Implementation of Duffy Cahill Report: Minister of State at the Department of Enterprise, Trade and Employment

We will now discuss the implementation of the Duffy Cahill report. The 2016 report was an expert examination of legal protections for workers with a particular focus on ways of ensuring limited liability and corporate restructuring are not used to avoid a company's obligations to its employees. The examination looks specifically at situations where assets of significant value are separated from the operating entity, being the employer, and how the position of employees can be better protected in such situations.

Recently, we heard from the authors of the report, Ms Nessa Cahill and Mr. Kevin Duffy. To assist the committee in its further consideration of this matter, I am pleased to welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Damien English, on his first visit to our committee. The Minister of State's opening statement has been circulated to members.

Before the Minister of State begins, I will explain parliamentary privilege to members. I wish to explain some limitations to parliamentary privilege and the practice to the Houses as regards reference they may make to other persons in their evidence. They are protected by absolute privilege in respect of their presentation made to the committee. This means they have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege and it is my duty as Chairman to ensure this privilege is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction. I now invite the Minister of State to make his opening remarks.

I thank the Chairman for the invitation to attend today. I will address the committee on my own behalf and that of the Minister of State, Deputy Robert Troy, as we both work in this area in relation to the review of Duffy Cahill report and the other necessary discussion and debate around insolvency and redundancy.

The committee invited me to discuss the implementation of the Duffy Cahill expert report. I understand the committee recently discussed the report with the experts themselves and that was a worthwhile discussion, which I have had a chance to review. The work of the committee is very timely because our Department has been going through a similar process over the past few months and weeks, which we hope to finish by December. We are very happy to engage further with the committee over the next month and to consider its finding and deliberations.

I am also very much aware of the backdrop of these discussions with the situation Debenhams workers find themselves in following the liquidation of that company. I am highly sympathetic to the plight of those workers. However, I must make it clear that the Duffy Cahill report was drafted in a completely different context and to the best of my knowledge, the Debenhams situation is not comparable to the scenario that gave rise to the Duffy Cahill report and its recommendations.

I note that Ms Cahill and Mr. Duffy set out the context and the parameters of the terms of reference for that report, which were quite narrow and specific. The specific scenario the report aims to address is where assets of a significant value are separated from the employer company, also known as the operating company, and where the employer company subsequently enters into liquidation. The purpose of the recommendations is to better protect employees in circumstances whereby corporate restructuring is availed of in an effort to avoid the company having to meet its obligation to its employees. The authors themselves emphasised that the recommendations are not based on the specific facts of any particular liquidation. It is also very important to bear in mind that the report’s recommendations address a very hypothetical and highly unusual situation and do not address the generality of redundancies that arise in insolvency situations.

The report contained six proposals that the authors assert could potentially protect the interests of employees in circumstances where assets of significant value are separated, or where the separation of the assets is being contemplated, from the operating entity, that is, the employer body. These proposals include amending various sections of the Protection of Employment Act 1977 to ensure that employees will have the opportunity to consult with their employer for a period of not less than 30 days before key collective redundancy can take effect, whether the employer is insolvent or not. It proposes provisions to ensure that a related person must notify the employer if he or she is considering any action regarding an asset of significance that may result in collective redundancies, the possibility of injunction applications in certain circumstances, the provision of enhanced redundancy payments, and a mechanism for recovering an asset or proceeds of an asset in circumstances where the transfer of the asset had the effect of perpetrating a fraud on the employees.

This is dealt with in company law but we also have to examine why the various remedies are not being used by creditors, their representatives or the State in some cases.

The authors stress that the proposals made need to be considered in conjunction with each other, as no one proposal alone will provide solutions to the narrow focus in question. The experts also opined that the success of any proposal to deter or address what are sometimes called tactical insolvencies will be heavily dependent on the use that is made of existing statutory provisions, including sanctions. This is something on which we are focusing our work. Part of our work now is to research why existing statutory remedies have not been availed of in certain circumstances and we are examining if there are better ways to enhance workers' rights in these situations.

There was a previous public consultation on this report, but no consensus was reached among the stakeholders in support of the implementation of these recommendations. This was largely due to the very narrow focus in which the recommendations were made. In our work, we are examining the report and other areas to see whether we can strengthen the measures.

As things stand, company law and employment rights governing redundancy situations arising from corporate insolvencies fall under the remit of the Department of Enterprise, Trade and Employment and officials are working together on the various cross-cutting policy issues that have been identified. This is why Ms Coogan and her colleagues who are working on this in the Department are with me. The Duffy Cahill recommendations concerning employment law, and other considerations relating to company law, are being revisited by, respectively, officials in consultation with stakeholders, and by the Company Law Review Group. The Minister of State, Deputy Robert Troy, who has responsibility for company law, and I have initiated a process with union and employer representatives to establish what would make a real difference to employees who find themselves in a redundancy situation due to company insolvency. There are no quick solutions but we are working to find consensus around where any gaps might be and I would welcome any observation the committee has. I am very happy to take on board its work from these sessions.

The issues we are looking at and focusing on, including the Duffy Cahill recommendations, are employees' access to information concerning the company’s financial situation, consultation periods, employees' rights as creditors, asset transfer, the treatment of collective agreements in insolvencies, and the establishment of a stand-alone fund to handle ex gratia payments in insolvency situations

I firmly believe that it is important to ensure we have the most appropriate legislative infrastructure in place to ensure every worker's rights are protected in a redundancy process while recognising there are redundancies that arise in different corporate contexts. Some redundancies are about securing the company's survival while others, unfortunately, happen in the context of the company closing its doors for good. It is my aim and that of the Minister of State, Deputy Troy, and the Minister, to amend legislative provisions where an improvement is required and where it is workable and effective. The key part we are working on is what we can do that is workable and would be effective and would enhance the situation.

It is also important to note that any employee who is in insurable employment, regardless of whether the employer can afford to pay the statutory redundancy entitlement, is protected by the Social Insurance Fund. The persons seated in this room understand this challenge better than others. The State cannot create a system whereby one worker is treated more favourably than another worker in a similar situation. This theme also ran through the Duffy Cahill report. What we bring forward has to work for everybody and has to be fair and implementable.

With regard to the timing of today's session, this is an area we will work on in the coming weeks and months and I am happy to engage with the committee at a later stage, as is the Minister of State, Deputy Troy, when appropriate, to tease out some of the changes we propose to make.

I welcome the Minister of State and thank him for his submission. He referred to the Debenhams workers and I will refer briefly to them and specifically to the letter sent to the Minister of State on 31 August by Patricia King from the Irish Congress of Trade Unions, ICTU. She made reference to a statutory scheme, and having examined the best practice in other EU countries, for example, France, Germany and Austria, there is no disputing it.

The Minister of State referenced in his submission that some redundancies are about securing a company's survival and others happen in the context of a company closing its doors. They are two very different scenarios. In the first case, where the company still exists, the workers have somebody to negotiate with. There is a massive difference between the two cases. In the case of Debenhams the company shut its doors. I note Congress put a proposal to the Minister of State. I do not mean this disrespectfully in any way but I get absolutely no sense of urgency from the Government or the Department on this and I hope he will convince me that I am wrong.

In the letter on 31 August, a proposal was put to him. It makes reference to what was in the Minister of State's submission - that the lockdown denied the Debenhams workers the opportunity to vindicate their rights because of the circumstances. Senator Gavan and I, and others, have experience of prosecuting a dispute. I have never had to do it in a pandemic and I cannot imagine how it would be done. Everything has to stop. What work has been done on the proposal put by the most senior ranking trade union official in the State? What thought was given to it? What work has been done on looking into it? If it is a case that it will not work, that can be explained to us. If it is being examined, the Minister of State might bring us up to date on where it is at.

There have been a few letters going to and fro on the details of the potential of doing it. It was also raised at one of the Labour Employer Economic Forum meetings. As soon as we had the transfer of functions to cover employment law and company law, the Minister of State, Deputy Troy, and I brought together a number of stakeholders to discuss a range of ideas, similar to what the committee is doing. It is a worthwhile exercise. We examined some of the recommendations in the Duffy Cahill report and suggestions others put forward, including one on a fund that could be put in place.

Reference was made to a fund in other countries and it is something we have are researching. I have asked for all those suggesting a similar approach to forward to me any evidence they have on how successful it has been and where it has worked. The Department is also engaging. We are looking at a number of issues. The question that has to be teased out goes back to what the Duffy Cahill report states on whether there are two types of people who end up redundant with two sets of entitlements.

