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

Sections 1 and 2 agreed to.
SECTION 3

I move amendment No. 1:

In page 7, line 29, after “brand” to insert “, social and cultural importance”.

I have chosen to include this amendment because in conjunction with having regard to the expertise, brand and historic success of the eligible company, the social and cultural importance of the company should be taken into account. In doing this, I am thinking about a brand such as Sudocrem. We all recall the furore when Madonna was photographed in her bathroom. It is an odd place to take a photograph, but there you go, and in the background there was a little tub of Sudocrem, a very iconic brand, which we now know is destined to leave these shores. Notwithstanding that, it might be that this is covered by the use of the word "brand" and perhaps the Minister of State, Deputy Troy, will be able to advise me in that regard, but many classic Irish brands are not just a brand; they have a cultural and social significance. I want to hear the Minister of State's views on the matter. It could be that the word "brand" encompasses what I am trying to achieve in any event, but I would welcome confirmation from him if that is the case.

I thank the Deputy. She is correct: the social and cultural importance of a business does have an impact on its future viability. We have seen how members of the public have rallied around local businesses that matter to them during the pandemic and supported them to ensure that they would be in a position to continue to provide services to the local community as the economy reopens. However, I am unable to accept the amendment at this time. It is not because I consider the amendment to be without merit; it is because any amendment to the Bill drafted at this point would mean that we would not have the legislation enacted before the summer recess, given the time constraints. I am committed to working with the Deputy on the amendment later in the year. I hope she will engage with me and my departmental officials on that basis.

I am going to make two contradictory comments. It is a bit unfair not to accept an amendment that strengthens and improves the legislation only because time is tight, so that is not a sufficient reason. However, I will engage with the Minister of State.

He understands the point I am trying to achieve and the purpose of this amendment. At the Joint Committee on Enterprise, Trade and Employment, we have facilitated the waiving of pre-legislative scrutiny and the passage of Government legislation. I absolutely understand how important this legislation is and it is not my intention in any way, shape or form to delay it unnecessarily. However, we are only starting the debate and the Minister of State has said he is not accepting any amendments because it will delay the legislation, which I do not think is very fair given amendments have been put forward.

I am happy to engage with the Minister of State at a later date. I believe the social and cultural importance of a brand has to be recognised. Some things are bigger than just the name. Some things are iconic and are part of history, and part of our social fabric. The icons are important and the brand, of course, is important, but the social and cultural significance of some brands should not be overlooked, and certainly should not be overlooked just because time is tight. I know the Minister of State’s officials are present and that they have worked very hard to get this done. However, it is regrettable that amendments are not going to be accepted purely and simply because time is tight. That said, I am happy to engage with the Minister of State at a later stage to ensure we do our utmost to recognise the social and cultural importance of some brands.

I want to make a general point. I cannot accept what the Minister of State has just said in regard to the amendment, namely, regardless of how justifiable it is or how it will enhance the Bill, he is just not going to accept it because he does not have the time. We have concerns about this legislation contradicting European directives yet his stock answer to all the amendments is that he does not have the time. We were given a deadline for amendments to this legislation as being the day before the Second Stage debate. We often make this charge about things being rushed through but we have never heard a Minister or Minister of State stand in this House and say they are sorry, but they cannot take an amendment regardless of how well-intentioned it is, regardless of the fact their officials agree it might improve the Bill, or regardless of what the Attorney General says, because they just do not have the time. This is quite unprecedented, in my view.

I want to add my voice to that. I raised the issue of the legislation being rushed in the context of the Second Stage debate, and the Minister of State refuted that and said there had been ongoing consultation over the past year with all sorts of stakeholders. We are not stakeholders; we are legislators. That is the point. Consultation is absolutely valid with other groups but this is not consultation; this is about the final stages of the legislation that will be in place. This proves the point that this is rushed. There is inadequate time to take amendments on a Bill that has been in the works, as the Minister of State himself said, with all sorts of stakeholders for the last year yet, when it comes to the final piece of fine tuning of the legislation, there is not enough time.

I thank the Minister of State for bringing forward the Bill so promptly. I know this idea has had a long history and was strongly resisted within the Department over many years. It is a credit to the Minister of State and the Government at large that this was pushed through because we have long seen in Ireland a very expensive and inaccessible system of examinership that has not facilitated viable companies to come through difficult periods. It is absolutely appropriate at this time that we would seek to bring forward this legislation.

