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Company Closures

Dáil Éireann Debate, Wednesday - 27 May 2020

Wednesday, 27 May 2020

Questions (1010)

Bríd Smith


1010. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection the actions she plans to take regarding the closure of a business (details supplied); and if changes in legislation are planned to prevent employers taking similar actions in the months ahead specifically in respect of redundancy legislation and the provisions of the Protection of Employees (Fixed-Term Work) Act 2003. [8124/20]

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Written answers (Question to Employment)

Firstly, I would like to say that my thoughts are with all Debenhams workers who are dealing with job losses at this difficult time. As deputies are well aware, with the exception of grocery outlets, the retail sector has been particularly affected by the economic turmoil caused by Covid-19. Having come through a number of turbulent years and an examinership process, it is regrettable that the Debenhams workers now face redundancy.

I want to assure everybody that the my Department is assisting the affected workers through its Intreo service to help them in whatever way we can in terms of income supports and job-seeking over the coming weeks and months. Indeed over the past number of weeks officials from my Department have engaged with both officials from Mandate and with the Human Resource management team in Debenhams to ensure that all workers have received their due entitlements from my Department.

My officials are also available to assist these workers in the job search efforts over the period ahead and with advice on further education and training options that will help them to find work within their sector or in other sectors where work opportunities will become available as the economy improves over the period ahead.

Furthermore, the redundancy and insolvency section of my Department has already engaged with the liquidators appointed to Debenhams and is continuing to work with them to ensure that all claims in respect of employees are dealt with expeditiously.

Since the announcement of the liquidation of Debenhams there have been calls on the Government to intervene in or halt the liquidation of the company and to ensure that employees of Debenhams receive enhanced redundancy payments. Employee representatives have also called for the 30 day mandatory consultation period to be extended.

The Minister for Business, Enterprise and Innovation has been clear that she, as the Minister responsible for company law legislation, has no statutory power to intervene in a court supervised liquidation. A company is permitted to initiate a voluntary winding up where it has complied with requirements of the Companies Act 2014.

I have been asked by the Mandate Trade Union to utilise my powers in accordance with Section 15 of the Protection of Employment Act 1977. In this regard, I sought urgent legal advice from the Attorney General in relation to those powers as they pertain to a court appointed liquidator. I received those advices yesterday and they are unequivocal.

I am advised that I, as Minister, cannot exercise the powers in section 15 because those powers envisage engagement only with the employer. As is clear from the statutory definition, a liquidator is not an employer for the purposes of this Act. Therefore, there is no possibility of using the section 15 mechanism as suggested.

While we don’t have the power to ensure that Debenhams pay an enhanced redundancy package to its employees, an employer is obliged to pay the statutory redundancy entitlement as provided for in the Redundancy Payments Act 1967 and that is all that can be legally enforced against an employer.

As the company has been declared insolvent, the Department can provide a safety net for employees and the liquidator can submit claims for statutory redundancy and other wage related entitlements for payment from the Social Insurance Fund. We will ensure that the statutory redundancy entitlement which is laid out in legislation will be paid.

My officials inform me that the notification and consultation requirements of that Act, as they are construed, have also been complied with.

The employee representatives are aware that there are other avenues of recourse outside seeking ministerial intervention and I hope they consider their options in that regard.

The Protection of Employees (Fixed-Term Work) Act, 2003 offers significant protection to fixed term workers and the purpose of this legislation is:

1. to ensure that fixed term workers are afforded no less favourable treatment than their comparable permanent counterparts and

2. to prevent employers from abusing employees by employing them on a series of successive short fixed term contracts, rather than offering them a permanent one.

An employee who has worked continuously for at least 104 weeks under a fixed-term or specified purpose contract may qualify for a redundancy payment when the contract ends. In order for any permanent employee to qualify for redundancy they also require the same service so there is no distinction under the Fixed Term Work Act.

I trust this clarifies the matter for the Deputy.