Protection of Employees (Collective Redundancies) Bill 2017: Second Stage [Private Members]

I move: "That the Bill be now read a Second Time."

I welcome the opportunity to move this Bill on Second Stage. Picture the scene. It is June 2015. Clerys is broken into two companies; one is the operations company that employs the workers and the other is an assets company. The assets are transferred from the operations company 24 hours before it is liquidated. Workers are left high and dry and the owner of the company sells the assets and pockets the takings. Meanwhile, the taxpayer foots the bill as workers' entitlements are paid from the insolvency fund. Welcome to Ireland and the world of tactical insolvencies.

This has happened in the past. Clerys was the most high-profile case and captured the imagination of the public. Obviously people were sympathetic to the workers who lost their jobs and were left high and dry but, unfortunately, it was not the only time that this has happened. Party leaders, quite rightly, queued up to offer sympathy but we have to go beyond what has been described in the past as "tea and sympathy" and do something about the situation. Tonight, we have an opportunity to support this Bill and to make sure that another situation like that of Clerys does not arise again in this State.

The purpose of this Bill is to provide for protections for employees in situations of collective redundancy in which the employer is insolvent. We have seen far too many cases over the years in which companies have used the courts to engage in tactical liquidation to avoid paying their debts to their employees and creditors. The cost of this is ultimately borne by the State. In effect, such tactical insolvencies are fraud and amount to theft - the theft of workers' pay and pensions, the theft of goods and services from other companies and the theft of revenue from the State. At present, all of this is perfectly legal but, of course, we know it is wrong and consequently there is a responsibility on Deputies as legislators to fix this problem. I hope that no Deputy here would purposely allow the continuation of the present loopholes which allow for fraud against ordinary working people and struggling contractors. I sincerely hope that no Deputy here would allow workers to be left with wages unpaid and contractors left with unmet invoices because of the ruthless actions of a selfish few - and it is only a selfish few. The vast majority of employers are decent and would not engage in the type of practices that we saw in the case of Clerys.

I respectfully call on all parties to support this Bill. I specifically call on the Government and Fianna Fáil to support it. Very often we have moved Bills in this House and the Government has critiqued elements of them. We have no difficulty with that. Committee Stage is the place to work out any difficulties the Minister or Fianna Fáil may have with the Bill, but let there be no doubt about it; doing nothing is not an option. Telling us we must wait is not an option. We need to rectify this situation and we need to do it quickly.

The Bill has the support of the Mandate trade union, Unite the Union, the Communication Workers Union and the Financial Services Union. Moreover, the Irish Congress of Trade Unions has consistently called for action on this issue. It perceived it as one of its main priorities and before the last general election lobbied all parties to do something about this issue. These are all private sector unions and they are the unions that must deal with the mess which is continuously created by this loophole.

The impetus for this Bill lies with the 2016 Duffy-Cahill report and I will give some background to the circumstances that led to it. On 12 June 2015 - two years and two weeks ago - the 130-strong workforce of Clerys was sacked without notice and another 330 workers employed by the store’s concession outlets were locked out of their jobs and left facing an equally uncertain future. Clerys was bought by Natrium some time between midnight and 1.15 a.m. on that day and was declared insolvent that afternoon. The workers did not receive any notice. Many of them heard about their job losses through social media or phone calls from friends. They did not receive the statutory redundancy lump sum from the new owners and nor were they paid moneys owed in lieu of redundancy and holiday pay. The obligation to pay for workers' entitlements was left on the State. The company made millions from transferring its assets to a different company. It sold the assets and was away on its toes while the workers were left high and dry and the taxpayer was left to foot the bill.

I do not believe the Minister would stand over that. The then Taoiseach, Deputy Enda Kenny, did not. He quite rightly said this must be dealt with and showed solidarity with the workers of Clerys at that time. I wish to put on the record that I accept he showed solidarity.

Six months later, on 4 January 2016 the then Minister for Jobs, Enterprise and Innovation, Deputy Bruton, and the then Minister of State with responsibility for business and employment, Senator Ged Nash, commissioned a twin-track examination of protections in law for employees with a particular focus on ways of ensuring that the laws surrounding limited liability and corporate restructuring were not used again to avoid a company’s obligations to its employees. The task was given to Ms Nessa Cahill and Mr. Kevin Duffy and they presented their findings on 26 April 2016. They found that:

All of those employees [at Clerys], most of whom had accrued significant service, were made redundant when the company by which they were employed became insolvent and was placed in liquidation. They were dismissed without notice and ... the employer did not engage in the type of consultation with their representatives [that one would expect], in this case their trade union, envisaged by the Protection of Employment Acts 1977 to 2014.

Those Acts then did not apply. They also found "The employer did not pay the statutory redundancy lump sums to which they were entitled under the Redundancy Payments Acts 1967 to 2014 ... nor did they receive payment from the employer of other amounts due to them arising from their employment, such as payment in lieu of notice and compensation in respect of accrued holidays."

Companies, unfortunately, go out of business and in the majority of cases the employers use the established mechanisms to do right by their employees. It is important that we acknowledge when companies do right because, as I have said, the vast majority do. In this case, the Clerys insolvency was preceded by a company restructuring, which involved a separation into two different entities of the principal property asset and the operations of the business.

That was done solely to deprive workers of their entitlement and to allow the company to make huge profits while at the same time liquidating. It was asset stripping a company. It liquidated it, made the workers redundant and bagged all the profits. When the operating entity subsequently became insolvent and went into liquidation, the employees lost their employment without warning or notice and, as an apparent result of the transfer of this asset, the moneys owing to the employees were not paid.