It is an emergency measure and while I can appreciate Deputies wanting to scrutinise legislation in the normal course of events, a lot of thinking has gone into this by advocates over the years. The system has been perfected by some of those people working diligently in the background, including the Company Law Review Group, so a lot of effort has gone into trying to find a way to do this despite the resistance that had been there in the past. When it came before our committee, I know many of us would like to have had pre-legislative scrutiny but there was an understanding across all parties, including the Opposition parties, to their absolute credit, that this was something we needed to move upon.

Maybe we will have to tweak it and track its operation as it goes along. As recently as today, as Deputy O'Reilly will be aware, we received a delegation from Retail Excellence Ireland who were concerned about rents and were suggesting the need for a mediation system that could resolve some of the rent difficulties. When pressed, it was hard to see how a compulsory mediation system that obliged or compelled changes in private contracts could be done without the sort of mechanism the Minister of State is bringing forward here. Perhaps the Minister of State should examine the proposals that were presented by Retail Excellence Ireland. It may be they are not feasible in a legislative process but perhaps the code of practice the Minister of State and his Department put in place for overseeing rental contracts for businesses in difficulty can be re-examined to see if it could be made more effective as a backup.

Of course, the fact is that this small companies rescue programme is in place and it represents significant progress. I hope it will ensure many companies that would otherwise be forced to the wall are able to carve out a successful future for themselves. I strongly support the passage of this Bill.

I appreciate what Deputy O'Reilly is saying and I see where she is coming from. If I was on that side of the House, I might be saying the same thing. As Deputy Bruton said, we have done a lot of work in the Company Law Review Group and preparatory work in terms of engaging with experts in this field, and we had a public consultation. I appreciate the co-operation of the committee in facilitating the waiver of the pre-legislative scrutiny.

To be fair, the Opposition saw the benefit of doing that and the benefit was that this legislation could be enacted before the summer recess. The reason we want it enacted before the summer recess is to ensure it is available to small and micro companies with fewer than 50 employees. I have no doubt the Deputy has the same intention as myself and all Members of the House, which is to protect companies. We want to ensure companies that have come through 18 horrendous trading months and that need to restructure in July, August or September of this year, before we come back after the summer recess, can do that. By enabling them to restructure, we are not only saving the businesses, but we are saving the jobs that are dependent on them.

I hope the Deputy will accept my sincerity when I say I will work work with her. If there are other areas that we identify today, we can come back later to enhance the legislation. It would not be the first time we had to bring in amending legislation at a later stage to enhance something that had come through the Dáil. The point I would make is that a lot of this is coming on the back of the examinership legislation, which is internationally recognised as a very good model for companies that need to restructure. The problem with examinership is that the cost can be prohibitive for many small companies. This has been called for over a period of years, long before Covid-19 hit our shores. It is right and proper that we get it done before the summer recess.

I would make the point to Deputy Ó Ríordáin that I will not be rejecting all amendments just because we do not have time. We will be rejecting some amendments and I will outline the rationale when we come to them.

This has merit. It warrants further consideration and I have committed that we will do that.

Nobody wants to delay this unnecessarily but the Minister of State is already talking about amending legislation. This legislation has not even passed and the Minister of State is already talking about amending legislation. We want to work with the Minister of State. I was content to waive pre-legislative scrutiny on the basis that this is urgent. This has happened before. We were under tremendous pressure to pass the termination of pregnancy legislation. I received correspondence from the National Women's Council of Ireland and other lobby groups. We were battered with messages to get it done. We went ahead and pushed it through. It was necessary legislation we were committed to ensuring was brought in but it did not provide for safe access zones and we did not have time to discuss it. Every time I drive past Holles Street hospital and see one of those vile, disgusting protests outside it, I wish that we had got that legislation right instead of bowing to pressure.

I appreciate this is necessary. It does not give me any comfort when the Minister of State says he has a range of reasons for rejecting the amendments, with it being due to a lack of time in some cases while there are other reasons for rejecting others. It makes a mockery of the democratic process. It is not about what side of the House you sit on. We are trying to engage with amendments I and others have tabled in good faith. We are not messing. We are trying to help, to strengthen the legislation and to ensure we benefit from the wisdom that emerges from debate. It is disappointing. I know SMEs and microbusinesses want and need this legislation to pass. That is why we waived pre-legislative scrutiny. The Minister of State cannot dispute that we have been more than accommodating. We were debating a Bill before this where we had waived pre-legislative scrutiny on the basis it was necessary. I will not be found wanting when it comes to being accommodating and doing the right thing. I do not propose amendments for the craic but because I think they have merit.

