Seanad debates

Tuesday, 9 February 2010

3:00 pm

Photo of Maria CorriganMaria Corrigan (Fianna Fail)

I wish to raise the plight of a number of small and medium-sized businesses. I accept all businesses are under pressure but a number are experiencing difficulty being paid. This is not the result of a lack of credit from banks. These businesses are victims of opportunism on the part of other businesses. There are some businesses that have money to pay but are taking advantage of the economic climate and holding out on payment for as long as they can. The result is that a number of businesses are finding it hard to survive and are in danger of closing and their employees — whether five or 15 — will lose their jobs.

Another practice that is taking place is the setting up of shelf companies by companies that seek to undertake work. The work is contracted out to other operators under the shelf company, but when the job is done the shelf company states it has no assets and cannot pay the subcontractor, which has supplied and paid for labour and materials. The parent company that obtained the work reaps the benefit of the materials and labour, but nobody has paid for it. A number of companies have reported this to me and are in danger of closing as a result of such practices. It is immoral, it is thievery and gangsterism but, unfortunately, it is not illegal. I ask the Leader to consult with the Minister and seek changes to the relevant legislation to cater for people who have bills that are larger that those dealt with in the small claims court but not as large as those dealt with in the commercial courts, i.e. with less than €1 million outstanding. In addition, the practice of setting up shelf companies to subcontract work should be outlawed.

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