The Protection of Employees (Collective Redundancies) Bill 2016 will provide legislative support for workers to ensure this does not happen again. The main recommendations in the Duffy-Cahill report underpin the Bill. It will provide protection for employees in collective redundancy cases where the employer is insolvent. It will give power to the High Court to return assets which have been improperly transferred and give preferential status to employees. The Bill simply allows the High Court to adjudicate on these matters. If the High Court determines that what happened in Clerys were to happen again where assets were transferred purely for the purpose of a tactical insolvency it could then order the assets to be transferred back to the principal company or the liquidator to ensure that workers were paid. I cannot see how any reasonable person could oppose such a measure. The mandate given to Ms Cahill and Mr. Duffy was to focus on ways of ensuring that limited liability and corporate restructuring are not used to avoid a company’s obligations to its employees.

The Bill also provides for a 30-day consultation period where it is known that the company's liabilities are such that they will trigger redundancies. The Minister will also remember the case of TalkTalk in Waterford and many cases over the years where workers were not given proper notice. Many of these workers found out through social media their jobs were lost. Workers need protections in law to ensure they are given proper notice and that proper consultation takes place with the trade unions and the worker representatives. Of course, this does not always happen. The Bill rights that wrong by balancing the rights of the employee and the rights of the employer. It is only in cases where the High Court deems a fraud to have occurred that it will require the assets to be returned to the liquidator for disbursal among the employer's creditors, including the former workforce.

The Bill also provides for a 30-day consultation period between those in control of a company and the employees where the owners believe that the company is on an irreversible road to closure. Failure to comply with the obligations of this Act will lead to a fine of up to €5,000. I believe this to be a reasonable penalty and again all decisions relating to such matters lie with the High Court. It is in the hands of the court to decide the rights of the case and again I find it hard to see how anyone could object to that.

The past ten years have seen a sustained attack on the living standards of hundreds of thousands of families across the State. The funding for key public services was slashed and the State’s industrial relations architecture was weakened to favour unscrupulous employers. The end result was a dramatic loss in pay and conditions for many workers. The establishment parties, including the Minister's, not only failed to protect workers, but consciously and deliberately introduced policies which increased levels of deprivation, inequality and in-work poverty.

These policies were bad for workers, bad for the economy and bad for society. A society that builds an economy on low pay, precarious working conditions or any abuse of workers is not a society worth supporting. We saw workers denied their rights and forced to engage in strikes and sit-in protests. Ordinary working people in companies such as Waterford Crystal, Vita Cortex, TalkTalk, Lagan Brick and Game found that when they lost their jobs the law was not there to protect them. Unscrupulous employers were simply allowed to do what they wanted and people shrugged their shoulders and said, "Well, that is just the way it is." Worse, in some cases tea and sympathy is offered and we have statements in the Dáil where everybody queues up to say how terrible it is but nobody is prepared to do anything about it - certainly not those in the establishment parties.

The previous Government established the Duffy-Cahill commission. It looked at the issue in a considered way and made recommendations. We have taken those recommendations, consulted with legal people and produced the Bill in the best interests of working people to ensure workers like the Clerys workers never again lose their jobs. The Bill will also prevent companies from asset stripping and moving the assets to keep them outside the purview of the liquidator and workers, walk away with all the money, sell the assets and deprive workers of their entitlements. It is morally wrong. At the moment it is not legislatively wrong, but we can put that right here today. All of us, Fianna Fáil, Fine Gael, Sinn Féin, Independents and all the other parties can do that here today if we so choose.

I do not know what the Government's position or Fianna Fáil's position on the Bill is. History has told me that when we have moved Bills on workers' rights they have not looked at them favourably in the past. I appeal to the Minister on this. We have supported many Government Bills where we believed the purpose and intent of the Bill was to do the right thing. We understand that even if we have concerns and if our support has caveats, they can be dealt with on Committee Stage. I appeal to the Government and other parties to support the Bill. Let us send a collective loud message from the Oireachtas that we will not tolerate tactical insolvencies, abuse of workers' rights or what happened with Clerys, where workers were left high and dry with unscrupulous employers behaving as they did in that case.

My appeal to the Government and to Fianna Fáil to support the Bill is genuine. I hope they both do so.

The Bill provides a welcome opportunity to discuss the protection of employees in cases where collective redundancies occur due to a company being insolvent. As the Deputy has outlined, the Bill is well-intentioned and is about protecting workers. It is a response to the Duffy-Cahill report on the examination and review of laws on the protection of employee interests when assets are separated from the operating entity. That report was commissioned by the previous Government as part of the Government’s response to the closure of Clerys department store in 2015.

The Government supports the broad principles of the Bill. It is well intentioned and in line with proposals being developed in my Department in response to the Duffy-Cahill report. The Bill represents part of the response required and I will point out certain issues to the Deputy where it contains some flaws and drafting errors. It is a very important Bill in the protection of employees.

The Bill deals with only two of the six proposals set out in the Duffy-Cahill report. The Bill should proceed to pre-legislative scrutiny by the relevant Oireachtas joint committee - I am sure the Deputy will not object to that - to allow for a detailed examination and a comprehensive public consultation with employer and employee representatives and other interested stakeholders, in particular the Minister for Social Protection, soon to become Minister for employment and social protection.

We are all well aware that collective redundancies can occur for many reasons and in many different circumstances. However, when they occur in the manner in which they occurred when Clerys department store closed on Friday, 12 June 2015, the impact can be devastating. The manner in which the Clerys workers were treated was shocking. What occurred was an appalling way to treat workers.