I welcome that the Minister of State will engage with me about this and I look forward to it. The Minister of State has to recognise that when the first response to an amendment is he cannot accept it because of time, it does not matter what the reasons for rejecting any other amendments are. He has come in and is not accepting any amendments. It is a fait accompli which, I am assured by those who know, is French for a ready-up. That is what it is. There will not be any amendments or changes. Even if a substantial flaw is identified in the legislation despite all the consultation, it simply will not be accepted. There may be some other reasons but ultimately it is about time. That is disrespectful to the democratic process. We do not want to stand in the way unnecessarily. We want this legislation. We know people are waiting for it and that it is necessary but there is precious little point in us rushing through something that will not work. The last thing SMEs and microbusinesses need is for us to pass legislation that will not work for them.

I welcome that we will engage on this and I look forward to doing so. I think there is some merit in it. The Minister of State recognises that. It may be possible to make changes through a code of conduct or such. I am gravely disappointed that the first response to the first amendment is about time.

I accept that the Minister of State's function is to try to pass a Bill he believes will do a lot of good for many companies. I accept that is the reason he is here and why he feels so strongly about the legislation. We have no problem with that. I do not think we in the Opposition have a difficulty with that. He said we need to get this done. That phrase is generally that we need to get it done and that we need to get it done right. We believe this is not compliant with EU Directive 2019/1023. While we need to protect businesses, we also need to protect workers in those businesses. Our primary function, as Deputy Catherine Murphy said, is as legislators. This sometimes surprises people, especially schoolchildren, when they ask what a Deputy's job is. They think it is about being in the media, delivering leaflets or engaging in local activity. The primary function of a Deputy is in this House, passing and, it is hoped, improving legislation.

It is just not good enough to produce important legislation and then to inform Deputies that the deadline for tabling amendments is the day before Second Stage. I appreciate the Minister of State said there will be more comprehensive answers about other amendments. His very first answer is that there is no time. He is right that it is important to get this done, but as Deputy O'Reilly has quite rightly said, it is important to get it done right because rushed legislation is bad legislation in far too many cases and does not protect the people whom we are genuinely trying to help. Nobody is trying to do political theatre or to accuse the Minister of State of not coming from a good place or not having bona fides about enhancing protections in the economic whirlwind that people are going through with the pandemic. At the same time, he has to accept our job is being curtailed by what he is saying as a Minister of State.

I welcome this legislation and I think we all do. It will streamline the processes for small businesses to be able to restructure and to do so in a simplified and effective manner rather than the current cumbersome, expensive examinership process that is in place. Everyone across different parties and the Independents fully supports the thrust of this legislation, but in the haste to enact this legislation, anomalies are being created which will be gone through with a fine comb at some stage in the future and which may have an impact on the viability of some businesses.

I will raise a specific anomaly where an error has been made in the drafting. Sadly, I did not get an opportunity to table my amendment on time because of the bizarre situation where the amendments had to be in before Second Stage took place. The Bill as it is drafted borrows a section from the Criminal Justice (Perjury and Related Offences) Act 2021. The Minister introduced an amendment on Committee Stage of that Bill whereby directors may be found to be personally liable where an offence is committed by a body corporate with the involvement or facilitation of a particular director. At the time when this amendment to the Bill was tabled by the Minister of State, Deputy Browne, he stated:

This is a necessary and common provision in statutes such as this whereby offences can be committed by a body corporate but there stands an additional liability for directors if the offence is proven to be committed with their consent or connivance. It is important, therefore, that I make provision for it in the Bill so that offences of this type are not overlooked.

That refers to white-collar crime. In plain English, it means directors of a company who make a false statement or are aware of false claims being made can be held personally liable for such a statement. We all agree with that. It is reflected in this legislation. However, the difficulty is that the penalty for the offence in this legislation is different from the penalty under the Criminal Justice (Perjury and Related Offences) Act 2021. In this Bill, on conviction and indictment, the penalty is a fine not exceeding €50,000, or imprisonment for a term of up to five years, or both. However, the offence in the Criminal Justice (Perjury and Related Offences) Act on conviction or indictment is a fine not exceeding €100,000, or imprisonment for a term not exceeding ten years, or both. This is a blatant anomaly. Provisions which are now enacted in law in the Criminal Justice (Perjury and Related Offences) Act 2021 have been incorporated into this Act, which I welcome.

