Dáil Éireann Debate, Thursday - 15 October 2020
62. Deputy Gino Kenny asked the Tánaiste and Minister for Enterprise, Trade and Employment if he has discussed a dispute (details supplied) with the Minister for Finance; if so, if he has discussed the proposal that the State and the Revenue Commissioners stand aside as creditors to allow the liquidators prioritise former workers in order to achieve a resolution of the dispute; and if he will make a statement on the matter. [30567/20]
View answerDebenhams is a court-supervised liquidation, subject to oversight of the High Court and accordingly is sub judice. Under the Companies Act 2014, I have no power to intervene in a court-supervised liquidation.
Similarly, the Government cannot intervene with a liquidator, who has a statutory duty to realise assets and distribute to creditors in accordance with the law and who reports to the High Court.
Notwithstanding this, the Taoiseach, Government Ministers and I have met on a number of occasions with Debenhams employees and union representatives from Mandate to hear their views and concerns. While the Government cannot interfere with the High Court-overseen liquidation process, Ministers have sought at all times to ensure that the concerns of workers are heard and that the State’s employment and training services are responding to the needs of workers.
Preferential payments are provided for under section 621 of the Companies Act. A preferential creditor is one whose debts are deemed to be more important than the debts of another creditor. The current law is a result of careful balancing of the various rights of creditors, including employees. In terms of wage arrears, outstanding holiday pay, and pension scheme contributions, employees are already considered preferred creditors.
Under the Companies Act, a liquidator is under a statutory duty to realise and distribute the assets of an insolvent company in the order prescribed by law. Separately State creditors - including Revenue, Social Welfare and Local Authority rates - operate under statutory legal frameworks, which must be respected. Under these statutory frameworks, legally, the Government does not have discretion to forgo debts owed to the State by a particular company: that would represent picking and choosing debts owed to the taxpayer.
Specifically, Revenue has advised that it has no authority to direct the operations of a liquidator or to suggest how dividends are distributed among creditors and shareholders. Revenue is legally obliged to accept the level of dividends provided by the liquidator having regard to its status as a preferential creditor.
It is not clear that 'standing aside' would have any positive impact on the workers concerned. It is assumed that this would 'add more money to the pot' but in reality any proceeds from the sale of assets would only go towards meeting statutory redundancy. When the statutory limits are met, excess proceeds would revert to other creditors in order of preference.
The Government has committed in the Programme for Government to review whether the current legal provisions surrounding collective redundancies and the liquidation of companies effectively protect the rights of workers. I have asked the Company Law Review Group to undertake an expedited review of this commitment as it relates to company law, to be completed before the end of the year.
The Government has also undertaken to explore with the social partners proposals that have been made by ICTU.
The Government is supportive of the best outcome that is possible for the workers, within the legal framework available. I continue to call on all parties to enter into discussions and engage towards a fair resolution.