Before I address the specifics of this Private Members' Bill, I remind the House of the steps taken by Government in response to the closure of Clerys and will update Deputies on developments. In the immediate aftermath of the sudden closure, a report was prepared for Government and published in July 2015. Entitlements of workers affected were expedited through the Department of Social Protection system.

Information on employment rights was also provided to the workers concerned in a speedy and effective way.

In January 2016, the then Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and the Minister of State with responsibility for business and employment, now Senator Ged Nash, commissioned Nessa Cahill, a company law specialist, and Kevin Duffy, the then chairman of the Labour Court, to conduct an expert examination of legal protections for workers with a particular focus on ways to ensure that limited liability and corporate restructuring are not used to avoid a company's obligations to its employees. The Duffy-Cahill report was published on 26 April 2016, following submission to the Government. My Department conducted a public consultation on the report, the responses to which contained divergent views. We also asked the Company Law Review Group, CLRG, to examine legislation with a view to recommending ways company law could be amended to better safeguard employees and creditors. I am pleased to say the work in that regard is at an advanced stage and we should receive the report very shortly. That will be most helpful in terms of the future development of the legislation in this area.

Inspectors from the Workplace Relations Commission, WRC, are conducting an investigation, as authorised officers of the Minister, of the collective redundancies that took place in OCS Operations Limited, the trading company which was the employer of the staff of Clerys, on 12 June 2015. The work of the authorised officers relates to the application of the Protection of Employment Act 1977 to the collective redundancies in question. The 1977 Act imposes a number of obligations on employers who are contemplating collective redundancies, including an obligation to engage in a 30-day consultation period with employees and an obligation to notify the Minister for Jobs, Enterprise and Innovation of proposed redundancies. It provides that collective redundancies should not take effect before the 30-day consultation period has expired but it does contain an exemption for companies wound up due to bankruptcy or insolvency.

The authorised officers' investigation began in April 2016. The investigation has been and continues to be subject to legal challenges. A legal challenge was taken by two of the parties from whom information was sought by the authorised officers. In October 2016, the High Court ruled comprehensively in favour of the authorised officers. An appeal was made and that appeal remains before the Court of Appeal. The investigation by the authorised officers is continuing. Prosecutions have been initiated and are pending before the District Court. I will not comment any further on the investigation but I wished to give the House an update on how it is progressing.

Returning to the Bill, it seeks to address in particular the 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. That goes some way to addressing two of the recommendations contained in the Duffy-Cahill report.

I wish to point out some problems and shortcomings in the Bill in areas that need to be addressed. First, the other four recommendations in the Duffy-Cahill report need to be addressed. One of the points in the Duffy-Cahill report was that no one proposal alone would provide the answers sought and that the proposals need to be considered in light of the existing provisions of employment and company law. The recommendations are interlinked and that is something that needs to be addressed.

Proposal No. 1 seeks to address the central complaint articulated by the unions representing the former Clerys employees about the peremptory manner of their dismissal. Currently, section 14(3) of the Protection of Employment Act 1977 allows an exemption to the requirement to give 30 days notice of redundancies in circumstances of insolvency and Duffy Cahill recommended that this exemption be removed. Proposal No. 1 aims to ensure that employees will have the opportunity to consult with their employer for a period of not less than 30 days before any collective redundancy can take effect, whether the employer is insolvent or not. That is something we would all like to see. Any dismissals in contravention of the legislation would be treated as a legal nullity. Certain issues and consequences of this proposal are also addressed, including the consequences of non-compliance with the consultation requirement and ramifications for directors under the Companies Act 2014. That proposal is fairly fundamental in terms of a response to the Duffy-Cahill report and it is not in the Bill. Those other recommendations would need to be considered.

Some of the provisions and recommendations made by Deputy Cullinane deviate from the Duffy-Cahill recommendations. For example, section 2 of the Bill provides for power of the court to return assets which have been improperly transferred. The provision does seeks to implement proposal No. 4 of the Duffy-Cahill report but the proposal to allow a trade union or employee representative make such an application is not recommended in the report. Duffy-Cahill recommends only that the Minister or the liquidator, on delegated authority from the Minister, should be empowered to make such application. That is clearly a point for further discussion and debate.

Section 2 does not provide a definition of employee representative. That is something that would need to be done. Section 2(1)(b) refers to "any property of the company of any kind whatsoever...". However, the language is different from the Duffy Cahill recommendation, which refers to "an asset of significant value". The term was used in the terms of reference for the Duffy-Cahill examination against the backdrop of the Clerys closure, where the ownership of the Clerys building was separated out from the company which employed the Clerys workers. The building was clearly an asset of significant value. However, this Bill's use of the term "any property of the company of any kind whatsoever..." gives rise to a considerably broader approach to the definition of an asset. The wording appears to be taken from company law and care is required to ensure that such use of company law terms in the employment law context does not lead to unintended consequences. There is inconsistency in the Bill. For example, section 7 refers to "an asset of significant value", while section 2 uses the broader term "any property of the company of any kind whatsoever...".

I note that the Bill seeks to provide a range of additional powers to the Minister for Social Protection, including the power, as creditor of an insolvent company, to delegate the bringing of applications for asset recovery to the liquidator and to provide funding for that purpose. The financial and administrative costs associated with such an application could be substantial. Whether these costs could be recouped from the Social Insurance Fund requires further analysis and consideration before any decisions are made on implementing this proposal.