The difficulty is that the penalties for the one offence are very starkly different in both pieces of legislation, which are being enacted in this House within a couple of weeks of each other. That needs to be amended before this legislation is enacted.

This is good legislation. It achieves what we set out to achieve and is largely based on an internationally recognised examinership process that the world will look at and say is good. Perhaps it could be improved slightly, but it will achieve our aspirations if we enact it before the summer recess. The purpose of that is to save companies and protect jobs. Our domestic economy contracted by 5.5% in 2020. The companies dependent on this legislation being enacted need it now. We are looking at companies that support 788,000 jobs in this country, that employ fewer than 50 people and that have a turnover of less than €12 million per annum. They need help and support. They have got it through various funding mechanisms and supports over the past 18 months, but as we come out of this pandemic, reopen the economy and supports are tapered off, these companies need the ability to restructure. This Bill is about giving those companies the ability to restructure.

I said quite clearly and honestly in my opening statement, and perhaps I was too honest, that we do not have the time to accept this amendment. However, I accept the bona fides of the Deputy and I have given a commitment to work with her when we return later this year. If we can enhance this legislation, we will do so then. However, let us not forget who we are trying to help. We are trying to help small and micro companies which are currently supporting 780,000 people in jobs. A previous government was able to bring in an internationally recognised examinership process in a week. Surely, after 12 months, and the significant work that has gone in by officials in my Department and the Office of the Attorney General, which Deputy O'Reilly has acknowledged, we can enact this legislation. I am just asking that we enact it before the summer recess. If there are places where we can amend and improve it later in the year, we will do that, but let us not ignore companies that need it now. Companies called for this in 2011 and from 2012 to 2020. I was not in a position to do anything in those years but I am now. I made it a priority and I do not apologise for it.

Amendment put and declared lost.

I move amendment No. 2:

In page 16, line 39, after “proceedings” where it secondly occurs to insert the following:

“, other than proceedings taken by or on behalf of an employee to the Workplace Relations Commission or the Labour Court,”.

The Minister of State will see what we are trying to do in the section on relevant courts powers to stay proceedings or restrain further proceedings is to ensure that those proceedings are not those taken by or on behalf of employees to the Workplace Relations Commission or the Labour Court. While we understand what the Government is trying to achieve with the Bill, with this amendment we are trying to ensure the worker always has recourse regardless of how small the business is.

Again, we table these amendments in a constructive fashion because none of us wants to be in a position where people will say to us in six or 12 months' time that we passed a problematic Bill, that workers within this new system we have just legislated and voted for are not protected and how come we did not know that. The amendment addresses that and I will be interested to hear the Minister of State's response.

Section 558N of the Bill is based on the existing section 520 of the Companies Act, which gives the court full flexibility to put a stay on proceedings if it sees fit. Section 20 provides that no proceedings in relation to a company may commence except by leave of the court and that the court may stay existing proceedings. Employees will not find themselves unfairly prejudiced by this provision or unable to assert their legal rights.

First, where it is proposed to stay proceedings, all interested parties will be put on notice and provided with an opportunity to be heard by the court. The court will not make an order until all those who have indicated they wish to be heard have been heard. The court will only make an order under the section where it considers it to be necessary for the survival of the company as a going concern. It is not typical for precedents in relation to employees' statutory rights to be stayed in examinership.

Second, even if the court did determine that it was appropriate to stay proceedings of this nature, an employee would not find him or herself unfairly prejudiced or unable to assert his or her legal rights as a result. The stay simply pauses proceedings. It does not stop them from being taken and, therefore, we do not propose to accept this amendment.

I noticed the word "typical". The Minister of State's reply indicates this situation is not typical but that does not mean this provision will not necessarily be needed. We want it to be explicit within this legislation that workers will still have the opportunity to take these proceedings as they see fit.

Amendment put and declared lost.

I move amendment No. 3:

In page 18, between lines 27 and 28, to insert the following:

“(3A) The process adviser shall provide proof that the ‘reminder notice’ served on a creditor has been received by the creditor concerned.”.

Given that it is an offence under section 558O(8) for a creditor not to comply with and respond to the process adviser's notice, it would be prudent to ensure the notice has actually reached the creditor in question. This amendment is possibly by way of what might be called belt and braces and baler twine. The best way to address my concerns is by accepting this amendment and ensuring that when a reminder notice is issued, it is certain it has been received. If a notice is sent to a creditor and no reply has been received, it might be because he or she has received it and is ignoring it, in which case that is an offence under 558O(8), but in the instance where it is not received, that person will be in the position of being guilty of an offence under subsection (8). However, that person cannot know that if he or she does not know the notice has been sent.

