Friday, 24 July 2020
Companies (Miscellaneous Provisions) (Covid-19) Bill 2020: Second Stage
I take it everyone can hear me through my mask. It was produced by a local company in Westmeath, Mergon, if anyone wants to acquire one. I will just plug that company.
I am pleased to be in the Seanad as Minister of State with responsibility for trade promotion, digital and company regulation and to have the opportunity to present the Companies (Miscellaneous Provisions) (Covid-19) Bill 2020 for the consideration of the House. The Bill will provide for the first phase of measures intended to mitigate the impact that Covid-19 has had on the normal operation of business in Ireland. Before proceeding with a summary of the detailed provisions, I will first offer some background and context to the Bill.
As Senators may be aware, there are a number of issues in the area of company law that have come to the fore in light of the pandemic. From the onset of the Covid-19 business closures, my Department received a significant number of representations, including representations regarding 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 in relation 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, given 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 any of a range of activities, for example, a merger or members' voluntary winding-up. Indeed, the issue of AGMs has already been subject to litigation. A company recently found itself before the court where a shareholder brought proceedings to challenge the intention to hold an AGM with restricted attendance.
Concerns were also raised with regard to business solvency. In terms of these concerns, Senators will be all too aware of businesses in their own localities, including hairdressers, cafés and so on, which were thriving only a few short months ago but which now find themselves struggling to balance the books and being in fear of closure. Given that there are approximately 240,000 companies and 950 industrial and provident societies registered in Ireland, even if only a fraction encounter such difficulties, it provides clear evidence that a change is warranted to ensure they can continue to comply with their obligations under the legislation and that 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 are required immediately and which are capable of being progressed quickly.
Extensive consultation took place with the CLRG, membership of which is broad and represents key stakeholders in this area such as the Irish Small and Medium Enterprises 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 my own Department. The group is uniquely well positioned to give a balanced view on the need for this legislation. My Department has also consulted with the Irish Co-operative Organisation Society, which is one of the co-operative umbrella organisations.
I will now turn to the main provisions of the Bill, which can be broadly summarised as follows. The Bill provides that the measures will be operative for an interim period up until 31 December 2020, with potential for extension, and provides for a regulation-making power in respect of extending the interim period and amending the operational detail of virtual meetings. The Bill also provides that general meetings for companies and for industrial and provident societies, which are mainly co-operatives, may be held virtually, as may creditors' meetings. Documents which are required to be executed under seal may now be executed in counterpart. The Bill will increase the amount at which a statutory demand can be issued from €10,000 singularly or €20,000 aggregate to €50,000. It will extend the examinership process to a total of 150 days, in exceptional circumstances and subject to court approval.
Part 1 of the Bill deals with preliminary and general provisions. It provides for standard provisions such as the Short Title and commencement. Sections 3 and 4 deal with the interim period. The interim period refers to the limited period of time for 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. This is an important point as it gives us the flexibility to respond to the changing nature of the crisis and its effects on companies.
Section 5 of the Bill makes a small but practical amendment to the Companies Act with regard to 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 a personal identification number 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 that can hold a physical meeting 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 annual general meetings to be deferred until 31 December 2020. This is in line with measures taken at EU level as per Article 2 of the Council Regulation 2020/699 on temporary measures concerning the general meetings of European companies (SE) and of European cooperative societies (SCE) adopted on 25 May 2020.
Sections 12 and 13 amend sections 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 wound up for relatively low levels of debt.
Sections 15 to 24 deal with creditors' meetings under the Companies Act. Parts 9, 10 and 11 of the Act provide for several circumstances in which these meetings must occur. For example, examiners and liquidators are required 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 that which is provided for 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 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 with the substitution of the words "provide for" for "guarantee" at subsection 4(a)(i).
Part 3 of the Act, which consists of three sections, deals with temporary amendments to the industrial and provident societies, the majority of which are co-operatives.The provisions applying to companies were followed closely and adapted where necessary to reflect the unique requirements of industrial and provident societies, mostly co-operatives.
Section 27 provides that the measures will be operative for an interim period, up until 31 December 2020, with potential for extension by Government order. Section 28 makes provision in respect of general meetings. This section is aligned with section 6 of the Bill in relation to general meetings of companies. It provides that a general meeting, including an AGM, may be held in more than one physical location, by electronic means, or as a hybrid meeting, where some members attend physically, and others join electronically, for the duration of the interim period. Members attending by electronic means will be counted as part of the quorum.
Industrial and provident societies may also defer an annual general meeting until 31 December 2020. Industrial and provident societies will be afforded the flexibility to postpone, relocate and change the means of holding general meetings without the need to have a formal technical meeting to adjourn to another date.
The notice of the general meeting that includes participation by electronic communications specifies at a minimum the electronic platform and details for access to it; the time and manner by which a member must confirm his or her intention to attend the meeting; any requirements and restrictions put in place by the society to identify the members; the procedure for communicating questions and comments and the procedure for voting on resolutions. The Minister will have the power to make further provision, if necessary, for the convening and conduct of general meetings held by electronic communications.
Section 29 inserts additional definitions into the Industrial and Provident Societies Act 1893 to include a definition of "Covid-19" and the "interim period". As a result of previous amendments to the Industrial and Provident Societies Acts in 1978 and 2014, the company law proposals on examinership and creditors meetings, will automatically apply to co-operatives.
I look forward to an informed, positive and constructive debate on the Bill in this House. The Bill is important legislation for any companies and co-operatives that might be struggling financially and unable to comply with their administrative obligations under the current legislation. It is an important first phase of work in this area and I am happy to commend it to the House.