A robust public consultation with stakeholders is required in order to get their views. That would be important. We must also take into account the work of the Company Law Review Group on the issue which will be available shortly. Those are important difficulties.

The intention of section 3(1) appears to be in line with the Duffy-Cahill report's proposals, but section 3(2) seeks to change the priority status of creditors. The implications of that provision for the status of other creditors require careful consideration. There are concerns that the preferential rights proposed for employees are too broadly defined in this Bill and, as drafted, it effectively gives a lien on the assets of a business to the employees. I can see where Deputy Cullinane is coming from on this, but there might well be constitutional and property issues that would need to be teased out and considered in terms of the approach taken by him.

The Duffy-Cahill report did not express a view on whether employees should be entitled to priority over other preferential creditors with regard to the distribution of an asset or its value in circumstances where the court has ordered that an asset be restored to the employer. It should also be noted that section 10 of the 1984 Insolvency Act contains references to provisions in the Bankruptcy Act and the Companies Act that purport to provide protections for the Minister for Social Protection in certain circumstances. In addition, the Redundancy Payment Act gives priority to redundancy payments in certain situations. Those are areas that could be teased out in pre-legislative scrutiny.

The Minister for employment and social protection has also expressed reservations about this issue, in particular, that it could have a negative impact on the repayment of employer debts to the Social Insurance Fund and that is an area that needs to be considered. Work is at an advanced stage in the Department on a policy response to the Duffy-Cahill report. A public consultation resulted in a wide range of views and those have been given careful consideration. The Department's proposed policy response consists of a more comprehensive response than that presented in this Bill. I have no doubt Deputy Cullinane will take that into account when it is available, and it should be taken into account when we are considering the legislative process in this area and also the work of the Company Law Review Group.

The Government will not oppose the Bill as it is based on worthwhile objectives that attempt to increase protection for workers in situations similar to the Clerys case. However, because it deals with complex areas of employment law and company law and the interface of both codes, and because of the various issues I have pointed out the Bill would benefit from pre-legislative scrutiny where those issues could be considered and we could take further account of the analysis and recommendations contained in the Duffy-Cahill report, look at the submissions to the Department and the policy response on which the Department has been working.

We want to ensure that we have that comprehensive response to the Duffy-Cahill report and we do not want to see any unintended consequences coming from the Bill, in respect of the issues I have pointed out during my contribution. We need to correct some of the issues that are there.

I repeat that the Government does not intend to oppose the Bill and I commend on Deputy Cullinane on the work he has done on the Bill.

I now call on Deputy Clare Daly.

I enjoyed that; I apologise to Deputy Niall Collins.

On Thursday evenings, I invite Deputies in the order in which they indicated. It is no different this evening.

I got caught by that before.

There are no party priorities anymore in this session sadly-----

Just on Thursdays.

Only on Thursday and we will enjoy it. In deference to the hour and to poor Deputy Niall Collins who has-----

Is Deputy Daly giving way to Deputy Collins?

I certainly am not. Deputy Collins is probably out of Limerick longer than he feels he should be, so I will try to be brief. That is the best I will do.

I am in some ways torn. I am delighted the Bill is going to pass Second Stage and I very much welcome that the Government will not oppose it. I hope this will be followed up by a quick progress into pre-legislative scrutiny and that this will not be disrupted by a money message or whatever. While this is very positive it is disappointing that the debate is taking place in the midnight slot, so to speak. That is nobody's fault but it does take away from some of the value. It is an important Bill and I welcome that Deputy Cullinane has brought it before the House. I acknowledge this is the third Bill relating to issues of workers' rights brought by Deputy Cullinane in the lifetime of this Dáil. Without patronising, I believe this is a good thing. I hope it will continue because it was notable that in the earlier discussion on FEMPI that the so-called champions of workers' rights, the Labour Party, did not even bother to show up for the debate. I hope that Sinn Féin is more true to the mantle and I am glad it is taking up such legislation so well.

That is a nice compliment for them.

I think they are brighter, will learn the lessons and will not repeat the mistake.

We will keep an eye on them.

This is very good legislation. There is something incredibly sad about the fact it has become necessary as a result of the many cases that have arisen regularly, where workers have been victims of tactical insolvencies throughout the State. We should call them victims because they are victims. The most famous case has been Clerys. The conduct of that employer shocked everybody. Even people who would not normally be affected by these situations were deeply affected by what happened there. If any good can come out of that terrible event, I hope it will be in the passage of this legislation and Members owning up to our responsibilities to make sure it does not happen again.

I am glad the Government will not block the Bill. It is interesting that the new Taoiseach spent a considerable amount of time and energy attempting to deal with welfare rogues. As we know, it turned out there was only one example of a welfare fraud case this year. It is fair and relevant that we would concentrate on corporate rogues who consciously rip off workers and the taxpayers. In that sense, the Bill absolutely seeks to do this.

It also is important to say the need for a Bill such as this has arisen because of real cases where employers have behaved in a cynical way to asset strip companies, to hide assets and to wind down companies leaving their workers without redundancy entitlements. This behaviour is premeditated and acts to deny legitimate, legal and statutory entitlements to the employees. As Deputies have pointed out however, these actions often have a knock-on consequence to the rest of society such as the cost to the Exchequer of social welfare provision and so on.

