Dáil Éireann díospóireacht -
Tuesday, 16 Jun 2015

Vol. 882 No. 3

Leaders' Questions

Deputy Micheál Martin

I met with Clerys staff, suppliers and workers at midday on O'Connell Street today. I will speak in a non-partisan way on what has been a shocking, cold and callous way of closing an iconic and historic store. There is no doubt that the workers were treated in an appalling manner, as were the suppliers. Indeed, other jobs could be at risk due to the manner in which suppliers were treated, as well as the concession stores and their staff.

What is happening is unethical and immoral. It speaks of a lack of respect for workers. There is an absence of decency and dignity in how this was approached. It is symptomatic of a trend, which unfortunately is gaining momentum, of consistent undermining of workers in certain sectors of the economy. We have seen it in the low-hour and zero-hour contracts and now there is this utilisation of company law and financial chicanery to engineer the closure of a company at the eleventh hour in a manner that does not facilitate the granting of the most basic entitlements to workers and all those connected to the company. Some of the staff have given 40 years of dedicated service and they deserve better than this.

We are witnessing probably the worst example of vulture capitalism. Will the Taoiseach consider whether a fundamental review of our legislation is needed, in respect of both industrial relations and company law, to ensure this type of activity cannot continue? It would send a message to employers and employer organisations that we live in a society and that society demands basic respect and decency for workers. That is increasingly absent in how some employers are treating their workers. The State must intervene if it continues. The most effective intervention is legislative. Will the Taoiseach agree to review both company law and industrial relations law to ensure this type of behaviour cannot continue?

The Taoiseach

I respect how Deputy Martin has raised this. The treatment of workers at Clerys, an institution for people from all over the country for over a century, was grossly insensitive and appalling. When I first heard the news, given the fact that we are making preparations for the centenary commemorations of 1916, which the Clerys building survived, and that the statue of Jim Larkin, famous for the Lock-out, is across the street, I thought it appallingly insensitive to people such as John Finn, who worked for 43 years in Clerys. He epitomised the shock and devastation that workers felt.

The Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Nash, has met with the liquidator to discuss the issues. The Department of Social Protection has assembled a team to meet with and advise workers about entitlements, jobseeker's payments, secondary payments such as rent supplement and future options in respect of alternative employment, training and education. Arrangements have been made with the Services Industrial Professional and Technical Union, SIPTU, to use Liberty Hall as a venue to meet with workers tomorrow, Wednesday, 17 June. The intention is that the meeting will provide information to all workers, including those employed by concession holders. Obviously, there are claims from concession holders for payments and the release of stock and its value due to them. The precise format of the meeting is yet to be finalised as workers might be involved at other meetings at Liberty Hall, but it is likely to involve the Department's team being available for referral for individuals or small groups on the day, rather than a large presentation. That facilitates better information being imparted to the workers.

A representative of the liquidator has verbally advised the Department of Social Protection that all staff have been made redundant and that P45s will issue this week. It is possible that a small number of staff from the payroll section might be retained in respect of the liquidation. The liquidator will seek payment from the insolvency payments scheme, IPS, on behalf of workers in respect of unpaid wages, accrued but untaken leave and payment in lieu of statutory notice. It is intended that meetings will be held between him and individual workers to determine, on an individual basis, the extent of liabilities. The Department will deal promptly with the individual applications submitted under the IPS by the liquidator. The Department of Social Protection will also ensure that jobseeker claims will not be delayed pending the liquidator resolving individual issues in regard to any leave accrued but not taken. This means that claims in this unfortunate situation can be paid quickly, subject to the usual criteria, and reconciled as required at a future date.

As Deputy Martin will be aware, the Minister of State, Deputy Nash, has met with the liquidator and has advised the liquidator to meet with the workers, as will happen now. The situation in this case has been examined over the years in the context of the legislation that is in place. I do not wish to give commitments I cannot fulfil in respect of changes to legislation, but I agree with the Deputy that in Ireland in 2015 the method and insensitivity with which this was handled is not something one wishes to see.