The fund would set aside money or would draw on the Social Insurance Fund to pay out for collective agreements, which are above the statutory rights on redundancy. If we are to go down that road, and we are very open to looking at all of this, the question will be who pays into the fund or how we charge for it. Will it be through increased PRSI or a draw on the Social Insurance Fund? Will we consider a voluntary fund whereby those companies and employees who have agreed to additional terms of employment would be in a position to separate moneys to fund it in the future? These are the questions we are teasing out with the stakeholders and we are asking for views on this.

We will come to a conclusion on this when we finish our work, hopefully during December. I am happy to re-engage with the committee on this. I would also welcome the views of the committee on who would pay into the fund and who would draw from it. I understand the proposal is very much that those with a collective agreement, whereby in the event of redundancy they would have extra payouts above the statutory entitlement, would draw on the fund. As part of this discussion we have said that if we go down that road there will need to be greater transparency on collective agreements. We do not have any indication on how many are out there.

I apologise to cut across the Minister of State but my time is tight. How much work has been done to ascertain this? Does he have view on who should pay?

I do not have a view.

Has he done any work on establishing how many collective agreements exist?

I do not have an expressed view, apart from stating that if a fund such as this is deemed appropriate, the question would be who pays into it. This is why we have had a discussion. Any decision in this area involves all of the stakeholders, including employers, employees and representatives bodies. We cannot decide out of the blue to have a fund. We have to work out who would pay into it. On the face of it, it seems to be a worthy suggestion but the question is how we operate it. We have a similar fund, which is the Social Insurance Fund. It pays out on behalf of the State on statutory entitlements. With regard to redundancy, back in 2002 the social partners agreed that redundancy would be two weeks' wages.

That was a long time ago.

It certainly was and if the Deputy suggests we take a broader policy view on it, that would be a separate discussion from what is recommended in the Duffy Cahill report but it is certainly something that can be looked at in the long term. It is not something that could be decided in the month of August or September.

The Deputy referenced Debenhams and the letters. We are undertaking this work in the Department and reviewing this area of redundancy and insolvency because it is in the programme for Government and because Mandate had two asks for me at a meeting in late July as part of the campaign on behalf of the Debenhams workers, which has brought this back into focus and rightly so.

One of the requests was its pursuit of what the workers wanted in terms of entitlements, payouts and so on. Second, part of its campaign was for the legislation to be changed to strengthen its position. I committed to that on behalf of the Tánaiste at that meeting. We are doing this work to see if we can strengthen that.

Does the Minister of State envisage this having retrospective application to encompass the circumstances Debenhams workers are in now?

We have legal advice on that which states that in this case it would not be retrospective. I do not see how we could make it so, but all that will certainly be considered. We took legal advice but we have not found a way that it could be made retrospective.

I suggest to the Minister of State that, given that the matter is still in dispute, the level of retrospection might not actually be required because of the live dispute. Is the Minister of State able to share this legal advice or some version of it with us?

It is the legal advice our Department has. I can share it with the Deputy. I am doing so now. The legal advice is that it would not be retrospective. We may all have a different view on that. I am again-----

With respect, could the Minister of State just share the advice? I am not a lawyer - I do not know if he is - but if a lawyer has given advice, it would be helpful if it were shared.

I will check-----

I am not trying to be argumentative-----

-----but it would be very helpful to us if he could share the advice with us.

In all these areas legal advice can be sought by anyone. We looked at this in probably August or September. Naturally, the Taoiseach, the Tánaiste, the Minister of State, Deputy Troy, and I have said at every occasion that anywhere we could help in the Debenhams case we would, within the law. That is what we have checked. Again, however, we have to be very clear here as to what this fund would be and who would pay into it. The committee might have a view as to how the fund could be assembled and who would pay into it, and I would be very happy to take that on board. Just yesterday we sent out again to the group with which we have an engagement a list of questions we want teased out. One of the questions is whether the fund is appropriate and whether people agree to it. Again, we are looking for suggestions as to how one would pay into it. It would assemble quite a lot of money in an ongoing context of employment and companies.

In the Minister of State's submission he refers to the section on the employees' rights as creditors. I will come in for a second round if I can, but has any consideration been given to banking the redundancy entitlement as they go in order that it would be there and the employee could be considered a preferential creditor in the event of a redundancy or liquidation such that money would be available, as in, that the employer would bank it-----

Is the Deputy referring to entitlement?

Yes, where there is a collective agreement.

Is that in respect of the fund?

Again, that is what we are trying to tease out. If one decides to have a fund in future-----

I mean at the level of the employment. What if that entitlement were banked year on year? In the case of the Debenhams workers it is two plus two. Two is statutory and the other two will be part of their work. Has any consideration been given to banking that entitlement? Has the Minister of State discussed this with employers and the workers' representatives?

We have asked for people's views as to how the fund could be managed and whether it would be a voluntary fund. If it is not to be a voluntary fund, and if one were to go down the road of making the fund effectively a State fund, one would be going into increasing PRSI and taxes and having more resources there. I think in the Duffy Cahill report there is discussion of having a fund, but it would be very serious to decide to increase that fund. Statutory redundancy is paid out by the State if a company is unable to do that. That is guaranteed, and the fund does that.

The Deputy is asking for an entitlement for the workers in addition to that. The State has decided that two weeks is what is appropriate. There is a fair draw on the Social Insurance Fund. I am not even sure the unions are suggesting we draw on the Social Insurance Fund for that. If one wants another fund, how will it be managed? At some of those meetings the question was asked as to whether there would be a voluntary fund that is ring-fenced to a certain sector, a certain group of companies. That is a voluntary arrangement, however, as are those collective agreements. They are voluntary arrangements, private arrangements, between employees and companies.

Has the Minister of State a view on that?

No, I do not because I am leading a consultation on the matter so it would be wrong of me to have a view of the staff or consultation on which I want to engage everybody else. Of course, the Department and I will make our view known at the end of this process. I said at the very start that I am happy to come back to the committee to engage when we are finished our work on this, but we are not yet finished. It would be wrong of me to ask people for their views while telling them I have an opinion that is formed already. That would not serve much purpose.

It would be interesting to know the Minister of State's view, but that is fine.

As I understand it, the Duffy Cahill report has raised a couple of issues. The primary issue concerns the consultation period, the secondary issue concerns this hiding of assets and a third issue is collective deals for the future. As for the first, the issue of making it obligatory to have consultation in an insolvency, is there consensus on this being a correct way forward? It seems reasonable to me that there should be consultation in an insolvency. I know there are some things to be tidied up, such as the issue of not trading while insolvent and so on, but I think it can be done.

The secondary issue concerns the hiding of assets. Mr. Duffy and Ms Cahill are obviously not going to give evidence on a particular case, but is there any consensus as to whether Debenhams concealed assets? I know there has been a lot of argumentation, but have lawyers on different sides established whether assets have been fraudulently put away in order to prevent workers getting their entitlement?

The third question concerns recommendation 6. Have I misunderstood it? My understanding is that what the recommendation says is that a collective deal which could involve more than statutory redundancy could become a burden on an insolvency fund but only if the employer had failed to undertake his or her obligations to consult. The difficulty I have is that I can see how this can be argued, but does applying it in the Debenhams case, where there was no law obliging the company to consult at the time, not create a real problem? Even if we introduce this, one cannot retrospectively create an obligation on the company to have consulted. At the time it was the law that it did not have to consult, so that trigger requires a change in two areas of law which raise a retrospective issue here because one cannot change the law in respect of an obligation on a company, even if the State were to undertake certain responsibilities in that situation.

My last question concerns the proposal being considered by the Department to create some sort of fund in respect of which we do not know how contributions to it will be made. Is it to cover collective agreements in every case or solely in cases of companies that have failed in respect of some specific legal obligation?

I will try to answer the Deputy's questions as best I can. If I miss a point, he might remind me. What was the Deputy's first question again?

Is there consensus on changing the rules on consultation in an insolvency?

It would be wrong to say there is consensus because we are still working through this. There is a general sense, certainly in our Department, that we may be able to strengthen the position in this area. There are two consequences to that. The Deputy is right that one of the consequences involves the director's responsibilities in continuing to trade in such a situation for those 30 days when it is effectively insolvent. This needs to be teased out and could result in other serious complications. My understanding is that this was considered before with the Company Law Review Group, which did not recommend changes here. We are trying to tease that out. I think the word used by Mr. Duffy was "dignity". The very least one would achieve during that process would be a reasonable conversation with employees to respect their dignity and have a chance to tease through all the situations involving a company. It is a very difficult time when there is an insolvency because the company is effectively going broke.