Obviously, when workers face problems and employers threaten their working conditions, it is an incredibly stressful time. I spent all of my working life as a shop steward but thankfully I have only ever had to deal with cases of voluntary redundancies, which of themselves were quite stressful. They were, however, nothing like the stress that comes from a forced redundancy situation or a liquidation. The loss of a job is traumatic. On top of this, if people are cheated out of wages they have worked for, out of redundancy payments they are legally entitled to, it will really rub the salt in to the wounds. For a person to have such a scenario foisted on them and to see his or her employer - in cases of a profitable employer - getting away with that behaviour is absolutely disgraceful. At the end of the day, companies such as Clerys should be reminded that a lot of their success is due to the contribution of their workforce. Employers need to be reminded that workers are also customers. This should also be borne in mind.

I welcome that the Bill makes a genuine attempt to prevent this type of behaviour from happening by giving powers to the courts to return the transferred assets into the hands of the liquidator, essentially making the employee the preferential creditor and thereby putting employees first in the queue. I believe that employees should be first in the queue because the workers in companies are in general the people with the least to fall back on and need it the most. This applies particularly to people who have made their contribution, worked their hours and so on. This is absolutely appropriate.

The Bill also calls for a compulsory consultation period with workers in the event of a winding down of a company. I believe the measure to be a good one, which leans in favour of the worker, but it could go a bit further in favour of the worker. The reference to the consultation period should specifically mention and recognise the role of workers' representation through their trade unions. We must be honest about this. In cases of tactical insolvencies - that generally happen in smaller companies - even where there is a consultation period, the dynamic between workers and the employer can be very imbalanced and problematic, in particular when workers are young or inexperienced. In this case, the role of the union representative is of powerful assistance - despite the fact that many unions have strayed with regard to their combative approach to defending workers' rights. Nonetheless, this is necessary and we need to move to rebuild it.

It is telling that money cases, or money cases involving employers and businesses, can go to the High Court but when it comes to workers' rights, employees must settle for the Workplace Relations Commission, WRC, and the Labour Court. While I understand that those organisations are put forward as making the courts more accessible for workers, it is problematic that the findings of the WRC and the Labour Court are not binding. Employers have hidden behind this. Even when workers win their cases, those bodies do not have the powers to take back the money or to ensure the judgment is enforced. This is what the Bill is about.

I am delighted the Bill was brought forward and I genuinely congratulate Deputy Cullinane and his office, not just for this Bill, but also for a series of Bills aimed at protecting workers. It is very good but there are areas that could be amended on Committee Stage. I look forward to having the opportunity of doing that, hopefully sooner rather than later.

According to Oxfam, the richest 62 people in the world own as much wealth as half of the world's population. In Ireland the gap between rich and poor is increasing with approximately one third of the income located in the top 10% of earners. One in five people are low paid in the State and according to Professor James Wickham of the Think-tank for Action on Social Change, TASC, Ireland was the most unequal society in 2015 among the EU 28 member states in terms of gross income. The share of gross income for the top 1% rose from 9.1% in 2013 to 12% in 2015. The middle 60% of the population has dropped from approximately 52% to 45%. There is shrinkage in the middle and an increase at the top.

The over-concentration of wealth in the hands of a few is, I believe, the biggest problem globally at present. Not only does it rob billions of people of the necessities of life such as decent food, water, education, health care and achieving of potential, it is also one of the most destabilising aspects of modern society. Political upheaval follows economic injustice as sure as night follows day. I have no doubt that the over-concentration of wealth in the hands of the few to the cost of the many is a significant contributory factor to the turbulence we see regarding US politics, Brexit and politics elsewhere. It is not business as usual with regard to wealth and poverty in Ireland. This over-concentration of wealth in the hands of the few is accelerating in the time of this Government and has been facilitated by the Government in the past.

There are a number of drivers behind this yawning gap and they are built on unfair global trade deals, tax injustice and cuts in public services such as health care, housing and education. Key to this is workers' pay and conditions. In the last Government, under Fine Gael and Labour, and with this Government, under Fine Gael and the Independents, we have seen these drivers accelerate. Fine Gael and Labour binned the Sunday premium, which effectively amounted to a pay cut for 200,000 low-paid workers. We also saw the proliferation of internships and low-hour contracts. Insecure and precarious work has become the norm among thousands of families in the State and the human effect is drastic, putting fierce pressure on families unable to pay for very simple things in their lives.

We have also seen the proliferation of bogus self-employment. It is estimated there are at least 20,000 subcontractors in the construction industry who are in bogus self-employment. The number may well be higher. Considering what the Revenue Commissioners indicate should be coming in through taxes and the number of PAYE-registered people in the State, there are serious gaps. Workers should be employed directly as they would receive legal entitlements for the fruits of their labour. With bogus self-employment, workers are forced into subcontracting to allow some contractors shirk their responsibilities, including paying minimum wage, employer pay-related social insurance and illness benefit. There is also an effect on jobseeker's benefit. It is reckoned there were approximately €640 million in unpaid PRSI contributions since 2007 because of bogus self-employment. We brought this up before with the Minister for Finance but he was not interested in looking at it.

There are clearly problems with pay, conditions and zero-hour contracts, which have now become endemic. We have seen very profitable companies involved with the widespread use of short-hour contracts, with employees consequently not knowing what will be their shifts from week to week or what income they will earn. A large proportion of people on low pay are forced to sign on and in-work social protection, such as the family income supplement, is vital for keeping food on the table, but this is, in effect, a Government subsidy to businesses, regardless of their profitability.

