Written answers
Wednesday, 11 October 2006
Department of Enterprise, Trade and Employment
Company Closures
9:00 pm
Pat Rabbitte (Dublin South West, Labour)
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Question 42: To ask the Minister for Enterprise, Trade and Employment the situation in regard to a company (details supplied); the agents or agencies currently investigating this matter; the approximate timetable for these investigations; the date on which his attention was first drawn to this case; the agent or agency that brought it to his attention; if legislation, either primary or secondary, is being drafted to prevent this practice from being used by other companies; and if he will make a statement on the matter. [32043/06]
Michael Ahern (Cork East, Fianna Fail)
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I understand that a report under the provisions of section 56 of the Company Law Enforcement Act 2001 has been provided by the liquidator of the company concerned to the Director of Corporate Enforcement. The issue of what further action arising from the report is a matter for the Director.
With regard to the matter of monies owed to the employees of this company, the Employment Rights Section of my Department have referred this case to the Employment Appeals Tribunal under Section 9(3) of the Protection of Employees (Employers' Insolvency) Act 1984 for a decision on the matter.
The Insolvency Payments Section of my Department has received applications from the liquidator of the company in early May on behalf of approximately 150 employees for payment of arrears of wages and other entitlements from the Social Insurance Fund under the Insolvency Payments Scheme. However the circumstances of the liquidation gave rise to a doubt as to whether the debts due to the employees are payable under the Scheme, or whether a transfer of undertakings within the meaning of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 has taken place, in which case those debts might have been transferred to and be payable by their new employer. The Redundancy Section has claims from 21 employees for redundancy payments, and these are also being held pending the decision of the Tribunal.
The case was referred to the Employment Appeals Tribunal on the 29th June 2006 for a decision and the hearing is scheduled for 14th December 2006.
I understand that the matter first came to the attention of my Department in May 2006. Business failure is an unfortunate fact of life. However, the changes introduced in Irish company law, Part 5 of the 2001 Act in particular, are intended to address problems and issues connected with business failure, including what has been referred to as the "phoenix syndrome". Company law is also under continuing review, particularly through the work of the Company Law Review Group.
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