I welcome the Minister of State, Deputy Troy, and congratulate him on his new position. It has been a busy period for him and that will continue to be the case. He indicated that these are short-term measures to give reassurance and support to businesses. That is exactly what is provided for in the Bill, namely, certain supports and reassurance so that they can survive in the short term. The Bill sets out how company meetings and meetings of industrial and provident societies can be held in the interim period from the commencement of the Bill until 31 December this year. Companies will be enabled to convene and hold general meetings, AGMs and EGMs by virtual means such as Zoom and Webex.
The Bill also deals with other issues. Workers will not have to get High Court approval for enforcing employment rights complaints. There is also an extension of the time period for the presentation of reports by an examiner to the High Court. In addition, there is an increase in the amount of debt a company can have before a statutory demand can be issued to have it wound up. Once enacted, these proposals will provide reassurance to companies when organising their AGMs and they will be given extra time to hold such meetings. That is important.
It comes on the back of the short-term measures that were announced yesterday. It is important to recognise the role the Minister of State and his Department have played in recent weeks in terms of the July stimulus package that was announced yesterday. It is important to welcome it because many of the measures that are being introduced are along the same lines as the Bill, which is a technical one concerning short-term measures. The measures announced yesterday are also intended to support businesses.That support comprises four things: backing Ireland's businesses with 0% interest rates for first-year SME loans; the restart grant expansion; the waiver of commercial rates; and the Covid-19 credit guarantee scheme, which we were discussing yesterday and which will be hugely vital for businesses. It will also help people, especially young people, to get back to work. There will be an expansion in training, skills development and work placement schemes. We will be building confidence, investing €500 million in local communities, and preparing Ireland for an economy for the future. This stimulus package may be a short-term one but it will be followed by a national economic plan as part of the budget. That is a long-term view. Much of the criticism of yesterday's stimulus package was about it being a short-term measure but it is the second phase of three. It is important to welcome it, and the amount of work put into the package by the Department of Business, Enterprise and Innovation is welcome. Businesses to which I have been speaking in Tipperary and Clonmel say they need clarity and Bills like this one are bringing that clarity. Yesterday's announcement is hugely welcome. I wish the Minister of State well and my party and I will be supporting this Bill.
I welcome the Minister of State to the Chamber and wish him the best of luck in a very important portfolio, in particular given the trying times in which we are living. I will speak to Part 3 of the Bill, which the Minister of State covered very well. Many co-operative societies have contacted me in the last few weeks with concerns about how they are going to manage their day-to-day affairs and their AGMs. The clarification on such matters in Part 3 is very important because many agricultural societies, specifically co-operatives, have hundreds if not thousands of members. This Bill brings clarity on how they can formulate an AGM. That is a very important point in my part of the world, as Carbery, Dairygold and Kerry are all part of this co-operative society in many ways. We now have clarity on how they can do their business from now until the end of the year. There was some worry in the agricultural sphere about how we could have checks and balances in our co-operative societies if we did not have AGMs, which are so important for the day-to-day running of the societies. Part 3 of the Bill, which the Minister of State explained in detail, is very important and it is what we need in order to go forward in these unfortunate times. This is probably going to be a template for the future, not only for the end of this year but for a considerable period of time. It is welcome that this Bill can be amended by ministerial order, because if we need to push this into next year or the year after, we must have that kind of legislation in place. We are living in new and unusual times, to say the least.
The real challenges going forward will be how people can interact with these new forums. Broadband is going to be a massive issue. The communication network in some parts of rural Ireland is not currently capable of hosting all these Zoom meetings, so that will be another challenge. It is very good to have the legislation but we need the technology to tie in to it as well. Those are the challenges we need to work on in the next few months. The clarification offered by the Minister of State in Part 3 of this Bill has in many ways sorted out many of the fears the agricultural co-operative societies had about how they could run their businesses for the next six or eight months.
I am sharing time with Senator Byrne. I sincerely congratulate the Minister of State, Deputy Troy, on his appointment. It is well deserved, given his impact on politics throughout his political life, and he is well capable and able. I wish him the best. I also thank him for his detailed overview of this welcome legislation.There is an onus on all Senators and the entire Government to assist SMEs and companies as we try to recover from this Covid-19 pandemic. Companies have had to adapt and are finding new methods of responding to challenges. There has been a huge increase in people working from home, and while that is welcome and is required in the short term until we get back to full working order, it has its challenges. Increasing the ease with which companies can fulfil their compliance requirements is vital. Flexibility will be provided to companies in a number of ways and it is important that they still meet the compliance standards. Working from home is causing difficulties with documents which have been executed under seal and which had to be signed by company directors and company secretaries. This legislation addresses that difficulty on an interim basis and also allows the company seal and necessary signatures to be on separate documents, which will then be counted as a single document for the purpose of the Companies Act for the duration of the interim period.
Companies are finding current debt challenging and the increase in the threshold from €10,000 for an individual debt and €20,000 for aggregate debts up to €50,000 is welcome, as companies should not be worried about being compulsorily wound up for relatively small sums. The extension in the examinership period from 100 days to 150 days is also welcome. That will help companies and provide greater flexibility for examiners and companies to negotiate with stakeholders and possible investors to put together workable rescue solutions. The Minister of State outlined the additional time provided for companies to hold AGMs and the Bill clearly empowers them to hold such meetings by electronic means, as was noted by other Members. That provides clarity for companies.