Deputy Micheál Martin

I take it from the Taoiseach's reply that every effort will be made to fast-track payments to the workers affected and, in particular, their welfare entitlements. In addition, the Taoiseach might comment on the needs of suppliers. Their position is in considerable jeopardy as a result of what happened and the manner in which it happened. We would be willing to co-operate with the Government on this issue in terms of any legislative interventions that would be necessary to prevent a recurrence of this situation. That refers not just to industrial relations legislation but also company law and the manner in which the financial world can create various vehicles and scenarios effectively to absolve companies of fulfilling their moral obligations, as well as their legal obligations, to workers, suppliers and others in situations such as this. This is happening too frequently. There is a growing trend in certain sectors, particularly the retail sector, whereby workers are being consistently undermined in respect of their terms, conditions and pay.

The Oireachtas cannot stand by and facilitate the continuation of this. It needs to send a very strong message. I understand the Minister of State, Deputy Gerald Nash, said he was contemplating a change in legislation. Perhaps the Taoiseach might indicate whether the Government is preparing to examine legislation in this area.

The Taoiseach

I again thank the Deputy. There will be no delay in the processing of payments to workers affected by this outcome. The Department of Social Protection has notified all local offices in Dublin of the arrangements it is making to deal with individual claims or numbers of claims that will arise in any of these offices. The issue will be dealt with as speedily as possible. I thank the Deputy for his offer of co-operation. Obviously, a point was made by the Minister of State about the way the situation had evolved and its outcome. He will prepare a report for the Government on the suitability and efficiency of what is well tried legislation. It is the insensitivity of what has happened that has shocked most people, particularly the location in which it occurred at such short notice for staff. As indicated, Mr. Finn has given 43 years of his life to the establishment which, as the Deputy knows, was the first port of call for thousands of people from all over the country on their visits to Dublin for very many years.

Deputy Gerry Adams

The Taoiseach expressed sympathy for the Clerys workers. I have no doubt that he was sincere enough, but the Government is also partly to blame for their dilemma. We have seen it before. Workers in Waterford Crystal, TalkTalk, La Senza, Lagan Brick, Vita Cortex, Game and others were frustrated in gaining access to basic rights and entitlements. Three years ago the Taoiseach and his partner in government, the Labour Party, rejected Sinn Féin's Protection of Employees (Amendment) Bill 2012 which sought to legislate for the scenarios in question. Had he supported that Bill, what the company did would have been unlawful. What we sought to do in the Bill was enhance the period of notice for workers made redundant and expedite the hearings and processing of claims to entitlements. One of the workers at the rally today asked me why the Government would do this and why it would not support the workers. I was asked why the Labour Party, especially, would not support them. Will the Taoiseach legislate belatedly to protect workers such as those at Clerys? For example, will he extend the period of notice legally required in collective redundancies and impose penalties for non-compliance? Will he provide a time limit within which applications for redress for employees such as those in Clerys will be heard? Will he move beyond the expressions of sympathy and introduce legislation to defend the rights of workers where employers fail to pay money due to them? In this regard, we will support him, although he has refused to support us.

The Taoiseach

I thank the Deputy. As I said to him, a representative of the liquidator has verbally advised the Department of Social Protection that all of the workers involved have been made redundant and that P45s will be issued this week. That is why the Department has notified all of the local offices that claims will be processed speedily and efficiently. When one examines company law, one realises this is obviously a very complex issue and changes should not be made lightly. The Minister of State, Deputy Gerald Nash, will prepare a report for the Government on all of the issues surrounding this matter. Perhaps it might be appropriate for the company law review group to examine what happened and how it evolved. That group is headed by a very capable person. The meetings that will take place in the next short period will bring to light all of the issues that evolved before this insensitive, swift action was taken following the court's decision to appoint a liquidator. The question of company law is one that, in the context of Clerys, could be examined by the company law review group which is headed by Mr. Courtney.

