or a company director, one's access to the Cabinet, the decision makers and those who prioritise legislation is swifter, whereas if one is a shop steward or trade union representative, one's access is not as swift and one cannot get what is necessary done. The Duffy Cahill report was published in 2017, but here we are in 2020 and the issues it covered are still surfacing.

To summarise, it is important that the Minister of State convey to the Tánaiste our disappointment regarding his failure to attend. A number of issues have arisen in recent weeks but the latter has not been present. If he does not hear the messages from this Chamber, he will not react positively to them. We welcome the Bill and have not tabled amendments to it, but we must be careful about how the sector is regulated in future so that we do not fall into an assumption that all elements of remote working are positive. We must be mindful of unreasonable burdens being placed on workers, in particular young ones, in terms of how they interact with the labour force. My third point relate to the swift way in which this legislation is being dealt with versus long delays in addressing issues concerning amoral actions of businesses in overriding workers' rights.

We will not be tabling any amendments and will be supporting the Bill but I hope the Minister of State will take the comments of the Labour Party on board and relay them to the senior Minister.

10:05 am

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I thank Deputy Ó Ríordáin. We move now to the Social Democrats. I call Deputy Catherine Murphy.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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In the midst of the pandemic we all have to change our behaviour with public health in mind. The relaxation of rules within the Companies Act is necessary and appropriate. The provisions of the Bill appear to be in line with what the Secretary General of the Department, Dr. Orlaigh Quinn, suggested would be needed in her statement to the Special Committee on Covid-19 Response. The term she used then was “practical workarounds” which is an apt description for what is being presented today.

I am quite sure the drafters of the primary Act had no reason to suspect that in a few short years we would find ourselves in a situation where the basic norms, like an organisation’s ability to hold an annual general meeting, AGM, in person would be called into question. Indeed, I understand the situation has already given rise to a legal action in the case of a company that attempted to restrict the attendance of its shareholders to its AGM. With this in mind there is a clear need for the provisions, such as sections 6 to 11, inclusive, which allow general meetings such as AGMs to be held wholly by electronic means during the interim period. It is very important with electronic means that there is no attempt to exclude and this is an issue that has been spoken about already.

Equally, section 5 of the Bill will amend the legislation surrounding the execution of documents under seal by allowing signatories to sign and seal separate pages which will then be considered a single document. The practical benefits from measures like these for the day-to-day administration of certain companies is definitely clear.

However, I would be lying if I did not say that I was concerned by the modesty of what has been brought forward here today. While the provisions of this Bill are fine in and of themselves, I worry that they represent a larger paralysis in the response to the pandemic. It is an unfortunate fact that there are many aspects of our day-to-day lives which we took for granted and are simply no longer viable for the foreseeable future.

A Leas-Cheann Comhairle, I am struggling with some noise here in the Chamber. Can I ask for some quite-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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My apologies, Deputy, it is my fault as I should have stopped it. Can we have a little quiet, please? This is difficult as the noise is not coming my way but is going the direction of the speakers.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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It is the way the sound carries in the Chamber.

This is undoubtedly a challenging thing to accept but as lawmakers our primary focus should not be to slavishly attempt to keep things as close as possible to how they functioned before the pandemic. Instead, we need to look at how things can best be structured in our laws and legal system to respond to our new reality. This would require a root and branch approach as to how the primary Act should function during the pandemic. Looking at the legislation we are discussing today I am not convinced that this has been fully considered.

There are around 240,000 companies registered in Ireland and even if only a small percentage of these find themselves insolvent during this crisis we could find thousands of companies struggling to navigate the terms of the primary Act. This Act, we should remember, is a key foundation document of our company law and amendments to it, or indeed a failure to make necessary changes in a timely manner, have the potential to make a significant impact both positive and negative on the functioning of companies in crisis.

I note that during the debate on the Bill on Second Stage in the Seanad the Minister of State attempted to justify the limited scope on the basis that efforts were focused on matters which could be concluded within a shorter timeframe. As such, this Bill deals only with those items which were required immediately and which are capable of being progressed quickly. This viewpoint is clearly evident in what we have been presented with today but in a time of crisis something so arbitrary as to when it is decided to vote the Dáil into recess is not an excuse to put things on the long finger. I would have hoped that this would have given the Minister of State and his Department a stronger impetus to immediately move to address other issues which fall within his remit. Unfortunately, the opposite appears to be true.

This was highly evident in the Government’s amendment to a motion to support the Debenhams workers last week. Instead of committing to concrete actions this Government reaffirmed that its intention to review the Companies Act 2014 at some point with a view to addressing the practice of trading entities splitting their operations between trading and property, with the result that the trading business, including the jobs, goes into insolvency and the assets are taken out of the original business.