It is different if there are assets involved or decisions have been taken at earlier stages which affect that. In most cases, an insolvency is a very difficult time for employees. We can see that in respect of Debenhams, which was mentioned. It has been a very difficult time. We are trying to see if we can allow for that 30 days of consultation. The other part of that is what it can achieve and if it would be effective. We would then have to try to define what the consultation is and what it covers. There is consensus that if we could do that, it would be the right thing to do in that situation. There would seem to be consultation in most cases but in other cases, insolvencies take place overnight because the creditor might make a move. It is not always straightforward but we are looking to try to do that.

The other issue is what happens to employees during that time. The committee discussed at its previous session access to social welfare entitlements and who pays employees during the 30-day consultation. If employees still employed but there is no money to pay their wages, technically they would not be entitled to social welfare payments. We are examining how we could address that issue. My reading of it is that it is fixable. None of those with whom I have engaged has spoken against trying to address this issue.

On the hiding of assets, the Duffy Cahill report, while not referencing any one case, dealt with hypothetical cases where assets had been stripped, hidden or sold off. That does not mean that the pattern is similar in every situation but that is the one the Duffy Cahill review was asked to examine. The view in the report, and of our team and the company law review that current legislation allows for those assets to be chased down. It is clear, however, that it has not been used. Part of the question we are asking all the stakeholders is why it has not been used. Is it too expensive or too difficult or is it too hard to try to prove a case? That is the issue we are teasing out to see how we can improve that situation. It is desirable that we do it and we are asking if we can do it or what needs to be done.

The Deputy asked me if there is evidence of that practice in a current case. That case is before the courts and the court's duty is to decide that in conjunction with the liquidator and all the creditors. I have seen no evidence that that is the case here. I have heard commentary on it but no one has presented any evidence to me that that is the case. The situation the Deputy mentioned is probably different from other ones that were discussed originally in the Duffy Cahill report. Much of that report dealt with cases where there is an asset. I have not seen evidence of that and none has been presented to me but others will judge that. That is the purpose of the courts. The law is there to protect but we will see if we can make the law more user-friendly. The Tánaiste has committed to doing that work and it is under way in the Department. We will try to have that finished by the end of December.

Recommendation 4 was related to collective redundancies and the potential fund. Deputy O'Reilly asked me my view on that. The Department has not expressed a view on this. We are facilitating a conversation on the issue to see where it ends up. We will express a view when we have finished the consultation. The proposal is to establish a new fund that would honour collective agreements. Collective agreements are negotiated in companies, very often at an earlier stage of a company's restructuring when it wants to reduce the number of employees or make other changes. They are very often negotiated at an earlier stage, not necessarily at an insolvency stage. That issue must be teased out. What is being suggested here is that a fund would be established, probably at the time the agreement is made, that could pay for the agreement at a later stage. In fairness, the majority of companies working with trade unions and employees enter such collective agreements assuming they have resources to pay them. The position may change, however, in an insolvency years later. In that case, how would that play out? If there were a fund in place, as Deputy O'Reilly and others have referred to, it could be tapped into to pay for that. Who should contribute to such a fund? Not everybody has a collective agreement or enhanced entitlements. Should everybody pay into such a fund? That is the question we are asking.

If we draw on the State's Social Insurance Fund, it would mean every employer and employee had paid into it. We have to tease that out because not everybody would agree with using that fund or find it appropriate to use it. The percentage of employees covered by collective agreements is smaller that those covered by the Social Insurance Fund. We will discuss whether there should be a register of collective agreements that is visible and transparent in terms of where they are and who has them. That question may have been asked previously. That is an issue we want to tease out, which is exactly what we are doing. It would probably be appropriate to engage with the committee again at the end of this process. It is not that I am being awkward but it would be wrong of me to give an answer to this when it is being teased out.

The final question was on recommendation 6.

I ask the Minister of State to give a brief answer because we are running out of time.

I am sorry. Will the Deputy remind me of the question?

I would like to hear the Minister of State's understanding of what recommendation 6 says because I have heard different interpretations of it. Is it that a collective redundancy could only become a burden on an insolvency fund or whatever we call it in a case where the company has broken the law in respect of consultation or is this an open-ended scheme? Does it require the company to have failed in its obligations or is it an open-ended proposal?

At the time it was put forward, it was probably in respect of the failings of a company. However, that might not necessarily be the way it would be implemented if there is a suggestion that it could have other far-reaching consequences. That is the reason the recommendation has to be teased out. It provides for enhanced redundancy payments over and above the statutory entitlement in the event that there is a contravention by the employer of the Protection of Employment Act 1977. That refers to an earlier proposal around that 30-day consultation and if that Act has been contravened in respect of the consultation. It would apply if we changed the Act to allow for the 30-day consultation and it was not honoured. The authors of the Duffy Cahill report stress that we must look at all the proposals together. It is not a case of picking one over the other. Our job is to go further than that and examine other areas in addition to these six proposals because these are part of a very narrow focus and conversation around a hypothetical situation where assets have been sold off.

I welcome the Minister of State and Ms Coogan. Many of the questions I had intended to ask have been answered but one or two further questions arise. As the Minister of State indicated, there is an implied allegation that assets may have been hidden. He stated he had not seen any proof of that. Did he also say that the issue of the Debenhams workers is currently before the courts? I may have misheard him but I was not aware that was the case.

It is a liquidation.

It is before the courts.

The matter may be teased out in the courts in that case.

The Minister of State indicated he would examine the reason existing statutory provisions, including sanctions, are not used more often. He might give us an idea of what those provisions are and if they have been used previously.

The Minister of State described setting up a fund, which would only be used as a last resort. If it could be proved in law, for instance, that a company had hidden assets, those would be the first port of call rather than using this fund. It would almost be an invitation to hide assets if there was an easier path, that of using this fund, than going to court and using the law.

Has the Department considered making use of the existing provisions, in other words, the State becoming the actor here? I am not aware if the trade unions have decided to test these cases in court. That might be a question that should be asked of the trade unions. If they are clear that there may be assets hidden away, could the trade unions not take an action to test that?

The issue of defrauding employees is very serious. I thank the Minister of State for the work he is doing. I get the impression that he is taking it seriously. As was said earlier, I feel this needs a certain amount of attention and urgency.

I thank the Deputy. I assure him that we are taking it seriously. It is urgent, but it needs very careful consideration because there are far-reaching consequences. As a Department, our job is to get the balance right in this area. The Minister of State, Deputy Robert Troy, and I are committed to this. The Tánaiste is also dealing with the Labour Employer Economic Forum, LEEF. Our report will feed into the LEEF process, which involves all the relevant stakeholders.

I will ask Ms Tara Coogan to comment on the State's involvement in legal cases. She has been involved in these proceedings. Talking to some of the stakeholders, I get the sense that their legal advice was that using the legislation would be very costly. That has been referred to in the Duffy Cahill report. Moreover, it might not give them the result they need. They have obviously made a decision not to go down the road of availing of all the legislation. That is what I am trying to tease out. I want to research this issue. These laws are there to act as a deterrent, but they are also there to be used. If they are not being used, we have to find out why. To use the laws a party has to believe that assets are being hidden. I hear a lot of talk about assets in certain situations and I am not sure the evidence backs it up. The courts will decide that. A liquidator's job is to pursue all the assets to pay all the debts.

The Duffy Cahill report touches on the idea of the State assuming that responsibility through changes to the Redundancy Payments Acts. The State can instruct the liquidator to chase down these assets and provide the resources for it to do so. Ms Coogan is much more of an expert than I am, so I will let her discuss that.

Deputies also referred to collective agreements and the Social Insurance Fund. In any situation where a collective agreement on enhanced terms of employment is reached, everybody sitting around the table believes the money to pay for it exists. Presumably parties would not agree to certain benefits if they did not believe someone would pay them. At some point, the funding to meet these obligations existed. If a collective agreement is in place, it would follow that there are sufficient assets to pay out on any change in the structure of the business. However, collective agreements are often made when a company is restructuring. A deal is done and the company pays out there and then. People take voluntary redundancy because of that enhanced package. That package sometimes sets a precedent, which is where the matter of compensation arises. In common with some stakeholders, the Duffy Cahill report suggests that assets or money should be ring-fenced to pay out on such agreements. On the face of it, that is a private decision for each individual company or group of companies. The other question is whether the State should provide that funding if necessary. That is a very different question. It would be a draw on the Social Insurance Fund, which is under a lot of pressure at the moment.

Ms Tara Coogan

The Deputy asked about the remedies and protections available in company law. In the interests of time, it might be helpful if we forward a briefing note on that through the Chair. That could be shared with all the committee members. I will give the committee a flavour of some of the available remedies.