I welcome the July stimulus package and the extension of the wage subsidy scheme for all SMEs and business owners, which is paramount because it brings certainty to businesses. The increase in the restart grant from €10,000 to €25,000 is welcome and the improvement of grants for SMEs is vital, as the Minister of State is well aware. Having spoken to people throughout Galway city and county in the last 24 hours, I know the 100% commercial rates waiver until the end of September is very welcome as well.
I join my colleagues in welcoming the Minister of State, Deputy Troy. I have known him for a long time and I am quite certain that he will bring the same dynamism and curious mind to his new role as he brings to politics.
This is welcome legislation but in many ways it is just catching up with the reality of how businesses had to respond to the Covid-19 crisis. As his role involves trade promotion, digital matters and company regulation, I would like the Minister of State and his Department to start preparing for the changes that will happen in the business world. In many ways, this crisis has brought forward the use of new technologies within a very short period. Companies are holding Zoom meetings and are interacting electronically to a far greater extent, and we have to ensure that we are prepared for that. In that context, the Department will have to look at a number of issues. For example, virtual and augmented reality will have to be examined as businesses start using them for meeting purposes. We also need to have a debate around data security. I am conscious that there has been discussion in this Chamber about having a debate on our relationship with China, which is related to this, but we also need to have a debate on data ownership and data regulation. The Minister of State mentioned the position in respect of seals.We need to look at blockchain platforms and how they might provide us with certainty. I ask that the Minister of State champion new technology because otherwise in the future companies and everybody else will be going on far ahead and we will be trying to catch up with legislation. As such it is important that we are prepared for this.
It is interesting that over the last period we have seen grannies and granddads using Zoom to talk to their grandchildren. We have been holding parliamentary party meetings by electronic means and businesses are moving their AGMs online. Even the courts have moved toward a situation where there are online sittings. In our national Parliament, we do not seem to be able to move to a situation where we can use new technology to hold business. I was fascinated watching other parliaments. In the Scottish Parliament, ministers answer questions online. It is similar in the House of Commons and in the European Parliament. I believe the constitutional interpretation that the legal advisors to these Houses have made about what constitutes "a place" is very conservative. We need to look at it. There can be more innovative ways of using technology to hold Ministers to account by making greater use of this, our national place of parliament, rather than having to zip back and forth across the Liffey. Part of our role has to be about appreciating the convergence of the technological change going on around us and part of the Minister of State's role, including as part of this legislation, is to ensure citizens and businesses are ahead of the curve. It should not simply be a case of the Department trying to catch up after the horse has bolted.
I echo the sentiments of welcome and congratulation to the Minister of State, Deputy Troy, and the good wishes that have been expressed for the carrying-out of his ministerial functions.
I welcome this legislation. It is very important that the system of company law and indeed co-operative societies should function properly during this period. Any relaxation of relevant rules or procedures required to make companies function and save them from being stapled to the ground by an overly rigid adherence to what I shall call normal time or peacetime requirements is welcome.
I have a single point to make about the way in which the Bill is constructed. Believe it or not, the CLRG was established on foot of a report prepared by me, and a group I chaired, as far back as 1999. It was intended to bring about a situation whereby the Companies Act 2014, which would eventually be enacted on foot of the CLRG's work, would be a single document in which one could see all of the law in one place in a convenient format. It strikes me that these temporary provisions could have been treated slightly differently by the draftspeople. It could have been phrased such that the temporary provisions we are dealing with here would be stated to have effect during the interim period and would disappear as a matter of law once the interim period comes to an end. It is slightly unfortunate that the text will make permanent changes to the text of the Act even though most of it will be redundant after the interim period expires, even if it is extended for some time. I suggest that between now and when this is brought to the Dáil, something along the lines of the amendment I have suggested should be considered so that permanent changes are not made to the Companies Act 2014. The substance of what the Government is suggesting as temporary provisions should just be stated to have effect during the interim period and thereafter not have to be included in any text whatsoever of the 2014 Act. I have been looking at precedents in English legislative drafting books over the last 48 hours. I am reasonably satisfied that it is possible to put in place a provision which says that an Act shall, during a period of time, have effect as though it were amended in this way and not have to make a permanent change to the text itself. This is just for tidiness, because in reality these amendments will form part of the Companies Act permanently and another Act would have to be passed to take them out of it at some point in the future. I am trying to be totally constructive. Could the Government not, between now and when this Bill is brought to the Dáil, adopt some language in Part 1 of the Bill making it clear that these provisions evaporate completely at the end of the interim period and do not have to be taken out by subsequent legislation? I was assuming that section 26 was a temporary provision and it is not, it is a permanent one. It was an error on my part. My amendments, which I will not be pushing on that account, would actually have knocked section 26 on the head as well. As such, I appreciate that there is a little flaw in what I was proposing but the intention was to keep the Companies Act 2014 and its text easily legible. The Government could produce a statutory consolidation at the end of it all, in order to not have brackets and references to repealed, ineffective or lapsed provisions littered across the Act. I very sincerely urge the Minister of State to consider having some provision in the Act which would have the effect that all of those provisions never had to appear again in print after the interim period has expired. Otherwise it just makes life very complicated for lawyers as they look at sections to discern whether something is still in effect or not. The same goes for accountants.
Having made that point, some of the other points which are temporary should be considered for permanent enactment at some later stage. There is an urgency that makes it difficult to deal with now. There is however a lot to be said for keeping our company law usable and connected with international practice by allowing people to participate in company general meetings on a distanced basis and to provide properly for what is or is not required in those circumstances.
I hope I am being constructive. I congratulate the Minister of State on his appointment. I wish this legislation well but ask the Minister of State to ensure if he can that the 2014 Act remains as legible and as coherent as possible after the interim period is over.
