Seanad debates

Tuesday, 13 July 2021

Companies (Rescue Process for Small and Micro Companies) Bill 2021: Committee and Remaining Stages

 

9:30 am

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

The Bill is consistent with the provisions in examinership relating to redundancy and collective agreements. Any redundancies that may arise as a result of a company facing trading difficulties must be dealt with within the existing employment rights legislative framework. Regardless of the contents of a rescue plan, employees may be made redundant under the Redundancy Payments Act 1967 if the circumstances of the redundancy fall into one of the five definitions set out in that Act, that is, the closure of the employer's business or its cessation in a particular location, the disappearance of the employee's job specifically, a reduction in the numbers of the workforce overall, the replacement of the employee by someone who can also do the work in a manner for which the employee is not sufficiently qualified or trained, and the replacement of the employee by someone who can also do other work for which the employee is not sufficiently qualified or trained.

When there is a collective redundancy under the Protection of Employment Acts 1977 to 2014, the company is obliged to enter into consultations with a view to agreement with employee representatives. This legislation is separate from the Redundancy Payments Acts 1967 to 2014. Those consultations must take place at the earliest opportunity and at least 30 days before the notice of redundancy is given. The aim of the consultation is to consider whether there are alternatives to the redundancies. The company is also obliged to provide the following information in writing to the employee representatives: the reason for the redundancy, the number and description of employees affected, the number and description of employees normally employed, the period in which the redundancies will happen, the criteria for selection of employees for redundancy, and the method of calculation of any redundancy payment. The existing suite of employment protections will be applicable in such circumstances provided by this Bill.

As regards the issue of collective agreements, the industrial relations system in Ireland is based on a voluntary approach and collective agreements are not binding in law. The effect of the amendment would be to elevate the collective agreement to a statutory footing. It may also have the effect of unduly impeding the process adviser in the development of a rescue plan that is focused on saving the company as a going concern and protecting jobs. Furthermore, collective agreements that relate to industrial relations policy are not within the remit of company law. The amendment would have broader implications outside the Bill and, as such, it is not appropriate for me to accept it.

I highlight to Senator Higgins that I am also prioritising further work relating to workers who find themselves in a collective redundancy situation arising from insolvency. We published a plan of action on 9 June and it is available on the website of my Department. It sets out several commitments to safeguard further the rights of workers in these circumstances, including the setting up on a statutory basis of an employment law review group and the provision of accessible guidance documents to help workers and their representatives to navigate the existing legal framework.

There are amendments in the Bill to improve employees' rights, such as by obliging the liquidator to ensure creditors are aware they have a right to form and participate on a committee of inspection. This committee represents the interests of all creditors of a company going into liquidation and its main roles are to oversee the activities of the liquidator and protect the rights of creditors. It is provided that where such a committee is appointed, it shall include at least one employee creditor member and it is clarified that the liquidator has the power to bring and defend proceedings before the Workplace Relations Commission and the Labour Court.

On a final point, the Company Law Review Group, CLRG, has commenced work on streams 2 and 3, which relate to corporate restructuring, revisiting the 2017 report in the light of the ambition of the Government that employees, as creditors, exercise their rights and have the means to exercise those rights. One work stream involves a consideration of employees as corporate stakeholders, particularly in the context of alleged restructuring and splitting of corporate operations from asset-holding entities. A further work stream will address the legal provisions that pertain to any sale to a connected party following insolvency and transactions around insolvency which remove assets from each of the creditors and, in particular, involve the transfer of assets to connected parties. This work reflects complex policy issues and the CLRG has indicated that it expects to report back in September. On receipt of that report, the Department will review the recommendations made and will provide for any necessary legislation as soon as practically possible.

I am committed to improving employees' rights under restructuring, but we will be addressing this issue later in the year and, for that reason, I cannot accept the amendment.

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