There are provisions under the Companies Act 2014 whereby the corporate veil can be lifted. If two corporate entities are involved, it is possible to look into the affairs of a second company in certain circumstances, provided the test outlined in the Act can be met. There is also a provision allowing for the pooling of assets of related companies. Again, very stringent tests are associated with these. We have to accept that while many people look at overall structures, distinct companies are separate legal persons. Those matters have to be addressed.

There are also mechanisms that allow a liquidator to look back over the two-year period prior to the insolvency to see if there have been any inappropriate transfers of assets, payments that do not ring true, etc. Those transfers can be recovered. The other day the committee discussed cases where there has been a fraudulent effect. Those provisions are in place. They are quite extensive so I will prepare a note on them.

I am very mindful of the fact that a specific case is involved so I will speak about litigation in very general terms. This is a matter for our colleagues in the Department of Social Protection. It is important that the committee appreciates that while payouts to insured workers are always honoured in the context of insolvencies, companies sometimes undergo restructuring where voluntary redundancies arise but they are genuinely struggling to meet their statutory entitlements. The Social Insurance Fund can be relied upon in those circumstances. It must be understood that in Ireland we honour employees' statutory entitlements. I will not say generous because that is not appropriate but we make quite extensive payments in certain circumstances.

There is also a duty in certain circumstances because a liquidation is an ongoing process. We are not 100% clear on what the situation in a given company is. At the end of a liquidation, if it appears that assets are available or contributions could have been made, our colleagues will go after that company and try to recover certain assets for the Social Insurance Fund. When the Minister steps in and makes redundancy payments, he or she becomes a creditor and is entitled under the Companies Act 2014 to seek certain remedies in insolvencies. I hope that answers the Deputy's question.

The first thing that strikes me about the Government's approach is the complete lack of urgency. That came across in the Minister of State's opening statement. It was like an Oireachtas briefing. He told us the details of what the report says and then simply said the Government would consider it. What explains the lack of urgency of this Government and the previous Government on this matter when contrasted with the ability of the State to move very quickly on issues that it wants to address? Within weeks of the introduction of the Covid-19 pandemic unemployment payment, there were inspectors at airports checking for supposed welfare fraud. However, a series of recommendations have been made to help prevent corporate fraud and four years later, we are still at the stage of talking to the partners and seeking consent. Why is the State so slow-moving on this?

There are a couple of issue. The lack of urgency is a matter of the Deputy's opinion. We decided in July or August that we would review this. The programme for Government sets out the commitment to doing so. It is very complicated legislation. Many aspects of the legislation, such as the State's role in making payments, have been negotiated over many years. The latest change to the entitlement to two weeks' pay per year of employment was made in 2002. Paying out statutory entitlements is very costly for the State, but it is very important that when employees are left without their statutory entitlements the State steps in to honour them. That is the result of a lot of negotiation, which was necessary to bring everybody with us. No Minister is in a position to change policy just like that. We must go through a process involving all the stakeholders.

The Deputy notes that the recommendations in the Duffy Cahill report were made to deal with very specific hypothetical cases concerning assets. The legislation is there to remedy such situations but it does not seem to be in use. That is noted in the Duffy Cahill report. We are trying to strengthen that. As a result of this process, we could decide that the legislation is adequate but we need better ways to use it and the resources to do so. This process aims to tease those issues out.

It does involve looking over case law and involving stakeholders. We are prepared to make those changes to see if we can help that. It is an urgent decision. We decided during the summer that we would do this by December, and that is the work that we will do.

Will the Minister remind me when the Duffy Cahill report was published?

The report was published in 2016. When the authors were here, they told the committee that they dealt with a very specific situation, that they had a narrow terms of reference, and that is what they made their recommendations on. The recommendations were taken on board at the time by various Departments. A decision was made that it was not necessary to implement them as they were. We are reviewing that. We are discussing the report because of recent developments. I had not heard it referred to over the past three or four years. It is very significant this year because people are linking it to other examples. I am not sure that there is a relevant link but that is why we are having this discussion. However, it is appropriate that we review the legislation to see if we can strengthen it. I am all for strengthening workers' rights, and I know the Deputy is, and that is what we are here to do.

It is not credible for the Minister of State to claim there is no lack of urgency here when there is a report from 2016. He is saying there is no lack of urgency because it was decided to deal with it in a programme for Government from July. That is not credible at all. If he goes through the Dáil transcripts for the past four years, he will find that it has been raised by Opposition Deputies repeatedly. It is true that in the particular context of Debenhams, it has been raised more often, but it was raised and the previous Government, of which the Minister of State was a member, was not interested in doing anything on it.

Does he feel bad for the Debenhams workers? Would he like to apologise on behalf of the Government for not moving on this, allowing the report to sit on the shelf, and having a situation where they are out on strike for 240 days at this stage?

There are two issues here. The Duffy Cahill report was produced in relation to hypothetical situations, using examples from 2016. The report was published and its work taken on board by various Departments, which decided not to progress the recommendations. In some cases, there was no consensus on them. That is the discussion that we are having here about funds and different ways of achieving this. We have reopened that discussion and we think it is appropriate to do that. We are committed to doing that and we are looking at it again. It may result in making changes to strengthen this position if needs be. That is work the Chairman is doing and I respect that, and I am happy the committee is doing that. We are doing it too. All of us, ultimately, might arrive at changes that we agree on. It does not mean that we are only focusing on the six recommendations in the report because we are not; it goes beyond that into the entire area of redundancy and insolvency.

On the second part of the Deputy's question, he is drawing a specific link with the Duffy Cahill report. I am not sure that he is right in asserting the link, and the authors of the report did not draw that link here. They are potentially very different situations. I have seen no evidence to say the Debenhams situation could be addressed by the Duffy Cahill report and that they are similar. The report explicitly deals with the separation of assets. I do not see the evidence in the case we are discussing that the link is there. The Deputy is making that assumption but I cannot make that assumption because I do not have the evidence to do that.

Even after the situation with Debenhams, the Minister of State is still not giving a commitment to implement any of the recommendations. His position is the same as before, which is that if we can get consensus, we will do it. In effect, is it not the case that if employers say they are not convinced about this, then there is no consensus and once again the Government will not implement the recommendations? The Government is playing for time because there is a dispute but that will not stop this happening to another group of workers in six months or a year and we will be back here again. Then when it suits, we will have another review but the Government will not implement it.

That is not what I said at all. I said that I am very much committed to strengthening the legislative framework if we can and if it is worthwhile. The consensus is on having a fund because someone has to pay into that fund. That is a discussion on which consensus was reached in 2002 regarding the insolvency fund and so on. The situation with legislation is if the Department can make a judgement call where reviewing all this that we can strengthen this position, we will do that. That is a commitment we gave to Gerry Light of Mandate. We had this discussion in the context of Debenhams but it was a general conversation where he made it clear to me that the campaign by the Debenhams workers had two parts - first, to pursue their entitlements and rights, which the State is not involved in all that because it is a private situation with a private company, and, second, to strengthen the legislative position. I committed to doing that, as did the Tánaiste and the Minister of State, Deputy Troy. We are doing that work in the Department. The Deputy asked if that involves implementing the six proposals in the Duffy Cahill report and I cannot say. We will strengthen that and we might go further than the recommendations, or we might do it differently. Previously it was decided not to implement the recommendations and now we are looking at that. A few are relevant but may need to be slightly changed. The report's authors explicitly said many times that their terms of reference were very narrow. We are going beyond that, which is helpful and worthwhile, and I think it will result in legislative changes.

I do not think that workers around the country will believe that the Government is not implementing these now or giving a commitment to do so because it will do something even better. Perhaps I will be shocked, surprised and very grateful if it does.

I have one final question which is somewhat related. Has the Government made a decision about whether it will reinstate the right of workers to seek redundancy? That is due to on 1 December but it was suspended because of coronavirus. Will it happen on 1 December or is it likely to be extended again?

It was due to go to Cabinet yesterday for extension. I believe it did but I will have to confirm that for the Deputy. That was the proposal. There is general understanding about why we are doing that, namely to save and protect jobs. It might delay some workers vindicating their rights. We believe the payments such as PUP are in place to strengthen their position. We are in the business of trying to keep people in employment and saving their jobs. Sometimes a request for redundancy could put a company in jeopardy, which is why the legislation has been extended.

It creates a problem for workers. If they move on to a different company because they need work, they lose their entitlement. They could have ten, 20 or 30 years of accumulated redundancy.

That is a fair point and I will bear it in mind. The Deputy is correct, but we have to made a decision in the round about what is best in the majority of cases.