Is it right that we have an issue with poverty and low income in this State? There are many people in my county of Meath who currently work 40 hours per week on the minimum wage and who cannot afford the cost of rent, never mind food, heat, health care or anything else. Tactical insolvency is another method by which wealth is transferred from low and middle income earners to the 1%. There are some unscrupulous businesses who separate their assets from their responsibilities. Clerys is the most famous case and the practice literally robs workers. As Deputy Cullinane stated, the Clerys case is not on its own. In County Meath, for example, a company tendered for a State contract. It had decent assets and earnings and it had been trading for a long time. When it delivered the service, it employed new employees under a similarly named company that did not have the same assets, retained earnings or management responsibilities. The company made numerous trips to the Labour Court seeking the reduction of the wages of those workers, and it was successful in doing so. At those points, it could prove to the Labour Court that the company was operating on a shoestring. It separated assets from responsibilities.

Workers are by far the worst hit victims of this practice but the State does not get off lightly either. Where is the €2.5 million of State money used to pick up the Clerys redundancy bill? How many millions of euro are paid on an annual basis from taxpayers to unscrupulous companies that do not pay their own way? Another point to consider is that if we leave this unchecked, companies using tactical insolvencies will have a financial advantage over firms that obey the law. By God it hurts workers more than most but this also hurts the State and puts decent businesses at a disadvantage.

I remember when the Clerys case was unfolding, the Labour Party Minister for tea and sympathy said it would be all okay. In spite of all the talk and platitudes of that Government, we are still in a position where the problem could be repeated today. In the last Dáil I brought forward legislation that would have pierced that corporate veil and prevented those actions but it was refused by the Labour Party and Fine Gael Government. Like so many pieces of workers' rights legislation, Fine Gael refused it and Labour Party Members kept their mouths shut and their heads down.

Today we are discussing legislation from my colleague, Deputy Cullinane, that would close the legal loopholes allowing tactical insolvencies. This Bill would give legislative support to the key recommendations of the Duffy-Cahill report commissioned in the wake of the Clerys closure. It would give power to the High Court to return assets that have been improperly transferred and give preferential credit status to employees. In fairness to Deputy Cullinane and his office colleagues, they have taken a partnership approach to the Bill, sending copies to the different parties and unions. It is a reasonable solution to an unreasonable practice. I call on the Government to be real about this. I note the Minister's words but we have seen platitudes before. Do not do as the Labour Party did in the last Dáil, standing on the streets with the victims of tactical insolvencies to be photographed only to block the necessary legislation in the Dáil.

Fianna Fáil fully supports the general principles in this Bill and will support its passage to the next Stage. We also look forward to carrying out some detailed scrutiny of it when it comes before us on Committee Stage. The Bill puts forward proposals to existing company and employment law in collective redundancy cases, as we saw with Clerys. It would apply where there are suggestions an employer is insolvent and it incorporates some of the suggestions of the Duffy-Cahill report. That Government-commissioned report examined the controversial closure of Clerys in 2015, recommending legislative changes aimed at giving better protection to employees affected by insolvency cases, including tactical insolvencies. The Duffy-Cahill report recommended an amendment to employment legislation to include a mechanism for enhanced redundancy payments while highlighting how "it is not desirable to create a special class of redundant worker with legal rights that go beyond those of the generality of workers who lose their employment in circumstances of redundancy".

The Bill is well-intended but it is vital to ensure all existing employment and company law provisions are fully implemented, tested in the courts and enforced as good regulatory practice. The scrutiny we will undertake on the Bill will surely consider this. The findings of the Duffy-Cahill report, as well as the Company Law Review Group's examination into ways company law can be amended to better safeguard employees and creditors, must be carefully examined by this Oireachtas.

As we know, staff at Clerys were informed on 12 June 2015 that the shop had been sold and would be closing with immediate effect. The way staff were treated by the new owners was appalling and unacceptable, and we should do everything in our power to ensure that can never be allowed to arise again. The fact that staff were not consulted or kept informed of the ongoing negotiations was disgraceful. The Department of Jobs, Enterprise and Innovation and the Workplace Relations Commission are currently involved with a court action seeking to prosecute several entities responsible for the sudden closure of Clerys. It will be interesting to see how these play out and it will surely inform us as legislators about the gaps that exist in the legislation.

OCS Operations, which ran Clerys until 12 June 2015, and Natrium, the consortium which bought Clerys that same day, are facing charges under the Protection of Employment Act 1977. We in Fianna Fáil support the courageous campaign fought by the Clerys workers and welcome the significant compensation package the workers secured from the current owners in March 2017. This followed a deal brokered among the former workers, owners Natrium and Dublin City Council. There are plans for a €150 million redevelopment of the site to include offices, retail outlets and a hotel, and some of the workers will gain access to training to seek re-employment in the new development after due recognition will be given for their former service. There will also be training and employment opportunities in the north-east inner city, and an understanding has been reached on fair working conditions. Most people would agree that what happened at Clerys was completely unacceptable, and most find the use of the law to create a tactical insolvency repugnant. People are right to pressurise us to bring about a situation where it will not happen again.

I wish to give my thanks and appreciation to our friends and colleagues in the trade union movement who wrote to all of us in the Oireachtas on this matter. I received correspondence today from John Douglas of Mandate and from the Unite trade union who made the point that while legislation in the area of company law can often necessarily incur differences of an ideological nature, this is not the case with this Bill. Fianna Fáil does not approach the issue of employment law from any ideology but from the point of view of what is fair, in the public interest and in the interests of employees.