The same kind of thing happened with examinership in respect of CityJet, for example. Our examinership system has preferred the parent company in the Cayman Islands, which will be protected by Irish law. The problem is that the very high-skilled Irish jobs will cease to exist here and will exist in one of the Nordic countries, although I cannot remember exactly which one. Essentially, our company law is protecting a company in the Cayman Islands at the expensive of jobs here. There are very big issues that need to be dealt with.

I am deeply concerned that we may be on the cusp of a significant insolvency crisis and as a result we may see an up-swing in these sort of predatory practices which gave rise to the Duffy Cahill report in the first place. It is not acceptable that a Department at the forefront of an economic response to the pandemic is content to be rearranging the deck chairs while we barrel towards an iceberg. We need more than housekeeping and promises of further reviews.

This opportunity, for example, could have been used to introduce a range of new legislation which has been in the Department for years, or a larger scale amendments to this piece of legislation. Just last week we saw issues with the Office of the Director of Corporate Enforcement laid bare in its action in the High Court, all the while the Companies (Corporate Enforcement Authority) Bill remains in limbo. Alternatively, a much simpler piece of legislation could have been introduced to address the deficiencies in the Companies Act with regard to section 599 which allows, in appropriate circumstances, the court to make an order that any company that is or has been related to the company being wound up shall pay to the liquidator of that company an amount equivalent to the whole or part of all or any of the debts provable in that winding up.

I was reminded of this section when the Minister of State referred to it in quoting the Duffy Cahill report in his speech on the Debenhams workers motion last week. He stated that the report found that the provisions of the Companies Act 2014 that are already available do not appear to be in need of amendment but more in need of use. He did not, however, include the sentences that followed that passage which stated:

It is striking that many of the provisions of the Companies Act which may be of assistance are not frequently invoked (such as section 608) or are not invoked at all (such as section 599). The reason for this appears to relate to the costs and risks associated with such applications, rather than the formulation of the provisions themselves. For this reason, one of our proposals includes conferring power on the Minister, as creditor of an insolvent employer (having paid the employee claims through the Social Insurance Fund), to delegate the taking of statutory applications to a liquidator and to provide funding to the liquidator for that purpose.

I argue that this would have been a fine opportunity to do just that and confer such powers on the Minister.

If a legal remedy cannot effectively be utilised with the frequency with which it is intended, it is not fit for purpose. This is a point from the CLRG with which I disagree. The approach was to examine whether the section has the power to fulfil its purpose solely in a legal sense, whereas this House should instead focus on the effectiveness and impact.

I see my time has expired but there will probably be an opportunity on Committee Stage to make some further contributions.

10:15 am

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Deputy Bríd Smith intends to share her time.

Photo of Bríd SmithBríd Smith (Dublin South Central, People Before Profit Alliance)
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I propose to share time with Deputies Mick Barry and Paul Murphy.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that agreed? Agreed.

Photo of Bríd SmithBríd Smith (Dublin South Central, People Before Profit Alliance)
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I will make some general comments on the Bill, although I have no really strong opinions, one way or the other, on the merits of it. The Government has said it is important and addresses a real gap in legislation to deal with technical issues concerning the impact of Covid-19 on companies legislation. That is all well and good and I congratulate the Government on moving quickly to address this gap and dealing promptly with the difficulties facing companies during the Covid-19 pandemic. I also congratulate the Government on all the efforts made over the past few months with much difficult legislation, some of which was over 100 pages long and very complex. This proves that where there is a political will, there is a legislative way.

I submitted a very short amendment to this Bill that has been ruled out of order. A similar short amendment was submitted by Sinn Féin, borrowed from a Sinn Féin Bill languishing in a legislative graveyard since the end of the previous Dáil. It is not a complex amendment but it would have made a very real difference to many thousands of workers and their families. Workers in this country face a tsunami of redundancy in the coming months and thousands will be hit by insolvency and lay-offs. The amendment sought to give those workers some added protection and place workers ahead of debtors and creditors in an insolvency. However, such an act seems to be irrelevant to this House.

It is five years since the Clerys workers were victims of greed and a mugging by corporate thugs and four years since the publication of the Duffy Cahill report. That report did not explicitly recommend the reordering of preferential creditors but it covered in detail one measure that might give some comfort to workers facing a crisis like this in their lives. It recommended that workers should be put ahead of other creditors in other employment legislation. What have the Houses of the Oireachtas done with this since? Zilch, or absolutely nothing. Nadahas been done for the workers. There is no intention from Fianna Fáil or Fine Gael to put the interests of workers ahead of the interests of companies. Stripped of rhetoric, it is very clear those parties do not really give a damn.