The Duffy Cahill report is a case of a precedent that was not set when the Clerys case happened. The Minister of State said the terms of reference were narrow but it would have been helpful had corporate law been examined in respect of the tactical insolvency in the case of Debenhams. Debenhams may have been well flagged. I have a copy of a Financial Times report from 16 April 2020 outlining where Debenhams used administration. It had more than £1 billion in annual sales and 142 high street stores and it was flagging difficulties relating to the coronavirus pandemic. It is a pity that we did not have the directors of Debenhams come to Ireland and show their foresightedness that they could look to such a process so early on. There was no doubt that foreign ownership became an issue with the movement of assets. That is at the crux of the liquidation process, where the assets of the Irish entity were moved and heaped with debt. A twin track is going on here this morning - first, the possible implementation of the recommendations of the Duffy Cahill report and, second, the situation of the Debenhams workers. I have a particular interest, like others, given that Debenhams workers in Waterford continue to be on strike. I note the Taoiseach's comments in September when he spoke of the need for collective agreements to have parity with others in the liquidation process. I hope that is something the Minister of State is actively examining and can be addressed a little sooner.

The situation in Debenhams occurred significantly because of foreign ownership of an Irish trading business. I am thinking of Brexit. Many of the high street stores are UK corporate companies. There is a great deal of trading difficulty at the moment.

Do we know what the situation is? Could we have another Debenhams tomorrow? Perhaps Ms Coogan has an opinion on this. Have we done anything in company law to try to close this loophole that allowed that insolvency to happen?

Deputy Shanahan is expressing opinions on what happened in the situation involving Debenhams. I do not have the evidence to say whether he is right or wrong. I cannot answer his question because he is making assumptions. I am not sure he has the evidence to back them up. If he has, it would be very useful to the conversation around that company. I have heard others make similar comments about assets and the movement of assets. This is what the Duffy Cahill report is about. It is about legislation. It is about those hypothetical cases involving other companies but I have not heard the report's authors say that they have made a link between their proposals and the situation involving Debenhams. I am not sure there is proof of assets being moved. The Deputy and others are saying that but-----

I am paraphrasing what was put into the public domain. I am not saying it; I am paraphrasing what was said.

I cannot say it because I have no evidence of it. The courts will decide that, which is what the liquidation process is about. The Duffy Cahill report made recommendations around preventing companies that might engage in that practice but that is not to say the companies we are discussing have engaged in it. That is an opinion. Some Members of this House have made assumptions, rightly or wrongly, but I do not have the evidence to make that comment. If anyone has any evidence, it would be very useful to the liquidation process to make sure employees get their entitlements if the assets are there because I presume that when those agreements were made, the assets were there. As I said previously, people who enter collective agreements understand there is enough funding in place to pay for them down the line.

The Deputy referred to foreign ownership. Again, I do not think there is necessarily any connection between what happened to Debenhams and who owned it. From what I can see, Debenhams has been in trading difficulties for many years. I have not followed its story - I am not involved in retail - but the fact that it was restructuring in 2015 or 2016 around redundancies showed that it had difficulties for a long number of years. I am not sure it is right to say it is because it belonged to a foreign owner. The Deputy is asking us to look at the owners of every company and see what needs to be done. I am not sure where he is going with that.

I chaired the retail forum and I engage practically daily with the retail sector. The trade unions are represented on the forum. We discuss all the circumstances relating to retail and Covid. Retail is a major employer. Over 300,000 people are employed in the retail sector and it one I want to develop. I want to recognise and develop the skills in this area and bring in new technologies. There are loads of opportunities and potential for retail but it is in a very difficult period. This is why the State is moving very quickly to put supports in place using taxpayers' money to support these businesses and guide them through this period. Being restricted in terms of trading when one's premises is closed is very difficult so we are working with that sector to bring it through this. It has a positive future if we can get through this. That does not mean there will not be more companies that will end up in a difficult situation. Some are already very close to or are in that situation and we will engage with them all as quickly as possible. This is what we are trying to do.

Regarding ownership, I am not sure what changes Deputy Shanahan wants us to introduce or what he is trying to achieve. Again, I must say the situation is different compared with what is referred to in the Duffy Cahill report in respect of where others are joining the dots. I do not think the authors would agree with the Deputy on that point.

We could spend a lot of time debating that. Ms Cahill addressed the previous meeting of the committee. She referred to the ability of the related company to pay the debts of the insolvent company where it has in some way contributed to the insolvency, as set out in section 599, and said that the provision seems to have never been invoked. I draw the Minister of State's attention to that. I think that might relate to Debenhams. I will move away from the subject of Debenhams.

In terms of the provision of future agreements and possible setting up of a fund, I agree with the Minister of State. It is very difficult to understand how this is going to work. People might come into employment, pay into a fund and leave the employment and part of their payments are left behind and they might never get a follow-on residual benefit. I accept that but we must do something about creating some security. What about mandatory employee share ownership trusts for companies? We would set up and mandate employee share ownership trusts where companies have some benefit in ownership assuming it goes on. In that instance, they obviously get paid for performance but in the event of liquidation, there might be some value in that. This might be something worth looking at.

My next point goes back to Debenhams. I know people closer to the unions talk about pay bargaining. Where pay agreements are made, is there an opportunity to have them provisioned in a company's balance sheet and corporate accounts? In other words, if there is an agreement, does it show up as a provisioned debt within the company so that in the event of insolvency where a liquidator comes in, that forms part of the debts of the company and it is clear that a benefit is due to the employees?

On that last point, that is probably where we think the benefit might be regarding having a visible list of agreements that have been reached. Again, they are private agreements reached in private companies. The State does not have an involvement. They are private arrangements in private companies but it would beneficial for all involved - certainly employees and everyone else - if we can see them and clearly know they are there. I have asked whether we can try to get a handle on how many private agreements have been made so that is something we are looking at. The question about it being on the balance sheet is a discussion about having a fund. If a company enters into an agreement, I presume at that time in good faith, is there a way of paying for those arrangements? Generally, those agreements were paid out quite quickly because they are part of the process of that time. That is my understanding of them. If they are to be there long term because in some cases, they are or become terms of employment or part of an employment negotiation, are funds allocated or an asset ring-fenced to pay for them? That is what the Duffy Cahill report looked at.

On that point, namely, the question of employees being able to insure themselves against being temporarily out of work for illness, essentially, it might be possible for employees to seek private insurance to cover them for redundancy. Would the Government look at providing a tax break for that type of insurance? It might be a way of coming at this problem from a different angle to give some security to people, particularly those in precarious employment.

I welcome all of the Deputy's suggestions and will take them on board and look through them because, again, we are trying to draw on international experience referenced by others. In respect of employees taking out insurance for redundancy, the State does provide that insurance in terms of statutory redundancy and every other entitlement such as holiday pay and outstanding wages. The State does step in. The Social Insurance Fund is available but, again, the first call is the assets of a company to pay out what the employees are entitled to. If the company cannot do that and there are no assets to do that, the State steps in. If the State steps in, it also tries to pursue any remaining assets because it is the taxpayer who is stepping in. The draw on the fund this year is up to €4 billion. A lot of money is being paid out.

I must start by expressing my genuine disappointment at the Minister of State's statement because he does not say anything in it. He tells us what was in the Duffy Cahill report and that he is reviewing things - a nice long list - and we are no further along and are no wiser about what he is actually going to do in the teeth of a crisis. He said something very strange a few minutes ago. He said that in respect of the Duffy Cahill report, it was a very specific situation. No, it was not. I can tell him that Deputy Quinlivan and I were standing with the HMV workers ten years. I can talk to the Minister of State about Clerys but also about Connolly Shoes, La Senza and TalkTalk. There has been a litany of these cases in the past.

What is more important now is that according to a liquidator just a couple of weeks ago on RTÉ, we are heading into between 1,000 and 2,000 further liquidations next year because of the very grave situation we are in. That is why I am absolutely flabbergasted - and I am not speaking personally, the Minister of State knows that - that this Department has been completely failing workers for years now and I instanced all of those situations. A couple of minutes ago, the Minister of State said of the Duffy Cahill report that its work was taken on board. How was it taken on board?

I will say two things. The authors themselves have said the terms of reference were very narrow so I am just quoting what they said. The Senator is disappointed with my statement and that is his opinion. I am engaging in a process in the Department that is not finished; we are in the middle of it. Therefore, it would not be appropriate for me to come in and say that this is what I, or myself and the Minister of State, Deputy Troy, or myself and the Tánaiste, or the Department have decided. What then would be the point of having a consultation or discussion in the next month? What would the point even be of engaging here? I would rather the Senator welcome the opportunity to actually have engagement. I am listening to suggestions and questions being put forward by Deputy Shanahan and others and we are very open to any of those suggestions. I assume that is what the Chairman is doing by having this review. I assume it is about seeing how we can all achieve the same outcome, which is to strengthen the position of employees. That is what I am committed to doing but it might go beyond Duffy Cahill.

