Dáil Éireann debate -
Tuesday, 3 Feb 1998

Vol. 486 No. 3

Adjournment Debate. - Closure of Cork Textile Company.

Mr. Allen

I am asking the Tánaiste and Minister for Enterprise, Trade and Employment to investigate the circumstances surrounding the sudden closure of Millfield Textiles in Cork with the loss of more than 100 jobs, the accumulated debt to the Revenue Commissioners of approximately £700,000 and the failure of the company to meet its legal obligations to the workers who lost their jobs with the resultant cost to the State in paying those liabilities.

I sympathise with the workers in Millfield Textiles who have lost their jobs in such tragic circumstances. The unusual aspect of this case is that the workers were only given between two and three hours notice that the company, which employed more than 100 people in an area of high unemployment, was closing down. It was subsequently revealed that the company owed approximately £700,000 to the Revenue Commissioners. The money due to the Revenue Commissioners and the Department of Social, Community and Family Affairs was deducted from employees' wages every week but was not handed over to the State. I question this type of white collar crime. If the Leas-Cheann Comhairle or I deducted payments from an employee and did not hand them over to the intended source we would be treated as criminals. The circumstances surrounding this case must be investigated by the Department as they are happening all too often. As the company did not pay its employees' entitlements to the Revenue Commissioners, the State has had to pick up the tab. I am glad the Tánaiste indicated at a recent meeting that the payments to workers would be made as quickly as possible.

These well trained and highly motivated workers have been treated in a shabby manner by the company. Why was the company allowed to accumulate liabilities of more than £700,000? The Minister must appoint an inspector to examine the accounts of this company and related companies. Forbairt made a number of investments in the company, but we have been told that a related company owned most of the plant and the site on which it was located. The Minister must appoint an inspector who will discuss these issues with the liquidator and examine how the taxpayer has been left to pay this hefty liability. The accounts of the company must be examined in detail and the related companies must also be investigated. If a similar case arose in another sector the people involved would be treated differently. There seems to be double standards in this case. I ask the Minister to ensure that the workers receive their legal entitlements as quickly as possible and that the rights of the taxpayers and the State are protected. I wish to share my time with my constituency colleague, Deputy O'Flynn.

Mr. O'Flynn

I thank Deputy Allen for sharing his time with me and support the points made by him. I was shocked to hear about the closure of this company and the short notice given to the workers. At meetings I raised questions about the outstanding moneys owed by the company to the Revenue Commissioners. It is difficult to understand how the Revenue Commissioners allowed the company to accumulate a debt of £700,000 in unpaid taxes and unpaid PAYE receipts which had been taken from employees. No other businessman or businesswoman would be allowed to owe the Revenue Commissioners so much money. I support Deputy Allen's calls for a full investigation after the statement of affairs has been produced by the liquidator.

Other questions arise in regard to grants given to the company in l995 by the previous Minister. This money which was supposed to be used to restart the company has been spent. Questions arise as to how the money was spent, whether it was used properly and whether there was any misappropriation of funds. These may sound like serious charges but there is considerable public disquiet in Cork about this saga. I hope these questions are answered quickly.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

I concur with the Deputies' comments and will have them further analysed by the Department.

At a meeting with a delegation comprising public representatives and SIPTU representatives from Millfield Textiles Limited on Wednesday, 28 January the Tánaiste and Minister for Enterprise, Trade and Employment expressed her regret at the announcement that the company was to close. She also expressed her disappointment at the swiftness of the closure announcement and the manner in which many of the employees became aware of the company's decision. She said she would have further discussions with ICTU about this general issue in the future.

On Friday, 16 January Millfield Textiles announced that, as it had not been able to achieve the necessary viability to stay in business, it was left with no alternative but to close. The company also announced that approximately £750,000 had been invested since it was formed in July 1995 following the acquisition of the assets of the former Sunbeam operation. The company acknowledged the role of the State agency Forbairt with which it had worked closely and which had been very supportive of its development efforts. The promoters had recently undertaken an extensive reassessment of the business, aimed at achieving additional sales over a three year period. Forbairt had indicated its agreement to support the company provided a viable option could be devised for its future operation. However, given the extent of its difficulties, the company was not in a position to avail of the support on offer from Forbairt.

Immediately following the announcement by the company to close the Millfield Textiles operation, the Tánaiste instructed Forbairt to co-ordinate the activities of the relevant State agencies in finding suitable alternative employment for the workers. FÁS is giving priority to the assessment of the skills of the workers with a view to identifying suitable training courses and has targeted clothing companies in the area to find alternative employment. Forbairt has also made similar approaches to a number of industries in the Cork area. This has already resulted in a number of workers being offered jobs in clothing and electronics companies. Millfield Textiles' representatives have expressed their appreciation of the speed with which the State agencies responded to the closure.

On the question of the debt to the Revenue Commissioners, the Deputy will appreciate that any investigation of this nature is a matter for the Revenue Commissioners. A meeting took place today with a view to appointing a liquidator who has certain responsibilities in the context of winding-up a company. This includes following up allegations and possible breaches of statutory legislation. Any information affecting this liquidation should immediately be brought to the attention of the liquidator.

As agreed during the meeting with the representatives of Millfield Textiles, all statutory redundancy entitlements will be paid without delay from the social insurance fund. I have been informed that all the forms for these statutory entitlements have been completed and are being sent to the redundancy payments section of the Department for immediate processing. I expect that all payments will issue direct to the workers within three to four weeks. The appropriate 40 per cent of the total amount paid will be sought from the liquidator by the Department's redundancy recovery section in due course.

I thank both Deputies for their interest, profound sincerity and commitment to representing the difficulties the workers have encountered as a result of this drastic and sudden closure. I express my personal sympathy to the workers and the people of the area where the company is located. I will take the Deputies' grievances to the Tánaiste and the relevant officials in the Department. We will be speedy and compassionate in the decisions at which we arrive.