I congratulate the Minister of State on his appointment. I have gotten to know him reasonably well through the Council of Europe and have no doubt he will be a dedicated Minister of State. I wish him well before I disagree with many aspects of Government policy.
The Bill is broadly to be welcomed. It is indicative of the extraordinary times we live in. The purpose of the Bill is to address operational issues in respect of compliance arising under the Companies Act 2014 and the Industrial and Provident Societies Acts 1893 to 2018 as a result of Covid-19. These changes include the ability to hold meetings, such as general meetings, through video technology, for the use of electronic communication in general during the interim period, increasing the debt threshold at which a company can be wound up and increasing the examinership period. The elements of the Bill which deal with instances in which companies and small businesses struggle with debt are extremely welcome. Perhaps the Minister will commit to a report into that €10,000 level of debt figure for a company being wound up and liaising with stakeholders into the future.The severe pressures on the cashflow and threshold at which businesses are deemed unable to pay their debts for the purposes of being wound up by the court are extremely low in normal times and that is why it is imperative that they are increased during these extraordinary times. We welcome that measure.
In that regard, the Bill seeks to support as many businesses as possible to trade through the crisis, thus supporting economic recovery and preserving employment. Increasing the period of examinership by 50 days provides similar support and will allow businesses additional breathing space within which to formulate a restructuring plan. Much more needs to be done for businesses, however. Businesses were waiting weeks for the Government's July stimulus package, but now that it has been announced many are describing it as deeply disappointing.
Businesses are struggling to get back up and running and have been calling for liquidity injections through grants. Instead of a comprehensive and funded grant scheme, however, they are being asked to take on more debt through loans and that is something many simply cannot do. This July stimulus package has a 4:1 debt-to-grant ratio. This flies in the face of what the Government has been advocating in Europe. The Taoiseach spent last weekend preaching about the need for grants in Brussels, but his Government has pushed debt through loans for SMEs at home. Businesses were calling out an economic lifebuoy and the Government has thrown them an anchor.
The changes in the Bill regarding the ability to hold remote meetings, such as general meetings, through video technology and the use of electronic communications in general during the interim period will help to streamline proceedings for businesses. They are also necessary from a health and safety perspective. The speed at which legislation is rushed through to protect the health and safety of company directors and board members is in stark contrast to the failure of the State to legislate to protect ordinary workers on the shop floor, on 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 Minister for Employment Affairs and Social Protection, Deputy Humphreys, refused to do this, however, and the Tánaiste and Minister for Business, Enterprise and Innovation, Deputy Varadkar, is also refusing to make this change.
Incidents of Covid-19 in workplaces such as meat plants, including in the Minister of State's constituency, were rife during the lockdown and many workers were put in danger because of the rapid development of clusters. Was emergency legislation rushed through to protect those workers? No, not a single thing was done for them. When we hear the phrase, "we are all in it together", perhaps we should ask those meat factory workers about it. Instead of pulling on their protective safety gear, perhaps they should have gone into work wearing a suit and tie and with a briefcase. Perhaps then Fine Gael and Fianna Fáil would have thought them worthy of protection.
One of the reasons for this situation is that an outbreak of Covid-19 is not a occupational illness notifiable to the HSA owing to a lacuna in the Safety, Health and Welfare at Work Act 2005. Sinn Féin has published legislation to address this issue. It aims to protect workers in all workplaces, whether in meat plants, in care homes, on building sites or in office blocks in the IFSC. It is our hope that the Minister will amend the relevant regulations and that this legislation will not be needed. However, if he does not take the necessary steps to protect workers, Sinn Féin will move the Bill.
The failure to properly staff the HSA also exposes the hypocrisy of this Government when it comes to how certain workers are treated differently. Only 67 HSA inspectors are available to carry out protocol-related inspections. The Return to Work Safely Protocol was designed to support employers and protect workers as they returned to work and as we moved through the Roadmap for Reopening Society and Business. The protocol was developed following high-level dialogue between the Government, trade unions and employer representatives on the best way to ensure the spread of Covid-19 was prevented and workers were kept safe as the economy opens. The protocol has excellent information and safety recommendations and the HSA was tasked with carrying out Return to Work Safely Protocol inspections. The role of the HSA, the body responsible for enforcing health and safety law, promoting accident prevention and providing information and advice, is essential in ensuring that workers are kept safe and the protocol is adhered to. Frustratingly, however, the HSA has not been given sufficient resources to increase the number of dedicated inspectors it has to carry out protocol-related inspections. Data provided in a reply to a parliamentary question from my colleague, Deputy O'Reilly, has revealed that the HSA has only 67 inspectors to cover 271,000 businesses in the State.The situation is a farce and makes a mockery of the protocol by putting workers and public health at risk.
Tens of thousands of people responded to the Be On Call for Ireland campaign, but only a handful were given jobs. I am sure that within those thousands of applications there are several people with health and safety qualifications who could be employed to carry out inspections. We need to get real about workers' rights in the Covid-19 environment and we need to protect workers in the supermarket or meat factory just as much as company directors down in the IFSC.
I will make one more general point which I will deal with further in my amendments. This Bill is a missed opportunity. We could make one more simple change regarding co-operatives to make it much easier to set them up by reducing the number of people required to do so from seven to three. We know many businesses may not make it back after this crisis, but if we had an option to give workers the opportunity to turn those businesses into workers' co-operatives, we could save jobs and build community wealth. This issue has come up several times and I have liaised with many people across the co-operative movements regarding it. Their number one request is to reduce the number of members required to form a co-operative from seven to three. We could do that very simply now.