The Duffy Cahill recommendations were submitted in 2016 to the Departments. They were reviewed and looked at and decisions were taken at the time to not move on with them. That is what we are looking back over again, to see if we can take a different approach or if a part of these proposals can give us the right solution. Deputy Bruton referred to proposal No. 1 on the 30 days. We believe we can adjust that proposal and make something out of that and that is what we are going to try to do. Again, however, I am very conscious that there are a lot of stakeholders who want to contribute to this discussion because it has a significant impact on employment, employment rights, companies and so on. I do not want to do anything that has a knock-on negative impact; I want to get the situation right here. The State is protecting workers and the State pays out, using taxpayers' money, through the Social Insurance Fund on employees' statutory entitlements. That is honoured and I have not seen a case where it has not been. Again, it is taxpayers' money, used very correctly and wisely and by agreement over many years. That is what the State does in this situation.

I take up that last point because the Minister of State's colleague, Ms Coogan, did use the phrase - and I want to be careful to ensure I get it right - "I will not say generous because that is not appropriate but we make quite extensive payments in certain circumstances". Now I must tell the Minister of State, having spoken to Debenhams workers in Limerick, who have in some cases given 30 or 40 years of service, they do not view it as an extensive payment. Their view is that they have been let down by the State, specifically because four years ago, the Minister of State's Government commissioned a report and as he has acknowledged himself, it refused to implement those proposals. I put it to him that there is a very clear demarcation here. On the one hand is a report with six proposals which the Minister of State's Government commissioned four years ago and which the Irish Congress of Trade Unions asked that Government to implement. On the other hand, IBEC asked that Government not to implement any of the proposals. Has IBEC effectively been given a veto on protecting workers' rights in this country?

We have discussed this in the Dáil a few times. The Taoiseach has referred to it, as has the Tánaiste, myself and others. The Senator assumes that the Duffy Cahill report would be of assistance to the Debenhams workers.

The Minister of State is missing the point.

No, I am sorry-----

No, he is. I have given him a whole litany of cases.

Am I allowed to answer the question, Chairman?

Of course. The Minister of State should go ahead.

We are very clearly saying we do not see how it assists. I think the authors have said so as well because the Senator has tried to get them to say so, from what I could see from reading the transcripts. They did not say that their report was applicable to the Debenhams situation. Their report was about companies in deficit situations. They have indeed referred to some cases where that looks to have happened with assets but they are not saying their report would serve a purpose in the Debenhams situation or would aid the employees there. They are not saying that, that I can see. We looked at this and do not believe it would have helped them either. The Taoiseach, Tánaiste and many others have engaged with the unions and Mandate trying to help with negotiations and put in place a process. The Workplace Relations Commission, WRC, was the most recent one. It has not borne fruit yet. Again, the Taoiseach has said he wants more engagement around that. However, this is a private agreement. The State will honour, and has honoured, the statutory agreements by paying out. There are other agreements there that are private agreements that the State does not get involved in, and has not in the case of many other companies.

The Senator referenced the potential for 1,000 liquidations. I think there were potentially 8,000 already this year and there are thousands every year for different scenarios as well. The State does not and has not in the past got involved in private agreements. It will always get involved in honouring the statutory responsibilities of all employees - and rightly so. That is what we are committed to doing and we are going forward with this to see if we can strengthen the legislation or make it more effective. It is not yet proven that we can. It is very clear that what is there is not being used. What I really want to understand is why. That does not mean that any of that can aid the Debenhams workers because they are very different situations. The Duffy Cahill report references companies in relation to assets, the moving of assets and things like that. There is no evidence of that that I have seen or that anyone has brought to my attention where Debenhams is concerned. It would be very useful if there were assets there because then the employees would get greater payments. People are saying that there are assets but that is opinion.

The point is I have given the Minister of State a whole series of cases. What Duffy Cahill said was they were not being specific to any case but it was quite clear that their proposals would have relevance across a number of the cases I have cited. It would potentially have had relevance to Debenhams. The fact of the matter is that the EU Court of Appeal has found this State has failed to adequately implement EU legislation by failing to provide a procedure to protect employees' entitlements in the event of an informal insolvency of their employer. What completely baffles me is why the Department has done nothing about it to date. Today the Minister of State appears to be buying time again. As I have only a minute or so left, I want an assurance that he will bring forward positive proposals to protect employees. He should start with the first proposal Deputy Bruton mentioned, to insist that everyone has that right of consultation for 30 days. Will the Minister of State at least give us a commitment that that will happen? If he does, can he give a commitment for when it will happen because this tsunami of further liquidations is coming at us like a train, early next year. Talking about this without giving us firm time commitments is, frankly, not good enough.

To be clear, the State does honour statutory entitlements. It always does and it will do in every case. It pays out.

That is not what I am talking about.

I am sorry, the Senator made-----

That is not what I referred to. If the Minister of State is going to answer the question he should answer the question I asked.

To clarify again, the State pays out. In relation to Debenhams, over 1,700 applications have been made and they have been paid out in most cases as well. We understand the plight of the workers there and we will try to work with them as best we possibly can. We will try to engage with the unions who are still engaging with liquidators trying to see if they can source extra funds to pay out on some of the other private agreements. The State has ensured that where we can get involved, we have done. The Taoiseach and Tánaiste have even gone beyond that to try to help the situation and to move it on. I said at the start of this, and have repeated since, that the reason we are here is the same reason members are, that is, to see if we can strengthen this position. We are looking at company law, employment law and the crossover between the two because both are in the remit of the Department. We are committed to making changes and if we can find ones that are effective, worthwhile and implementable then we will do that. Of course I will come back to the committee and tease through our proposals and our recommendations. I am very happy to do that. I cannot today because we are not at the end of that process yet. It would not make sense.

When will the Minister of State do that?

As soon as they are ready. Our hope is to have a lot of this work completed towards the end of December. Certainly if it is in conjunction with the review of the company law review group which is targeted for the end of December. We should be in a position to do that. As soon as we have it I am happy to engage at the committee. This is a very open and transparent process we are involved in. It involves the public. I sent a letter out yesterday, which I can copy to the Chairman, asking all relevant stakeholders for their views and we will work through them all. Nobody has any greater access than anyone else in relation to our views on this. Our job as a Department is to get the balance right on behalf of the taxpayer and of employees. It is to ensure a very pro jobs environment, to protect existing jobs and to have a situation where we can grow more and ensure employees are treated properly and fairly and get their entitlements. The State steps in there, when there is any doubt as to statutory entitlements and I cannot be any clearer than that.

Ms Tara Coogan

I just want to clarify something because there is a bit of a tendency to lump all kinds of insolvencies together.

I appreciate HMV and La Senza are specific types of scenarios. Again, however, in the context of the Duffy Cahill report, there is an asset transfer issue. There are realities when companies decide to withdraw from a jurisdiction. They become insolvent and cease trading. There are different types of insolvency situations but we just need to be clear on that.

The Senator is absolutely correct. There is a recognised ruling that Ireland is in breach of its duties to implement access to the Social Insurance Fund in circumstances where the employer has not formally declared itself insolvent. That is where the employer has not done what it is supposed to do so the employer has gone. It is not a tactical insolvency. I believe one uses a different phrase there. That is, however, a different situation and it is something we are acutely aware of. We have identified a solution and will be addressing it urgently. That is a genuine urgent issue.

First, I thank the Minister of State for attending this morning. I note from his contribution that he, like other members, specifically raised the issue of Debenhams. I am aware of the Debenhams situation as it has a store in the heart of the city close to where I was raised. I know the employees particularly well in this situation.

I will give one example of a constituent who contacted me. After leaving secondary school, he started his career in Roches Stores and had more than 31 years' service. He is still a relatively young man and is now in a situation because of his continuous employment. It seems to be extremely unfair. I note from the Minister of State's contribution this morning that it is being prioritised and everything that can be done is being done. I certainly hope so. In saying that, however, as a public representative, it is difficult when one meets the employees. They have been out for more than 220 days now. It is bad enough with Covid-19 and everything else, as we are all aware, but I certainly believe there will be a resolution soon.

Perhaps the Minister of State might explain further. We had a briefing here a couple of weeks ago regarding the Duffy Cahill report. If those recommendations were implemented in full, would that have prevented the Debenhams situation? Would that have prevented the current situation?

At the end of the day, politics is about solutions and I welcome the Minister of State's initiative regarding the fund. Perhaps he could explain it to me in a little bit more detail. Do I take it from the discussion that in the end-of-year company accounts, each individual company would ring-fence money as part of its annual return and that would be built up over a period? Going forward, what is the Minister of State's understanding of that particular fund he mentioned?