I am willing to hear the Minister of State out on this, notwithstanding the disagreement we had on time being the only reason for passing this Bill. If there is provision elsewhere in the legislation for this, I would be grateful to hear from him about it. If there is not, again, I would be grateful to hear from the Minister of State about how this is to be dealt with. It is a genuine concern given that you could find yourself guilty of an offence by virtue of the fact you simply did not receive the relevant piece of correspondence.

I had the very same query during drafting of the Bill. I am happy to give the Deputy the clarification I received. It eased my concerns and I hope it will ease hers. Officials from my Department considered this point in detail in consultation with the Attorney General and the advisory council, and examined how best to guarantee that creditors received the various notices required under the Bill.

In doing so, we examined existing provisions in examinership, general notice requirements under the Companies Act 2014, notice requirements under the rules of the Superior Court as they relate to examinership, as well as notice requirements under the Personal Insolvency Act 2012. The Bill, as drafted, is consistent with the notice requirements in all cases. Placing an obligation on the process adviser to provide proof that the creditor received the reminder notice raises the practical issue of how he or she is expected to do this and the consequence effect this may have on the timelines outlined in the Bill.

First, the process adviser would need to send a notice by registered post or to seek further confirmation by way of email that the notice was received. Registered post can be only delivered where the individual is available to receive it. In the event it is not capable of being delivered within the timelines set out in the section, this would impact the delivery of the rescue plan. There are also significant cost implications given that, on its own, the cost of sending a registered letter is €8.20, but very often there can be in excess of 100 creditors and that would amount to a significant cost each time a notice is issued.

Second, unless the notice is sent by registered post it is not within the control of the process adviser to confirm that a creditor has received it. It would not be practical or fair for the process adviser to provide proof that the reminder notice was received by the creditor concerned. He or she is reliant on the creditor concerned providing him or her with this proof. Under the Bill as currently drafted, the process adviser is obliged to retain proof which demonstrates how a notice was issued. Failure to do so will result in the process adviser being guilty of a category 3 offence. There are also further provisions which require the notice of appointment of the process adviser to be placed in a prominent position on the company's website and published in Iris Oifigiúil, thus making information publicly available.

I am satisfied the notification requirements in this Bill are robust and, therefore, I do not intend to accept this amendment.

I do not know how widely Iris Oifigiúil is read but the process as outlined by the Minister of State gives me comfort. The Minister of State can understand where I am coming from on this issue. Again, we will not know how some of the provisions operate until such time as this is up and operational. I thank the Minister of State for his clarification.

Amendment, by leave, withdrawn.

I move amendment No. 4:

In page 25, between lines 27 and 28, to insert the following:

“Further provision with respect to employees

558S. A rescue plan for an eligible company shall not contain provision that provides for either or both of the following:

(a) a reduction in the number of employees after the date from which the rescue plan would come into effect under section 558ZB or 558ZE, as the case may be, unless this has been done by agreement with employees and their recognised trade union, save in the case of voluntary redundancy; and

(b) a failure to honour a collective agreement.”.

This amendment is fairly straightforward. It pertains to the rescue plan for eligible companies under this legislation. The inclusion of this amendment is to ensure that if a rescue plan contains advice on restructuring of employees, this is not done without the agreement of the workers or their recognised trade unions, save in the case of a voluntary redundancy package because clearly a voluntary redundancy package, which is ideal if negotiated with the representative body, can in some instances be offered by an employer. If the Minister of State can confirm the rescue plan cannot include a reduction of the workforce without its agreement, I am happy and satisfied to withdraw this amendment.

We talk a lot about the owners of the businesses who, of course, are important as part of this measure. However, at the business end of these deals will be the workers and they may find themselves in a situation where the workforce numbers are to be depleted or reduced as per the plan. I want to ensure this is not done without recourse to consultation or agreement with workers. In my experience, workers can be imaginative and flexible. Nobody wants to be faced with the prospect of losing their job. I have seen first-hand instances of workers engaging proactively to ensure they are active participants in a rescue plan. It is not intended this would act as a mechanism to deter the rescue or anything like that. As I said, if the Minister of State can confirm the rescue plan cannot include a reduction of the workforce without its agreement, I am happy to withdraw this amendment.

The Bill is consistent with the provisions in the examinership process relating to redundancy and collective agreements. Redundancies which may arise as a result of a company facing trading difficulty must be dealt with within the existing employment rights legislative framework. 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, 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.