As the Minister of State will have seen in my amendments, we could also implement the proposals in the Duffy Cahill report and provide in the legislation protection to ensure there is no repeat of what happened to the Debenhams workers. Given the decision to rush through this emergency legislation, why are the Debenhams workers not being protected in the same way? Why have we not taken the time today to ensure those workers in Cork, Limerick, Dublin, Waterford and Galway are given the same protections? We could do this today through my amendments. This Bill shows a lack of ambition. If we are in an emergency, let us be real about all of us being in this together by ensuring that workers are protected as well. It can be done today with the support of the Minister of State.
I also welcome the Minister of State to the House and I wish him well in his new portfolio on behalf of the Labour group of Senators. Like others, we are supportive of the Bill and we accept the need for urgency. As the Minister of State has pointed out, there is urgency regarding the difficulties being faced by SMEs. Many companies and co-operatives are considering delaying annual general meetings, AGMs, because of concerns about potential technical breaches of the companies legislation arising from the Covid-19 crisis. We accept that.
We also note that the Bill is largely technical and makes operational changes to the companies legislation to allow for regulatory compliance during what is referred to in the Bill as the "interim period". That is something of a euphemism and it sounds a little like "The Emergency" because such serious challenges, threats and dangers are being faced by all of us in society. We accept that and we welcome the provisions regarding, for example, the enabling of general meetings to be held electronically, the extension of examinerships and the increase in the amount a company can owe a creditor before an action to wind up can be taken.
I note Senator McDowell's comments on his amendments. I support the spirit of those amendments, although I know he is not going to press them. There is an important point, however, in the amendments, in keeping with the spirit of the legislation, regarding this Bill being about reducing administrative burdens on companies at a particularly challenging and difficult time. As Senator Gavan said, we know there are immense existential threats to the existence of some companies. We are, therefore, seeking to reduce the administrative burden on companies, yet in this Bill we are putting new provisions into what is already cumbersome and complex companies legislation. There have been some welcome attempts to codify the legislation and I have spoken on those previously. I used to teach company law many years ago, so I know how difficult it is, particularly for small companies, to navigate this complex legislation.
From a drafting point of view and from the perspective of those seeking to implement the legislation, it would have been preferable to have included an automatic lapse provision in the Bill. I say that because from my reading of the Bill, all but two of its 29 sections refer to the "interim period". I read sections 17 and 26 as both having permanent amending effect, albeit of a technical nature, to the companies code.There might have been a preferable way of drafting it. I very much welcome that the Bill is being introduced in the Seanad because it gives time for the Minister of State and his officials to look at whether that would have been possible. It may be too late to do it. I accept the huge time constraints under which officials are working to draft all this legislation in such a short timeframe but it might be possible to examine, even in the context of other legislation, whether there are better and less cumbersome ways of providing for measures in this interim period.
Looking at some of the briefings on the Bill, there was an indication that there would be another permanent provision included, which I do not see in it, which would have codified the directors' duty to creditors as a company approaches insolvency. This is a duty already existing at common law and its placement on a statutory footing was recommended by the Company Law Review Group in its report on the protection of employees and unsecured creditors. Can the Minister of State say whether that provision is to be placed in some other legislation or whether I have simply missed its inclusion in this Bill?
As the Minister of State said, there has been input into the Bill from stakeholders, including the Company Law Review Group, which I welcome. It is very helpful and important for us to know there has been that level of input, even in such a rushed timeframe. I see from briefings we have received that the Bill has been welcomed by stakeholders, solicitors' firms and so on. We are all cognisant that most of the measures in it are temporary, but there is an indication, certainly in some of the commentaries on the Bill, that there might be potential to place some of these measures on a more permanent footing. As we are all looking at ways in which working from home, for example, can be continued on where it benefits employees, some of the provisions around the holding of electronic meetings, similarly, could well be made more permanent to facilitate the smooth running of small businesses in particular and reduce the administrative burden.
While I agree with Senator McDowell that an automatic lapse provision would be useful, I can see there could be potential for extending some of these provisions into the future well beyond any interim period in order to facilitate small companies in complying with regulatory requirements through electronic means. The holding of physical AGMs, for instance, can be very cumbersome for small business. I was on the justice committee some years ago when it heard representations from the Law Society and others concerning a move to electronic means for conveyancing. That process had been hugely cumbersome and difficult because it was all paper-based. When we are seeing moves throughout the legal and political system to a less paper-based model, we should also be looking at moving to that sort of model within the company regulatory network.
Finally, I want to address some of Senator Gavan's comments and to support him wholeheartedly in what he said about facilitating the creation of co-operatives. That is an eminently sensible suggestion and we could work on a cross-party basis to produce legislation to address it. I accept that this is not the Bill in which to do it. It is much a bigger issue and it certainly should be addressed. Senator Gavan also referred rightly to real concerns around worker protection and the health and safety of workers in particular sectors. I support his comments on this point, particularly in regard to the situation at Debenhams. Like many colleagues in this House, I met and spoke to some of the Debenhams workers when they were outside Leinster House. They told us that they are, in effect, facing into a Clerys mark 2 situation unless they get a decent redundancy deal. They have been campaigning for that but, as we have heard, there is no legislation coming before the House in this urgent period to address their predicament. We are very cognisant of that and I appeal to the Minister of State to look at ways in which we can avoid Clerys mark 3 and mark 4 situations. Senator Gavan has put in amendments on this issue but I accept that the Bill is not directly relevant to it. However, it is a really pressing issue for the many individuals who are facing redundancy and job losses. The difficulty with some of the amendments proposed by Senator Gavan, it seems to me, may be that there is a requirement in them that workers would have to prove fraud before they can get a remedy. That may be setting the bar too high and there may be other ways of dealing with it. It is an urgent matter for many people and we should be addressing it.