We all understand how difficult it is for all those involved in Debenhams or who are in any situation like that. It is not a nice place to be and, certainly, the workers feel strongly about it. As the Senator said, they have been out on the picket lines for more than 200 days. I have met and engaged with some of the employees and with the unions quite a lot around this. I fully understand and sympathise with them.

The State will do all it can within the law and within our framework to try to help and work with that. We are doing that as far as we possibly can in our role. The difficulty, however, is enhanced redundancy, and negotiations around that are a private matter. They are not something the State was part of, or part of that agreement. We do not have a role in seeing that part of it out because it is a private situation and it varies from company to company.

Regarding the discussion around the fund, again, it is a suggestion that has been put forward by many and others have commented on it. Some will be for it and some will be against it. It is being teased through. Will that fund help the situation? No decisions have been made on that fund or a potential fund. Senator Crowe and Deputy Shanahan asked how it will work and whether there will be different versions of it. Again, it goes back to whether an arrangement is made to have enhanced redundancy or other enhanced entitlements. Who pays for that? If it is a private decision in a company, who should pay for it? I believe employees in that situation who have agreed to it would fully expect and feel entitled to it, and feel it is theirs. In that respect, therefore, one would say there should be some ring-fenced funding to guarantee it is paid out.

Regarding statutory entitlements, the State is fully supportive and is behind and part of that. The State makes sure there is a ring-fenced fund to pay out on that. It is called the Social Insurance Fund. The role of the State is to provide a strong commitment there and it is well recognised. The other fund is about enhanced redundancy entitlements or other issues. One must ask the question then, who pays into that fund? Who will pay for that? I posed that question to all those in the discussion to hear their views. I am sure the committee may also have views on it.

The Duffy Cahill report refers to employees having equality and one cannot have different types of rights for employees. One must have equality. If, therefore, that fund is in place for those who have enhanced entitlements and others do not have access to it, is that right and fair? That is the kind of stuff we must tease out and that is being looked at.

It has been much asserted by people that were the Duffy Cahill recommendations implemented, Debenhams would not be in the situation it is. I have not seen the evidence to back up that assertion. I am being truthful on that. That does not mean I am right. I have seen no evidence. People have claimed it and have joined the two together. I have been through the Duffy Cahill report probably ten or 11 times at this stage. I have read and gone through it and I cannot see the evidence. I believe the authors of the report did not say that either because, again, they kept referring to the fact their report is about situations involving assets and the separation of assets. That is what they were asked to report on and make recommendations on, and that is what they did. They did not go into the policy, funding or cost of that. They just made potential recommendations. Our job is to go deeper than that and look at it all. I have not, however, seen the evidence to say that if those proposals were implemented, we would not have the tragic situation that is happening in Debenhams, and it is tragic. We do not want anyone losing his or her job. So many people were committed, many of whom had 30 years-plus service. It is difficult for any of us to lose a job. It is, however, even more so when a person was committed to a company for so long and gave so much of his or her life, and probably grew up in the place. In many cases, it was generations of families. That is difficult to accept and hard to work on. That is why the State has given this as much attention as it possibly can to try to help and to work with the unions. We are not, however, privy to some of the private parts of that process. We are prohibited by law to step in, in some cases. We can only work within the framework we have.

As we are aware, this has been going on now for more than 230 days, or somewhere in that region. Does the Minister of State see a solution? I appreciate him coming in, and I know from speaking with the Minister of State, Deputy Troy, and others that there is an urgency and people want a resolution. What is the timeframe? Where does the Minister of State see a solution for the Debenhams workers?

What was important for me was that the Debenhams workers and the unions had been negotiating with the liquidators and were, on the face of it, making progress. An offer was put on the table earlier in the summer. That was not accepted, or was not deemed to be enough. That was not my decision. It was up to the employees, shop stewards and unions to make a decision on that. Negotiations have been on and off with the liquidator. Again, it is the role of the liquidator, under the guidance of the courts, to do that within existing law. Its job is to work with the unions, and the unions must do a good job to make sure everyone's entitlements are honoured.

The State's role is to make sure we honour the statutory entitlements and pay out as soon they are looked for. In most cases, they have been paid out. Some cases have been slightly delayed.

The Deputy might have mentioned Roches Stores. There were a few complications relating to the transfer of responsibilities at an earlier stage but that has all been teased out. The majority of them have got their funds and we had to make sure of that. As to where this ends up, I cannot predict that. It is a private company, not a State company. We are not involved in it. The Taoiseach and the Tánaiste have addressed this. The Workplace Relations Commission was involved and chaired talks. There are attempts again now to bring people around the table. The only way this will be resolved is around the table trying to work out if there is a mechanism to find extra resources to pay the employees in excess of their statutory entitlements. The liquidator is in charge of that process because he is in charge of managing whatever assets are left.

Regarding the number of employees who are still waiting for their statutory payout, will that process be fully completed by the end of December?

I do not see why that should not be the case. There were some complicated cases but we are working through those. The Department of Social Protection has gone through most cases and a commitment has been made in that respect. In the majority of cases, payment is made in less than eight weeks. The most recent figure I saw is that more than 750 payouts have already been made under the two different funds, but I will check if there are any remaining cases. I discussed this with the Minister for Social Protection, Deputy Humphreys, a few weeks ago. Her Department is responsive to these cases and puts every effort into the process but there were some complicated cases.

I thank the Minister of State his attendance. We have heard a great deal this morning I want to know what is new, in concrete terms, arising from the Minister of State's opening statement and comments. I appreciate there has been considerable discussion and consultation with stakeholders but we are at a stage where we need to understand and have a clear roadmap as to what precisely will happen now. We have the case of the Debenhams workers and, as was said earlier, thousands of redundancies are coming down the tracks next year. There is an urgency to this legislation. Two weeks ago, it was announced that the Company Law Review Group would undertake a review of the potential company law changes with respect to the insolvency and redundancy situation. Has a separate employment law review been commenced?

The Senator will be familiar with the position relating to sick pay. She and others introduced a Bill, which we debated, and the Government gave a commitment to enter into a process to bring that to a conclusion. The Tánaiste stated that he wanted to see changes in the area of sick pay and committed to introducing a sick pay scheme. That kicked off a process spanning a few months involving the stakeholders. That was followed by a public consultation and we are now in a strong position to propose legislation in March or April 2021. A similar process was agreed in this area.

The Senator asked about the Company Law Review Group. A commitment was made on 1 July in the programme for Government to carry out a review. We discussed that as well as a commitment to focus on employment law. This matter came up for discussion again in the context of the Debenhams case. We began the work this work months ago, not two weeks ago. The Company Law Review Group is committed to reporting in December.

Regarding employment law, a few weeks ago, the Department assumed functions around employment law legislation and everything associated with it. We are in a strong position to bring forward suggested changes in the coming weeks, which will be effective in strengthening the position. That does not mean we are saying all six proposals are worthwhile or can be implemented. In the past, a decision was made not to implement them. We are considering these proposals and others to strengthen the legislation. The Senator has asked about concrete steps. We are in the middle of this and it would be wrong of me to produce a list of actions today. I am not in the business of doing that.

I am not asking for the list of actions. I want a timeline.

The process is under way.

When does the Minister of State envisage he will have those employment law amendments. On 4 November, Nessa Cahill made it clear that the implementation of the recommendations of the Duffy Cahill report can be exclusively undertaken within the employment law sphere. I want to get a clear timeline from the Minister of State on when the amendments to the legislation will come before the Houses.

There are far-reaching consequences in that regard. That is why it is important to look at company law and employment law together to get the balance right. Nessa Cahilll is right that some of these recommendations could be implemented but Ms Cahill and Mr. Duffy also said-----

Do we have a clear time schedule or not?

-----that the existing legislation covers the majority of cases. It is not a case that there is no law in place.

I will ask about that in a moment. I want to understand where we are with the employment law changes.

I wrote to the stakeholders again this week with a list of other questions to be teased out. Deputy Louise O'Reilly and other members asked about the fund and we want to tease that out more and get views and other questions. A few suggestions have been made today. In my letter, I asked for a report by, I believe, 11 December. We should be in a position to have another meeting on 15 or 16 December. That should finish that consultation that I and the Minister of State, Deputy Troy, have chaired on insolvency and redundancy and the cross-over between company law and employment law. That is taking place in parallel with the commitment that the Company Law Review Group will finish its work in December. At the end of December, we should be in a position to report back on what our thinking is and where we can go with this.

To be clear, this committee can expect to get a set of recommendations from the Department in December.

We will be in a good position after the second round of consultations to come back to the committee with our thinking on where we can go with this. I am not going to tie myself to a timeline because I am involved with other stakeholders and I cannot dictate their diaries, but that is the hope.