Deputy Gerry Adams

Let me disagree with the Taoiseach profoundly. This is not a very complex issue. It is very straightforward and has to do with workers' rights and industrial relations. The Taoiseach mentioned Mr. John Finn whom I met today. He has worked for Clerys for 43 years and was given half an hour to clear his personal effects from the premises, in which he served loyally for all of those years. The Taoiseach also mentioned James Larkin. The rally today in support of the workers which was attended by Deputy Mary Lou McDonald, other Deputies and I was held just opposite Larkin's statue. The Taoiseach will know that in 1913 Mr. Larkin addressed workers from the balcony of Clerys after they had been locked out in this city. Therefore, this is not a very complex issue. The Clerys workers were locked out. The manner in which they are being treated is appalling and unacceptable. They have families, mortgages, loans and bills to pay, just like everyone else.

Riddle me this: the Boston-based Gordon Brothers Group which sold Clerys to the Natrium consortium has reputedly pocketed €19 million having put less than €2 million into the store. What is complex about this? What is difficult to understand about it? Those concerned have refused even to acknowledge the existence of the Clerys workers or anyone else connected with the company. Does the Taoiseach agree that these workers have rights and entitlements? Obviously, they must be protected, but they are not protected under law and the Taoiseach has to introduce legislation to bring them the money that is due to them. It is their money. Will he pick up the telephone today and talk to Natrium and ask it to have some basic decency and meet the workers' representatives? These workers, like the others I have listed, have been let down not only by the company bosses but also by the Government.

The Taoiseach

The Deputy deliberately misunderstands me. Company law legislation is very complex. The Deputy will be aware of the many hundreds of amendments made to company law Bills during the years. Company law is a complex business.

Deputy Gerry Adams

Workers' rights.

The Taoiseach

The issue is much more straightforward. The company was insolvent. An application was made to the High Court for the appointment of a liquidator and it was approved. The liquidator or personnel on its behalf have said all of the workers are now redundant and that P45s will be issued this week. The workers are protected under redundancy legislation, but the company is completely insolvent. A different issue arises for the concession holders in Clerys, for whom it would have managed the business, taking a fee, with the money being lodged elsewhere. Obviously, claims are in for the return of that money for the past month and the release of stock to the concession holders. In so far as the State is concerned, there is protection for the workers under the redundancy payments scheme which will click in tomorrow. Liberty Hall is being made available to advise workers of their rights and opportunities and the fact that the Department will expedite the payments to be made. The point I am making is that while company law is very complex, the question raised by Deputy Micheál Martin is one that could be considered by the company law review group when the report on all of these issues comes back from the Minister of State with responsibility for business, Deputy Gerald Nash.

Deputy Mick Wallace

Last week we discussed the terms of reference for an inquiry into the State’s alleged preferential treatment of private sector investors in general and our good friend Mr. Denis O’Brien, in particular.

That someone as rich and powerful as Denis O'Brien, who has unfettered control of much of the mainstream media, might get preferential treatment is not much of a shock to many. I do not think he is the only powerful individual or consortium who may have got favourable treatment from State-owned institutions. When NAMA was set up, the plan was that it would not flood the market with stressed assets. This was a special purpose vehicle that would await some form of recovery before maximising the assets in the interests of the taxpayer. That is not what has happened. For some strange reason, NAMA has been in a hurry to fire sale assets for less than their real value despite the fact it is a rising market. We see many of these assets being sold on at massive profits. I named a few of them in here last week. It is frightening how quickly these vulture funds have turned them over and the extent of the profits involved. This means that foreign vulture funds have won and the Irish people are losing out.

Something is the matter with how NAMA has operated. Before the Taoiseach was elected to office, he said that NAMA was a secret society that needed an injection of competence, openness and transparency. He was dead right but everything stayed the same. It did not change. Sadly, the drip-feed of questionable deals has begun. If the Taoiseach does not address this now, it may come back to haunt him in years to come because I believe serious issues are at stake. Will the Taoiseach wait for this to reach a crescendo before he acts or is he prepared to commission an independent inquiry into how NAMA has worked and check whether the people got the maximum return in respect of how the assets were sold by this organisation?