I reiterate our support for the Bill and the easing of the regulatory burden that it represents.
I begin by expressing my sincere good wishes to the Minister of State, Deputy Troy, who has been a good friend in politics for many years and lives not far from me in the Longford-Westmeath constituency. He has always been a very good worker in the constituency and he did some tremendous work on the Front Bench for Fianna Fáil in recent times.
I agree with Senator Bacik and others that this is, in effect, a technical Bill. We have to remember that we are dealing with the extraordinary situation of a pandemic and, quite rightly in situations like this, we need to get the legislation through. Earlier this morning, very genuine concerns were expressed in the Chamber about rushing legislation through. Doing so is not something that I or my colleagues on this side of the House would be happy with at all. However, there are circumstances we have to deal with in this moment. The reason this legislation is being dealt with very speedily is the number of people who are unemployed and the threats that remain in terms of getting people back to work. While Senator Gavan made a very eloquent speech and I agree with him in regard to the Debenhams workers and other points he made, I genuinely do not think this is about company directors. The Government is worried about people not getting back to work. If that is going to be frustrated because AGMs cannot be held or things have changed in terms of how companies do their business, then the reality is that if there is no company, there is no work. No work means that the economy will slide further into recession.
As I said, I acknowledge some of the points Senator Gavan made. I absolutely agree with him in regard to what happened in the meat factories. There is no doubt that the guard was let down in that case and the right things were not being done. However, we would all agree that things have improved, as is only proper and right. We now have officials from the Department of Agriculture, Food and the Marine and the Department of Health going into the factories and there has been a big improvement in terms of how those factories operate, which is very important. This Bill is generally dealing with the present crisis and that is often the case when certain legislation is rushed through the Houses.
Senator Gavan also made some fine points about co-operatives. However, from talking to business people in my constituency - mainly small business owners - and talking to my own accountant, it is clear to me that the owners of small businesses are very worried about how their five, six, eight or ten employees will be fixed in the months ahead. They are desperately trying to reopen and re-establish themselves and a lot of small business directors really and genuinely worry about having the money at the end of the week to pay their workers. I make that point because it is often misunderstood in the debates we have. Business directors are very conscious of having the money to pay their five, six, eight or ten employees at the end of the week and how important that is in keeping their businesses going.
I acknowledge that the July stimulus package may be disappointing to some, but it is a huge development in terms of trying to rectify some of the appalling situations we are facing as a result of the Covid pandemic. We had a busy debate here yesterday about the moneys that are being made available. I accept that some of the provision will be in the form of loans, but several of the small business owners I have spoken to tell me that if the banks co-operate and they can access those loans, they will be very helpful to them. As we know, if something goes wrong, the banks will take only a 20% hit on these loans, while the State and taxpayers will take an 80% hit. We also have the €5 billion EU Brexit fund coming down the road. I accept that not all of it will go to Ireland, but there is no doubt that the bulk of the fund will come to us because we are the member state most affected by Brexit.
A very important point was made about broadband provision. I agree that if we do not get that right for all parts of the country, urban as well as rural, a lot of this legislation will not work. I am glad to see that the Minister is looking at speeding up the process of broadband provision.We need to get the hubs up and running as quickly as possible. The broadband challenge is one that has to be dealt with very quickly. I welcome the Bill. I understand the frustration of some Members but, again, I remind them that we are in unprecedented times which none of us has seen in our lifetimes. We have to think about the here and now in the hope that the future will be different and brighter.
I congratulate the Minister of State on his appointment. I welcome the amendments proposed in this Bill and wholeheartedly support them. I particularly welcome the provisions that allow for meetings to be held virtually as it will be a particular relief to companies anxious to fulfil their corporate obligations but constrained by their constitutions and company law heretofore barring the validity of virtually held meetings.
When one hears the word "company" an image springs to mind of large multinationals or well known indigenous companies. That is a natural assumption. Over the past number of weeks there has been discussion in this House on small and medium enterprises. The local enterprise offices have provided them with a wealth of support and the programme for Government assures their heightened stature. However, there is a group of companies and directors that can be overlooked. It is on their behalf that I would like to address my remarks.
Many community organisations and entities within our communities are charities and volunteer groups. For the procurement of funding purposes they are obligated to establish companies that are run by volunteers who are nonetheless directors for the purposes of company law. A large number of exceptional outreaches to the community within my own constituency of Dublin South Central are powered by volunteers who are passionate about their community and of necessity their roles have obliged them to become company directors. The obligations of company directorship, particularly at this time, can be onerous. We need to give due consideration to their worries and concerns. My own experience of serving on volunteer boards is that volunteers are conscientious workers who want the best for their organisations and their employees. I am mindful of the number of volunteer directors who are obligated to make serious decisions, existential decisions on the viability of their organisations. In some instances, these are organisations that they have founded, nurtured and loved over many years and they are wrestling with the obligations and concern for their employees and dealing with issues such as redundancy and so on. I am actively supporting a number of organisations within my own constituency in that regard.