Debenhams workers have been on strike for more than 110 days now, victims of a tactical insolvency. As one of those workers put it, this is a contrived situation. They are collateral damage in a war between a consortium of debtors, including our own Bank of Ireland, and immensely rich stakeholders. Assets, stocks and figures on balance sheets have been moved around like pieces on a chessboard while workers' lives and the lives of their families are being seriously damaged. These workers have given decades of service, helping to make millions of euro of profit for these companies and shareholders.

This is not a political priority for this Government, as it was not for the previous Government. Not in this Bill or any other legislation will workers in positions of contrived insolvency qualify as emergency cases. We fully support these workers and we know they will not go away and will continue their fight. We know that fight will be seen and their actions will make a difference for our workers. If we had an Oireachtas that cared about workers, their families and their lives, the amendment would have been allowed and we could discuss it in detail. It is a simple measure that could have helped to deal with those workers.

Photo of Mick BarryMick Barry (Cork North Central, Solidarity)
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It is the final day of this Dáil session before the summer recess and we are discussing changes to the Companies Act, which is clearly a top priority for the Minister and the Government. I do not have any issue with these changes being put through the House quickly but they stand in stark contrast to the foot-dragging in changes that must be made to legislation to protect worker interests, including interests in positions of company liquidation.

It is long overdue for legislation to be passed through the House to make workers priority creditors, top of the list and first in the pecking order in cases of company liquidation. Such legislation should ban businesses from using tactical insolvency by putting all the losses into one side of a company that has been split, shutting it down and keeping the assets in other ways for the company. The Clerys case indicated that change was required and five years on, Debenhams workers also need those changes. What do we have from the Government? Nothing. Even this Act, which deals with matters arising because of the Covid-19 pandemic, could have included a proposal banning the types of liquidation I describe during cases of lockdown but such a provision is absent.

The programme for Government indicates there will be a review of these matters but the Duffy Cahill report has already been done. Its recommendations could and should have been speedily implemented before this summer recess. When will we see legislation arising from the report put before this Dáil?

The Minister of State met representatives of the Debenhams workers' union last Wednesday and undertook at the meeting to explore the possibility of improving the package currently on the table, which is the bare minimum statutory redundancy. We are eight days on from the meeting and I would appreciate it if the Minister of State could report to the House, for the benefit of those workers, on what progress, if any, he has made on this front over the course of the past week.

There has been much activity in Debenhams shops in the past 24 hours and overnight. For example, personnel from KPMG and others went into the shop in Limerick at 3 a.m. There are many indications that stock will be moved. The Minister of State should be very clear that these workers are determined and their resolve is very strong. Bank holiday weekend or none, no stock will be removed from those shops until there is a just settlement of four weeks of pay per year of service, at a minimum, for those workers.

Photo of Paul MurphyPaul Murphy (Dublin South West, RISE)
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Before addressing the Bill I will briefly address a matter that is down for decision without debate today. It would be very unfortunate if we made a decision on it without any debate. I think it would be wrong to proceed with the proposal in question. It was agreed between the Government and Sinn Féin representatives at the committee dealing with Dáil reform and saw dissent at that meeting from me and Deputies Catherine Murphy and Thomas Pringle.

This proposal would marginalise all groups from the Opposition other Sinn Féin and the Labour Party. It changes the speaking order on Second Stage of a Bill in a very important way. It means that between every Opposition slot after the Labour Party, there is an extra slot for the Government and Sinn Féin. Currently, before Solidarity and People Before Profit Members speak on Second Stage of a Bill, there is a slot for each of the Government, Sinn Féin, the Labour Party and the Social Democrats. With this proposal, before we get to speak, the Government will have had four bites of the cherry in four different speaking slots. Sinn Féin would also get four, which is why, so far, the party has agreed with the proposal.

By the time it gets to the Independent groups, the Government and Sinn Féin will have had seven speaking slots. That is before an organised point of view within this Dáil gets a chance to put forward its position. This is not a question of speaking time, as we have no problem with the Government and Sinn Féin getting as much speaking time as they need, but of the order in which speakers can contribute and of the Opposition not being marginalised. I appeal to the Government and Sinn Féin to withdraw the proposal and not push it today.

With this Bill we have a missed opportunity to do something for the Debenhams workers. Five years, one month and two weeks ago, the Fianna Fáil leader, Deputy Micheál Martin, stated the shutdown of Clerys was unethical and immoral.

He said it spoke to "a lack of any respect for workers".

10:25 am

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The time allotted for this debate ends at 10.30 a.m. so I will ask the Deputy to move the adjournment. He will have possession when we resume this debate.

Debate adjourned.