Where 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. The 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 redundancy. 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.

I asked the Minister of State to confirm that the rescue plan cannot include a reduction of the workforce without its agreement. His answer is that it can and that is disappointing. The description of how redundancies work is welcome but that is probably known to most of the Deputies who are here. The purpose of my amendment is to ensure the rescue plan cannot result in a reduction in the number of employees or lead to compulsory rather than voluntary redundancies. If the Minister of State had been in a position to confirm that the rescue plan cannot include a reduction in the workforce, which he is clearly not in a position to do, I am unable to withdraw the amendment.

Amendment put and declared lost.

I move amendment No. 5:

In page 27, lines 4 and 5, to delete "49 days" and substitute "31 days".

This amendment is tabled to ensure the process does exactly what I believe is the intention, that is, to deliver a quicker and cheaper alternative to administration. We spoke about this at the Joint Committee on Enterprise, Trade and Employment and the Minister of State, Deputy English, indicated the process may not be quicker than the current administration process. I note the Minister of State, Deputy Troy, said in some instances it would be but in others it would not. That is disappointing. I know from talking to the representatives of business and industry that they will be disappointed with that too. With that in mind, I believe the timeframe for meeting in relation to the proposed rescue plan could be reduced from 49 days to 31 days. I think that is a reasonable amount of time. I am interested to hear the Minister of State's views on this proposal and on whether we can encourage and ensure there is a quicker process. The two main requirements in terms of our discussions on this were that it would be quicker and cheaper because the current process is slow and expensive. Whatever about cheaper, if it will not be quicker, that is regrettable. I would welcome the Minister of State's views.

I accept the amendment has been brought in good faith and in an attempt to improve the process and provide cost savings. However, it is not workable from a practical perspective. I will explain why. On initial appointment the process adviser must notify creditors, the Revenue Commissions and employees of his or her appointment.

The notification must be sent by the fifth day and include a request for information from parties concerned in respect of the debts owed to them and any other information they consider material to the development of a rescue plan in respect of the company. The Bill provides people with 14 days to respond to this request and a further 72 hours where they fail to do so. This means that it could be the 22nd day after a process adviser is appointed that the adviser has all the information he or she requires to start formulating a rescue plan.

Once the plan is prepared, the process adviser must give members and creditors seven days' notice of the meeting to consider the plan and must report back to the company by the 49th day. This means that, in reality, the process adviser has 20 days to prepare the rescue plan. If I were to accept Deputy O'Reilly's amendment, this would be further reduced, to 11 days. It is highly unlikely that even the most skilled insolvency practitioner could prepare a comprehensive rescue plan within that timeframe. In circumstances where the process adviser receives all necessary information and can quickly prepare a plan, however, he or she can report in advance of the 49th day. This is the outer limit. If the adviser has all the information to hand earlier and if the company is smaller, less cumbersome and able to do so earlier, it may be done. The Bill simply mandates that the 49th day after appointment is the latest point at which the rescue plan can be delivered to the company. The timelines in the Bill have been carefully examined by my officials and the Attorney General's office. As drafted, they reflect a fair balance between the company's need for a speedy resolution and the creditors' need to have sufficient time to consider their position and seek legal advice, if necessary.

Amendment, by leave, withdrawn.

I move amendment No. 6:

In page 27, between lines 10 and 11, to insert the following:

“(6A) A meeting under this section—

(a) need not be held at a physical venue but may be held wholly or partly by the use of electronic communications technology as long as all members and creditors have a reasonable opportunity to participate in the meeting,

(b) a process adviser may provide for participation in a meeting by providing or facilitating, for that purpose, the use of electronic communications technology, including a mechanism for casting votes by members and creditors, whether before or during the meeting,

(c) the use of electronic communications technology pursuant to this section may be made subject only to such requirements or restrictions put in place by the process adviser as are necessary to ensure the identification of attendees and the security of the electronic communications technology, to the extent that such requirements or restrictions are proportionate to the achievement of those objectives,

(d) a process adviser shall inform members and creditors, before the meeting, of any requirements or restrictions which he or she has put in place,

(e) where a meeting is held using electronic communications technology for participation in a meeting the process adviser shall ensure, as far as practicable, that such technology—

(i) provides for the security of any electronic communications by members and creditors,

(ii) minimises the risk of data corruption and unauthorised access, and

(iii) provides certainty as to the source of the electronic communications,

(f) in the case of any failure or disruption of such technology, that failure or disruption is remedied as soon as practicable,

(g) such technology enables members and creditors to—

(i) hear what is said by the process adviser and any member or creditor who speaks at the meeting, and

(ii) speak and submit questions and comments during the meeting to the process adviser,

(h) any temporary failure or disruption of electronic communications technology shall not invalidate the meeting or any proceedings relating to the meeting, unless such failure or disruption is attributable to a wilful act.”.