I welcome the work of The Wheel which has been instrumental in providing training and networking opportunities, particularly for these two groups, which in law, are companies. I also acknowledge that these groups have been widely funded and supported and partnered by Government. The excellent changes encompassed in this Bill and entirely in the company law obligations entered into by directors need to be supported by an information campaign specifically targeting these type of volunteer directors. They need a means of information on their obligations, alleviating their concerns and their conscientious worries and giving them support in simple, non-legalese language. Going forward, where we to enter into a campaign of information we would be affording that information and support to volunteer directors and, thereby, opening up the opportunity for more people to become involved and volunteer as directors on boards, who would be otherwise put off. We open the opportunity then for a more diverse representation on boards.
We live in a world where the law and the obligations are fast moving. For example, privacy law - wearing my own hat - brings obligations in respect of personal data and well-meaning people involved in a volunteer capacity, including directors, can inadvertently breach privacy law, deeming a sharing or disclosure of personal data to be harmless in the context of the objectives of the business or organisation. The provisions in this Bill for virtual meetings have attendant clauses and criteria that obligate the standard of security and privacy in the electronic communications. In the absence of a large IT budget or the necessary internal expertise, we may need to be providing information supports such as the required ISO standard and so on.We need to put those in place. I ask the Minister of State to consider an information campaign specifically for this cohort of directors. He has my full support for the Bill.
I thank the Minister of State for bringing this Bill before us which I welcome and support. It is important that the Government supports measures to improve businesses and the outcome for employees who have been losing jobs in recent times. I come from the Roscommon-Galway area which is lacking in investment. There are many towns and villages with populations of less than 10,000 and the region is losing jobs due to the current climate globally and in terms of Covid-19.
I pay tribute to the Departments that are putting together policies to support businesses. In regard to the July stimulus, which I know is only one part of a parcel of policies coming forward, I welcome the value placed therein on further and higher education and on encouraging employers to take on apprentices. The stimulus also provides for upskilling and retraining and provides for an additional 34,000 places in further and higher education to allow people who have recently lost their jobs to reskill and, perhaps, to consider Grow Remote or other types of remote working to allow them to achieve an income for their families.
There are other areas I would like to encourage Government to support while acknowledging there are supports provided for in the July stimulus package that will come into effect in October. We need to encourage people to shop local and spend local. I welcome the €125 tax credit in respect of spend of over €600 on food and accommodation. In my own town of Ballinasloe Gullane's Hotel reopened today, which is fantastic. We need more support for our local accommodation such as hotels, bed and breakfasts and so on. We also need to encourage support for Fáilte Ireland and initiatives such as Discover Ireland, the Hidden Heartlands and the Wild Atlantic Way. We need to examine how we can ensure the policies we are bringing forward will support those agencies and those offerings. I ask that the Minister of State would encourage greater focus on areas outside of the major urban areas. I propose to engage with the Departments on how we can support the unique challenges in those areas.
I welcome the Minister of State, Deputy Troy, to the Seanad. I welcome this Bill which will help business to adapt in the current very difficult circumstances. I have listened to some of the commentary in this House. I remind people that there is a big difference between remote working and working from home in the middle of a national crisis. We are currently doing the latter. It is not normal that people are trying to juggle home working, home rearing and home schooling, as I have been doing in my family for the last four months. I know that many of my friends have been doing the same. Many of us have been getting up at 6 a.m. before the children wake and, when they wake, tag teaming to try to get everything done, often working into the evening to make sure that all obligations are fulfilled. It has been exhausting. That is working from home in the middle of a national crisis, not remote working. Despite that, people still see the opportunities of remote work. More than half the number of people who have been doing it want to retain it.
I also remind people that the Department of Business, Enterprise and Innovation website provides advice and guidance on working remotely, covering issues such as safety, health, welfare and obligations under the Organisation of Working Time Act 1997. That is very important. I know there is a national consultation to improve the situation but I would ask that in terms of the Minister of State's portfolio this be seen as an ambitious project not just for now but embedding flexible and remote work.Remote working is one part of flexibility and developing communities around it.
Senator Byrne referred to the remote parliament in the UK. I certainly have enjoyed watching Claire Hanna MP holding the UK Parliament accountable from her home in Belfast. Councillors across the country have been working remotely but only have had access to governance and oversight meetings. They have not had their full powers. Despite all the work they have been doing, they have not been able to set their own or legally binding motions throughout the crisis. That needs to be addressed in the Local Government Act. While it is required for councillors, remote council sessions would make the role of a councillor more accessible to those with jobs, women and parents. It would allow them to juggle more easily their roles as local representatives and parents, for example. That is a huge opportunity going forward.
I recognise the plight of the Debenhams workers. I welcome the fact that the Minister of State, along with the Tánaiste and the Minister of State, Deputy English, met them during the week to assist them. We do not want to see such a situation arising again.
Since phase 1 reopening, an intensive regime for monitoring compliance with the Return to Work Safety Protocol has been in place led by the Health and Safety Authority, HSA, with the assistance from the inspectorate of the Workplace Relations Commission, including 500 HSA inspectors.
I welcome the Bill. I know these are temporary measures but it is time to bring the businesses of Ireland and the business of this House into the 21st century. I look forward to working with the Minister of State on all of this.
Before the Minister of State replies, I congratulate him on his appointment. It is well deserved. I know the long hours he has put in as spokesperson and as a councillor in his own area. Despite being a public representative, it did not stop him from keeping his feet on the ground and minding the post office and the parish at home. That is all part of public representation. I wish him every success in his appointment.
I thank all Senators for their kind words. I hope they will always be as kind to me when I come before the House in the future. I will appreciate it for today.