No, this is important in terms of there being a sense of urgency, or otherwise, about this.

The Duffy Cahill report relates to specific cases connected with assets. It does not cover every redundancy and insolvency.

To be clear, the report's recommendations go beyond that. The Minister of State indicated earlier that the State cannot create a system where one worker is treated more favourably than another and spoke about the desirability of having a register of collective agreements. Is it desirable that workers be able to access collective agreements?

It is desirable and they do that. That is a private discussion they enter into and agree enhanced terms, be it of redundancy or in other situations. That is privately done. The State has legislation and statutory obligations. The Duffy Cahill report refers to this. If employees come to a private arrangement that they are entitled to more redundancy, the question we have to ask is who pays for that extra entitlement over the next employee. That is what we are saying.

I am asking about the desire that workers should be able to access a collective agreement. Ireland stands apart from many other countries in not recognising the right of workers to engage in collective bargaining.

I think the Senator is wrong on that. Her colleague, Deputy Nash, brought forward legislation to clarify the position in that regard in 2015. Workers do have access to collective bargaining.

No. They have the right to be benchmarked against other workers. Workers in Ireland do not have the right to be recognised for collective bargaining purposes. I take on board the Minister of State's point that it is desirable for workers to have access to collective agreements.

Workers have negotiated collective agreements. The Duffy Cahill report was about how to honour those agreements afterwards.

When will we see the recommendations from the Minister of State's various discussions and reviews? There is also an issue with the timeline for bringing legislation through the Houses. I want to better understand the context in which the Minister of State is undertaking the review. There is a commitment to this in the programme for Government. He spoke a great deal about the exceptional circumstances under which the Duffy Cahill report was commissioned. Does he believe there is an urgency about implementing the report and bringing forward a set of amendments to employment law? Is that urgent or not?

This discussion is on the Duffy Cahill report. I referred to the Debenhams case and I am conscious most members referred to it in previous discussions. The reason I referred to it is that the Duffy Cahill report has come back into mainstream discussion as a result of the Debenhams case.

When I met Debenhams workers, I gave a commitment that if I could strengthen the legislation for future cases I would do that. The Tánaiste and the Taoiseach made the same commitment and that is the space we are in. Our aim is to see if we can strengthen the legislation on their behalf, which is a good place to be. The question is if we can strengthen it and how we can do it. I cannot say today that that means implementing the six proposals and other proposals. That is the process we are involved in, but the commitment is to do that. As to whether I think that is a good thing; of course it is a good thing if we can strengthen the legislation. A key focus of mine is why the existing legislation is not being used. It exists to prevent this happening yet it is not being used or has not been successful. That is part of the review. Even Ms Cahill, one of the authors of the Duffy Cahill report, has said the legislation is in place, but it is not being used.

I thank the Minister of State. I wish to be very clear that the authors of the report have said that the company law provisions are not being optimally used but there are gaps in the sphere of employment law.

That is correct.

They are related, but they are very distinct and separate.

The authors of the report also said we have to take all the proposals together, that one individual proposal will not work. The proposals have a knock-on effect as well. The main changes the report authors recommend are in employment legislation. That is the reason I am here, because that is the focus of my work as Minister of State.

I thank the Minister of State.

I listened very carefully to the questions of other members and to the Minister of State. He referred to the Debenhams dispute. I clearly remember the Clerys dispute and we also had a dispute in Cork with Vita Cortex where workers had to have a sit-in for months. Similar issues arose with Coca-Cola in Cork where workers had to protest and picket outside for months. This issue is not confined to Debenhams, it is about workers' rights. The Duffy Cahill report was published in 2016. What the Debenhams workers are so upset about is that if the recommendations of the Duffy Cahill report had been implemented within the past four years we would know whether it was relevant to them or not, but we do not know because nothing was done in the past four years. The Minister of State has said we do not know if it would have affected them, but the reason we do not know is because this Government and the previous Government did nothing to implement the report's recommendations.

Will the recommendations finally be implemented for the Debenhams workers and other workers who will, unfortunately, be in a similar position going forward? If more changes are needed following the review the Minister of State is carrying out, will they also be implemented? Senator Sherlock asked about timelines. They are vitally important. We need to know when the issue will be addressed.

The Minister of State said the Taoiseach and the Tánaiste gave the Debenhams workers a commitment to strengthen the legislation. I ask that a commitment would be given to solve the Debenhams dispute before Christmas. It is unbelievable to have workers on the picket lines for eight months. The Government needs to step up now.

I will try to respond to the Deputy.

The Minister of State must be very brief. We are running out of time. We have to exit the room because of Covid.

I will try to answer the Deputy's questions. There is an assumption by Deputy Gould and many others that the implementation of the Duffy Cahill report would resolve the situation for Debenhams workers. I must be truthful. I have read through the document on a number of occasions and I have listened to debates. I do not see the evidence to support that. I am not sure that is the case and I have not seen the evidence to support it. I wish to be clear in that regard.

Regarding resolving the Debenhams case, again, the State can only get involved to a certain extent in this situation under the law. It is a private matter involving a private company. I have absolute sympathy for those workers. My heart goes out to them. I have met with them and engaged with them. What is more important, the State has stepped in to fulfil its responsibilities. Some parts of the situation relate to a private arrangement the workers have had with their company. They are working with the unions and others involved to try to resolve that. The State cannot just fix that. I wish it could. I know the Taoiseach wishes we could too, as does the Tánaiste, but we cannot do it just like that. We are trying to help with the negotiations and to encourage the parties to get back to the table. Where we did have a role, the various Departments immediately stepped up to answer that call.

Deputy Gould has asked about the recommendations. When the Duffy Cahill report was brought forward it contained six recommendations specific to scenarios concerning assets. The report authors said themselves they did not look at the wider policy context or address costs. That was not part of their brief. The brief of the Government and the Departments is to take the wider view on all of this and to look at the recommendations, the overall situation and the knock-on effect for policy and decisions on both employees and employers, the management of companies, assets and future jobs. We have to look at all of that and to get the balance right. That is what we are committed to doing to see if we can strengthen employees' rights. That is what I am committed to doing. Part of that work is reviewing these recommendations, which had been reviewed before and decisions were taken on them. We are looking at them again in other contexts and we are having a wider discussion around redundancy and insolvency to see if we can make positive changes that will have a positive impact, not just for the sake of it. We are here not just because of one situation and one company. We are discussing the legislation in general and the Duffy Cahill report. I was asked by Debenhams to do this and I said I would if I could find solutions that would be effective and worthwhile. That is what they asked and that is what we will do, but it will have a knock-on effect for everybody.

I hate to interrupt the Minister of State and Deputy Gould. I apologise to Deputy Gould as we have run out of time. We will wrap up because of Covid restrictions. Will the Minister of State commit to coming back to us in early January? The committee will make a submission to the consultation being carried out by the which he hopes to conclude by the end of December.

Yes, I would be delighted to come back in January. The Minister of State, Deputy Troy, would probably like to do the same. I would like to work with the committee on the issue. I believe in the committee system. I have been a committee member for many years. There is an opportunity to work through this issue and to make positive changes if we can prove they are needed and that they will be effective. That is key. We will return in January to do that. I will copy the committee on the letter we sent out to stakeholders and perhaps it could use that to focus some of the thoughts and questions we are trying to answer. I am not saying we have all the answers. That is why we are having the consultation. We want to tease out the issues with a view to making impactful legislative changes if they are required. It does not help when people add two and two and get five. That does not help my job of trying to bring forward legislation. I have to work with evidence and facts and deal with them as best as I possibly can. Thank you, Chairman, for your time.

I thank the Minister of State. He mentioned company assets. I will not mention the company's name but in my city its store is on sale at the moment for €9 million, so there are assets owned by some company somewhere and that might be looked at as well.

All the assets have been looked at as part of the liquidation process, which is responsible for realising the assets and turning them into money to pay all the debts, in conjunction with and under the supervision of the courts. You have identified one asset, Chairman. If the company owns it then that will be in play.

I thank the Minister of State.

Chair, could I-----

No, we have no time. I am sorry.

That concludes our consideration of the matter. I thank the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Damien English, for participating in the committee's meeting today. We appreciate his assistance and that of Ms Coogan in the consideration of this matter.

I will adjourn the meeting now. The next meeting is a private session on Tuesday, 1 December at 12 noon and the following meeting is a public session on Wednesday, 2 December at 9 a.m. when we will have presentations from IBEC, ICTU and Border Communities Against Brexit.

The joint committee adjourned at 11 a.m. until 9 a.m. on Wednesday, 2 December 2020.