This is a fairly straightforward amendment. I welcome the fact that the Bill seeks to place virtual annual general meetings, AGMs, on a permanent statutory footing. As much as we are all looking forward to non-virtual meetings in the very near future, such virtual meetings have become a very important part of discussions and engagements. Notwithstanding the current situation with regard to Covid, allowing for meetings as part of the consultation process and other engagements to take place virtually, and putting this on a statutory footing, would be very beneficial. I welcome the Minister of State's views in that regard. I am not sure the amendment will necessarily cover the scale and breadth of what is required. There may be knock-on consequences with which it does not deal. I am happy to work and engage with the Minister of State in that regard. For ease and to make sure as many people as possible are engaged in the process, the use of technology would be very welcome. If it is not possible to accept this amendment, perhaps we will have an engagement on the matter at some stage in the future because there is merit in including virtual meetings as part of this.

I am opposed to this amendment because I do not believe it is necessary. The Bill already provides for a discrete amendment to section 690A of the Companies Act 2014, as inserted by the Companies (Miscellaneous Provisions) (Covid-19) Act 2020, to ensure that meetings required by the process can be held virtually. The 2020 Act set out temporary company law measures required to mitigate the impact of the pandemic on the normal operation of company law for an interim period. This period was extended to 31 December 2021.

On the basis of the clarification provided, I will withdraw the amendment.

Amendment, by leave, withdrawn.

I move amendment No. 7:

In page 31, line 2, after “be” to insert “other than the employees,”.

This is a very straightforward amendment which aims to include in the Bill the amended wording:

Where a company is a creditor, any person who is duly authorised under the seal of that company to act generally on behalf of that company at meetings of members and creditors may fill in and sign the instrument of proxy on that company’s behalf and appoint himself or herself to be other than the employees, that company’s proxy.

I await the Minister of State's response.

I hope the Deputy can clarify his amendment because we are not sure we fully understand what he seeks to amend. He has tabled an amendment to the new section 558X proposed in section 3. This section provides for supplemental provisions relating to proxies at a meeting of members and creditors to consider rescue plans and directly mirrors existing provisions of the Companies Act. The proposed section 558X(5) provides that, where a company is a creditor, any person authorised under that company's seal to act on its behalf at such meetings may appoint him or herself to be the company's proxy. The Deputy's amendment would provide that persons so authorised to act accordingly could not include employees of the creditor company. The intent of this amendment is unclear. The Department's officials consider that the Deputy may have made an error with this amendment and that he may have meant to amend provisions dealing with cross-class cram-down to exclude employees. Perhaps the Deputy will clarify his intent.

I was going to say that I will revisit the matter and bring forward an amendment on Report Stage but I will not be in a position to do that. I will revisit it.

Amendment, by leave, withdrawn.

I move amendment No. 8:

In page 31, lines 17 and 18, to delete “60 per cent in number representing a majority in value” and substitute “66 and two-thirds per cent in number representing 66 and two-thirds in value”.

This amendment is very simple. It aims to increase what is considered to be a majority in the Bill from 60% to 66%. This is two thirds and represents the normal practice.

The threshold at which the rescue plan is deemed to be accepted by a class of creditors has been carefully considered in consultation with the Office of the Attorney General. In cases of examinership, section 540 of the Companies Act 2014 provides that a rescue plan "shall be deemed to have been accepted by a meeting of creditors or of a class of creditors when a majority in number representing a majority in value of the claims represented at that meeting have voted, either in person or by proxy, in favour of the resolution for the proposals." While we have largely replicated the provisions used in cases of examinership, it was decided to increase the threshold from a simple majority in value and number to 60% to reflect the fact that the process will take place outside of court. Any further increase to this threshold would make it more difficult for rescue plans to be accepted and would do nothing to further protect creditors. All creditors who vote against a rescue plan ultimately have the right to object to it and to have the court consider their objections further. On that basis, I do not propose to accept the amendment.

Amendment, by leave, withdrawn.

Amendments Nos. 9 to 11, inclusive, are related and may be discussed together by agreement.