Senators Ahearn and Lombard referred to the July stimulus package. It is an ambitious project and of real substance. It comes to €5 billion, or €7 billion if one takes into account the credit guarantee scheme. Some people are disappointed that not everything has been achieved. It is, however, the singular biggest injection to support business in the history of the State. There should be no mistake about it. When one listens to some Members talking about protecting companies, it seems companies and businesses are bad. Businesses create jobs and wealth. They ensure taxes are paid and the wealth can be reinvested to ensure the provision of core services. It is important to recognise that. I accept there are some rogue businesses. By and large, however, most businesses are run by good, honest people who are doing good work. They are captains of industry creating opportunities for the citizens of the State. We should stop knocking people who are creating jobs and are wealth creators. We need those people investing in our country.
Senators Lombard, Gavan and Bacik referred to co-operatives.A general scheme for the co-operative societies Bill is being prepared by the Department. It will provide co-operative societies with a distinct legal legislative identity, reflecting their ethos, reduce the number of members required to form a co-operative, revise the provisions of debentures, introduce audit exceptions in line with the approach taken in the Companies Act 2014, as well as strengthening governance provisions and revising the powers of the Registrar of Friendly Societies. I acknowledge it is long overdue. A large body of work was done with the 2014 Companies Act, which took a long time in the Department. Attention has now been focused on this area. I gave a commitment in an oral question a number of weeks ago in the Dáil that, as it falls under my responsibility, I will happily work with all parties to ensure we get proper legislation that will meet all our aspirations. It is my intention that this will be introduced in the Oireachtas before the end of this year or, at the latest, early in the new year.
Senator Byrne referred to the accelerated use of technology. We must acknowledge that Covid-19 has demonstrated how much we can better use technology. This interim period until the end of December will act as a pilot basis to see how well it works. I have no doubt it will work very well and efficiently. It will give us an opportunity to see how it works on a pilot basis and how we can make it more permanent. There is an interdepartmental group on the digital economy and how it will advance over the next several years. Digital is the responsibility of many Departments. I am led to believe that I am going to be the chairman of the interdepartmental group. There are moves under way on a national digital strategy which will provide an opportunity for all Members, wider society and stakeholders to feed into that digital strategy, which is important.
I acknowledge Senator McDowell's vast experience in the legal profession and the work he has done in this area. While I take on board much of what he said, there is an urgency that this Bill is enacted, which he will appreciate. There is one permanent amendment in this legislation providing for the substitution of the Workplace Relations Commission for the Employment Appeals Tribunal. We are working to have the co-operative societies legislation brought forward, streamlined and fit for purpose. A large body of work was done back in 2014. I will ask my officials if there is any way possible to examine Senator McDowell's proposal. I am not sure there is, however, given the time constraints with this legislation.
Senator Gavan and I had a good working relationship on the Council of Europe and we became friends as a result. I understand that in certain instances that he is coming from a different perspective and different outlook on life. That is good. It is important that there is always somebody on that side of the House to challenge and hold people on this side of the House to account. The Government is only good as its Opposition. An Opposition has a strong role to play in democracy and holding people to account.
I disagree fundamentally on Senator Gavan's contention about the July stimulus, however. We need business. Just because one is pro-business does not mean one is anti-employee. One can be supportive of both.Mention was made of people working in meat plants and other places where, because of the nature of the work, they have ended up in clusters. Obviously, the protection of employees is very important. That is why a huge body of work was done, particularly with the Irish Congress of Trade Unions and the HSA, to bring forward protocols to ensure the protection of employees. I heard two different figures, 67 and 400, with regard to people working in the HSA. I will undertake to look at how many are there. I know when I was on the other side of the House I raised the very same point on the need for more inspectors to be on the ground in the few cases where people do not feel they have to comply with the protocols that have been laid out. These protocols have been painstakingly gone through with ICTU, IBEC and various stakeholders and it is important they are adhered to. I will check out exactly how many people there are and will respond to the Senators directly on this.
I am conscious Senator Bacik, as well as Senator McDowell, has high legal qualifications and expertise and I will be guided somewhat by what they have said. Senator Bacik raised an issue, and I am glad she did because it gives me an opportunity to clarify, with regard to the codifying of directors' duties. It is something I would have liked to have seen in the Bill because we need to ensure directors' duties are explicitly stated. It was intended to progress a third recommendation on the codification of directors' duties to creditors as part of the Bill but constitutional concerns about the provision were raised by the advisory council so further examination is required before it is capable of being progressed further. Given the fact it was going to be a permanent amendment it was felt to be more prudent to give it further consideration. Certainly it is something of which I am supportive and I will be looking at how to include it as an amendment in further legislation.
I thank Senator Murphy for his kind words. He mentioned the July stimulus package and I will not go back over that again. Senator Seery Kearney mentioned the good work done by voluntary directors and made a good suggestion on an information campaign so people are aware. Many people serve on voluntary boards, and I have done so myself in the past, and they are not fully aware of their obligations. Perhaps an association or organisation such as The Wheel would be able to run such a campaign. If the Senator has a suggestion I ask her to feel free to come back to me to see whether we can get it implemented.
Senator Dolan made a similar point to Senator Murphy on regional development. It is a key policy of the Government to ensure we have regional development and remote working hubs are important. As Senator Currie said, there is a huge difference between remote working and working from home, which is why it is important that we get our childcare facilities up and running to the full extent and our schools back in operation in September to give people who need to go back to work the opportunity to do so, and to look at putting in place regional hubs in places where there is not huge investment at present that will support job creation in those regions. This is music to my ears and I support it.
I believe I have replied to everybody who has raised an issue and if it is okay with the House we will move on to Committee Stage.