The Taoiseach

The Deputy is well aware that NAMA operates under a very specific remit. It was dealing with the largest property portfolio in the western hemisphere. The Deputy made certain comments here. I point out to him that NAMA also operates under the aegis of the Office of the Comptroller and Auditor General, some of whose personnel serve on the board of NAMA. NAMA appears regularly before the Committee of Public Accounts and the Oireachtas Committee on Finance, Public Expenditure and Reform. If the Deputy has particular cases in mind concerning any deals done or decisions made by NAMA in respect of the disposal of property, he should remember that NAMA's remit is to maximise value and the return for the taxpayer and that personnel from the Office of the Comptroller and Auditor General serve on the board of NAMA and are quite entitled to appear before the independent watchdog in the Oireachtas, namely, the Committee of Public Accounts, as well as the Oireachtas Committee on Finance, Public Expenditure and Reform. If the Deputy has particular cases in mind, he can refer them to the Chairman of the Committee of Public Accounts, Deputy McGuinness. NAMA appears regularly before the Committee of Public Accounts to deal with issues or decisions made by the board about property where its remit is to maximise the return for the taxpayer.

Deputy Mick Wallace

It is interesting that the Taoiseach puts the onus back on me. I will give two examples. An office block on Mount Street was sold off market in 2012 by NAMA to US fund Northwood for €27 million. In 2014, Northwood sold it for €42 million. Most of the money was financed by NAMA in the first place. This is in a country where small and medium-sized businesses cannot get a cent out of financial institutions. NAMA sold the Forum building in the IFSC in 2012 to US private equity firm Atlas Capital for €28 million. Less than two years later, it was sold for €37.8 million, a 35% profit. If the Taoiseach thinks this is good business, I think otherwise. They are just two of the smaller examples. The Taoiseach does not need me to give him details. Many of the details are out there and there is a lot of stuff that is not out there because, as the Taoiseach put it four years ago, NAMA is a secret organisation. Despite the fact that it was brought under freedom of information in April, people are finding it incredibly difficult to get any information out of it.

The sale of large blocks of apartments for less than it cost to build them is one of the reasons the private sector has not resumed building. There will be no serious increase in housing in this country until you build it yourselves. This is directly linked to the housing crisis and deserves investigation. The taxpayer has lost out badly and we are talking about billions. The Taoiseach did not set up NAMA but he can address the problem before it comes back to haunt him in the next term.

The Taoiseach

I recognise that it is an offence under law to make connection with NAMA but I again point out to the Deputy that I am sure that the Office of the Comptroller and Auditor General is utterly independent in the way it does its business. The personnel from the Office of the Comptroller and Auditor General serving on the board of NAMA are there for that purpose. NAMA operates under the aegis of Office of the Comptroller and Auditor General and reports to the independent watchdog in this Oireachtas, the Committee of Public Accounts, and can be invited to appear before the Oireachtas Committee on Finance, Public Expenditure to deal with cases like those referred to by the Deputy. I am not throwing the onus back on the Deputy. I am quite sure the Chairman of the Committee of Public Accounts will take note of what the Deputy has said here.

I do not agree with him that there is no access to finance for small and medium-sized enterprises. There is more access than ever before. The Strategic Banking Corporation of Ireland has set up many opportunities to avail of access to credit that were not there before and this is resulting in many more companies being set up and employment heading in the right direction. I am sure that as an employer, the Deputy knows that.

The changes made by the Central Bank relating to the construction sector mean that builders must now put up 40% of the required funds instead of having 100% loans as applied previously and building on from the profit, resulting in a catastrophic situation, as happened under the previous Administration which brought the country over the cliff. The Minister for Finance has put together a number of opportunities where this matter can be addressed. Everyone understands that the supply side of housing, particularly in the greater Dublin area, is nothing like what it should be despite the fact that 20,000 more people are working in the construction sector. This needs to be greatly enhanced, which is why the Minister for the Environment, Heritage and Local Government was advising local authorities in respect of their strategic development plans that if they made it too restrictive, it would become difficult to provide the quantity of housing that is required. The Central Bank introduced changes for a good reason connected with what happened previously. Access to credit and availability of credit for small and medium-sized enterprises is greater than ever before and is yielding results in terms of increased employment.