I move amendment No. 9:

In page 34, line 27, to delete “21 days” and substitute “15 days”.

May I check the time?

We are about to run out of time.

That is fine. This amendment was included to ensure-----

We have just over six minutes left.

That is great. I thank the Leas-Cheann Comhairle. The amendment seeks to ensure the process does what it is intended to do, which is to be quicker than existing arrangements. When the Minister of State and I spoke in the committee meeting, he indicated that the process may not be quicker. That is a disappointment but we should try our best to do whatever we can to encourage and speed up the process without making it unworkable. I am interested to hear the Minister of State's views on this. As I have said, if it is the case that moving from 21 days to 15 is not appropriate, I would be happy to hear that, but we need to make every effort possible to ensure the legislation does what it is supposed to do, which is to ensure the process is not only cheaper, but also faster.

The process will be quicker if there is no need to go to the courts. We cannot determine its speed if there is a need to go to the courts.

This amendment has been brought in good faith in an attempt to improve upon the process and bring cost savings to companies. The 21-day period provided for creditors and members to object to the rescue plan was carefully considered and drafted in line with advice from the Office of the Attorney General. That was considered the minimum period to ensure that the process was constitutionally robust in terms of procedural fairness. Any reduction in this period would be contrary to the advice received. It is considered that this time is necessary to ensure that all affected parties can consider their position, seek legal advice, if necessary, and then make their objection. It is important to remember that we are attempting to balance the sometimes competing interests of those involved and to be fair to the creditors. The 21-day period gives creditors the opportunity to do due diligence and consult with the relevant professional people before deciding to accept or reject it. It is a fair number of days.

Amendment, by leave, withdrawn.

I move amendment No. 10:

In page 34, line 30, to delete “21 days” and substitute “15 days”.

Amendment, by leave, withdrawn.

I move amendment No. 11:

In page 34, line 34, to delete “21 days” and substitute “15 days”.

Amendment, by leave, withdrawn.

I move amendment No. 12:

In page 54, between lines 7 and 8, to insert the following:

“(4A) Where a process adviser does not make use of the services of the staff and facilities of the eligible company to which the process adviser has been appointed, the process adviser shall give a written reasoning for this decision.”.

Section 558ZY covers the remuneration costs and expenses of the process adviser. Section 558ZY(4) covers the process adviser in so far as is reasonably possible to make use of the services of the staff and facilities of the eligible company to which the process adviser has been appointed.

This is a welcome part of the Bill and these people will assist the process adviser. However, I have a concern that we will have a situation where a company in the new small business administrative rescue process, SCARP, ends up incurring additional costs because it has staff that are appropriate but those staff may not be used by the process adviser. I am not necessarily talking about cases where there are straight-up academic qualifications that one has and another does not. If somebody has those facilities, it will end up costing them more. The process adviser probably comes from a company which has these facilities and these personnel they contract out to other companies. We do not want to end up with additional costs on the company where such costs could potentially be defrayed. Where a company's staff and facilities are not used, a written reason should be given to at least explain why and give them a chance to engage in that regard.

There is merit in the amendment and it is important there are provisions to prevent the process being abused by someone seeking to accrue professional fees. Following the concerns raised by the Joint Committee on Enterprise, Trade and Employment, a number of additional provisions were inserted in the Bill regarding the process adviser's fee. The Bill requires that this fee is notified to the directors of the company in advance of the appointment of the process adviser. This means the directors can make an informed commercial decision as to who to appoint. The fees are notified to the creditors of the company as part of the provision of information concerning the proposed rescue plan. Creditors are entitled to question and object to any part of tat plan, including the process adviser's fees.

Section 588ZZ provides for the ability of any creditor to seek a court review of the process adviser's fees. The court may confirm or adjust the fees, as it sees fit, having regard to the extent to which the process adviser used appropriate resources. We inserted a further provision requiring the process adviser to keep the company's prospect of survival under constant review and places an obligation on the process adviser to resign where he or she no longer considers the business capable of rescue.

I am sorry but I have to interrupt. The time has elapsed. We have done well and got through the 12 amendments but the guillotine is coming down.

The time permitted for this debate having expired, I am required to put the following question in accordance with an order of the Dáil of 6 July: “That in respect of each of the sections undisposed of, the section is hereby agreed to in Committee, the Title is hereby agreed to in Committee, the Bill is accordingly reported to the House without amendment, Report Stage is hereby completed and the Bill is hereby passed.”

Question put and agreed to.