The Bill would enshrine the right to petition the High Court to transfer back assets to the liquidator. This is a very good way of trying to protect what is due to employees, but we need to look at it in detail and amendments may be needed. We may need to look at whether it is wise to transfer assets back to the same liquidator. I would have a question mark over a liquidator who would act in such a way and be part of a tactical insolvency which deprived employees. We are happy to support the Bill.

It is very telling that any serious legislation to deal with what happened in Clerys does not come from the Government but the Opposition. Staff were given 30 minutes' notice to pack up their stuff and leave. Some had worked for 40 years and I used to be employed by Mandate and knew many of them. Clerys sold the company for €1 and the building itself was subsequently sold for €29 million to the Natrium investment group. The State used €2 million in taxpayers' money for statutory redundancy payments to more than 400 workers who were made redundant without any notice.

We should think about the consequences for those workers. They had 40 minutes' notice that they would have no job the following day. Many were my age, or maybe a bit younger in their 40s and 50s, and knew they had no way to pay bills, rent, mortgages or kids' school fees. We should consider the effect on the workers who had given great service to the company, with many of them very committed for decades. We should consider the chaos, the terror and the financial hardship inflicted on them by the actions of the owners. They lost millions in wages and redundancy payments because of a trick by accountants and financial wizards who have gone on to bigger and better things for themselves. The individuals who planned and executed this robbery, this theft, now plan to make a killing with the site and will probably make millions for themselves.

The greed and avarice of the owners and developers, however, are not what is astonishing. What is astonishing is the inaction of the State and the agencies within the State which are supposed to be charged with protecting workers' rights. Two years later we get some effort to deal with that terrible crime, but this is a Private Members' Bill, not a Government proposal. One should compare the response of this State to the protest by the people in Jobstown in 2014 over water charges, when the full force of the State and its agencies swung into action with dawn raids, people handcuffed and millions spent on a trial with a potential maximum sentence of life imprisonment, but here the State's response is that one person is facing three counts of breaking the protection of employment law and impeding a Workplace Relations Commission inspector. Two other executives associated with the 2015 deal, the previous owners of Clerys, OCS Operations Limited, in liquidation, and Natrium Limited which took over the building are facing charges. The charges have been instituted by the Minister for Jobs, Enterprise and Innovation and the WRC. What do they face under existing law? The Redundancy Payments Act states that an employer who fails to initiate consultations under section 9 or fails to comply with section 10 shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding €500. An employer who contravenes section 12 shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding €500, and for failing to co-operate with an authorised officer they shall also be guilty of an offence and liable on summary conviction to a fine of - surprise, surprise - €500. People should not worry, however, because they have a get-out clause. Where an employer is convicted of an offence under section 11 or 14, the employer may plead in mitigation of the penalty that there were substantial reasons related to their business which made it impractical for them to comply with the section under which the offence was committed. Is that strong legislation to protect the livelihoods of 400 workers and their families? My God. To my knowledge, the full force of the State has brought charges that might result in fines of €500. One laptop has been seized but there is no threat of life imprisonment or a substantial fine for the destruction of 460 jobs and livelihoods as a result of financial trickery that will make millions for a tiny few.

We can forget about waiting for this Government to legislate in any meaningful way to protect workers' rights and we can also forget about waiting for the Government to use existing legislation to stop what happened here from happening again. There is no will, no energy and no desire to close off the loopholes or use the law to punish those who knowingly defraud the workforce of its entitlements. Legislation that allegedly protects workers' rights is at best feeble and at worst useless. Like the recent court case involving the boss of Anglo Irish Bank, I will not be holding my breath for this case to deliver justice for the workers in Clerys and for what they have gone through.

I very much welcome this Bill and commend Deputy Cullinane on another Bill that goes some way towards tilting the legal balance in favour of workers in these situations. I welcome the sections that try to stop this type of fraud from happening in the first place and those that try to recover the assets moved to rob workers of their statutory entitlements and of a living.

One section of the Duffy-Cahill report that continues to puzzle me in terms of the State's inaction is the review of the Companies Act 2014. Duffy-Cahill states that the Act did not appear to be in need of amendment but that it appeared to be in need of use. In other words, the Companies Act 2014 could deal with these situations but it is not used. I am unsure if we should seek to amend or strengthen the Companies Act or just use its provisions but, in either case, the political will of the Government to introduce new legislation to protect workers and to properly punish employers who treat them in this way is non-existent. I note the Tánaiste said that this Bill needed amendment to strengthen it in terms of protecting workers and I look forward to the debate at the next Stage when the Tánaiste, if she means what she said, will attempt to amend the Bill.

I again thank Deputy Cullinane for putting the Bill forward. It is very useful and is the type of Bill we should be progressing without further delay.

I thank Deputy Smith. In the course of her contribution, she referred to what she considered to be the feeble nature of Irish company law and she may well be right-----

Irish industrial law.

Irish industrial law. She may well be right in that regard but it is appropriate to acknowledge, having regard to what she said, that all Members subscribe to the basic principle of Irish law whereby any accused is innocent until proven guilty.

I thank Deputy Cullinane and the Members who contributed to this useful discussion. I note that both Sinn Féin speakers referred to establishment parties offering tea and sympathy. That phrase must have been part of their briefing note. In the establishment of the Duffy-Cahill process, which has led to the review the Tánaiste outlined, more was offered than tea and sympathy. No Member has a monopoly on grievances, in particular in the Clerys case, which was appalling not just in terms of the State but, as Deputy Smith outlined, in terms of the 400 plus employees, many of whom had spent their entire working lives in Clerys, which was an institution in this city and country. For country people coming to Dublin, it was recognised as an institution.

As the Tánaiste outlined, the Department has been preparing its own response to the Duffy-Cahill report which was published a little over 12 months ago. Deputy Cullinane's Bill, which is to be welcomed, deals primarily with two of the six recommendations contained in the report. That is one of the reasons further work is required and the Bill will go to the pre-legislative scrutiny stage for consideration by all Members of the Oireachtas and other interested parties.

Deputy Clare Daly said that there had only been one welfare fraudster in the State in the past 12 months. I do not know where she got that statistic but it is not accurate. The Government wants to deal with this issue and the Tánaiste has indicated that will be done.

Deputy Tóibín bemoaned many things. He gave a litany of things that are wrong, some of which I agree with, in terms of Irish employment scenarios that have developed in recent years. In particular, he bemoaned internships. I suspect he and I will never agree on such things but internships have a role in ensuring that people starting out in their working careers have the necessary experience to do so. Almost worldwide that is the case, as it now is in Ireland. I note he gave an impassioned plea that the Government not block the passage of the Bill even though the Tánaiste had already indicated it would not be doing so. Sometimes Members should listen more to each other. However, I do not doubt Deputy Tóibín's intentions.

Deputy Niall Collins pointed out the correspondence from the two unions that all Members have received. There is no real political difficulty or differences between Members of the House. When I was Chairman of the Committee on Budgetary Oversight, I discovered how frequently I agreed with Deputy Boyd Barrett. Members of my own party were appalled at that. Why should they be? The job of Members is to serve those who elect us. Their interests should be at the heart of everything we do. Members may differ on ideological grounds but should not do so on the outcomes for the public.

This has been a useful debate. There are many genuine employers who attempt to do the right thing by their employees and were appalled by what happened in the case of Clerys. Members must remember that, in attempting to strengthen laws in order to address situations such as the one referred to, they must take care to do so in a balanced and proportionate manner that does not have unintended consequences for genuine employers across the country. The Duffy-Cahill report said that any changes proposed would require careful drafting so as to confine their effect to the type of situations they are intended to address and have no broader or unforeseen consequences in either field. All Members know the issues involved are complex, cross-cutting and concern important issues to do with people's livelihoods and ability to earn a living. There are also the issues regarding company law, as outlined by many speakers, and the question of how the codes interact with one another.

The Tánaiste has said that an investigation is being carried out by authorised officers from the Workplace Relations Commission into the collective redundancies in Clerys. It is the job of Members, as legislators, to strengthen the law if there are weaknesses in it, which is what this Bill addresses and I have no problem supporting it. People will face charges before the District Court in relation to the matter discussed. I support that this Bill go to pre-legislative scrutiny.

I commend Deputies Clare Daly, Niall Collins, Tóibín and Bríd Smith, the Tánaiste, Deputy Fitzgerald, and the Minister of State, Deputy Phelan, on their contributions. I thank the Government for not opposing the Bill as well as those who have said they will support it, albeit with the caveat that it be subject to pre-legislative scrutiny. Sinn Féin has no opposition to that. It is prudent, given the complexity of the issues involved, that that be the case and we have no objection to it.

I concur with the Minister of State, Deputy Phelan, that the vast majority of employers in the State act responsibly and were as horrified as Members were when they heard of the tactical insolvency that took place in Clerys. That makes it all the more urgent for action to be taken. Not only did the workers suffer but taxpayers also suffered because they had to pick up the tab, as do companies when situations such as this one emerge.

Deputy Tóibín pointed out that copies of the Bill were sent to the Irish Congress of Trade Unions, all key trade unions, all the party spokespersons and the Independents before First Stage. That was my attempt at new politics. I said that if they agreed with the intent and substance of the Bill, and if they agreed something had to be done, then let us convene a meeting at which the Bill could be discussed, amendments could be put forward collectively and it could then be moved on Second Stage. That did not happen. Sinn Féin, therefore, had no choice but to move the Bill, which it has done. It was fortunate that the Bill was chosen in the lottery and is now being debated.

In that spirit, we have absolutely no objection to it being scrutinised on Committee Stage. In fact, we have a Bill on the issue of if-and-when contracts that is currently in a similar process and is being examined by the Joint Committee on Jobs, Enterprise and Innovation as well. I am assuming that committee will deal with this Bill as well.

Deputy Niall Collins expressed concern about whether the asset might be transferred back to the liquidator responsible for the tactical insolvency. I do not believe that would happen because the liquidator would not trigger a tactical insolvency. Rather, the company itself would do so. The liquidator would come into play when the assets are transferred and then when the operations part of the company is liquidated. That is something which can be teased out.

The Government made a number of interesting observations with which I agree and the Bill would be strengthened if they were taken on board. The Minister said that she could see that section 2 of the Bill sought to implement proposal 4 of the Duffy-Cahill report. The proposal is to allow a trade union or employee representative make an application to the High Court, whereas the Duffy-Cahill report recommended only the Minister or the liquidator should do so. Again, this is something that can be debated on Committee Stage. It would be useful and important for a trade union to have that right. The Minister also said that section 2 failed to provide a definition in respect of employee representatives. If there are definitions that need to be added to the Bill, we are more than happy to accept amendments to that effect, and we will draft our own if necessary. There is no objection to that.

The Minister said that section 2(1)(b) refers to any property of the company of any kind whatsoever rather than using the words "an asset of significant value", which is the term in the Duffy-Cahill report. I would not have an objection to an amendment in that regard either. I do not see any reason why that could not be accepted and, again, it is something that can be considered on Committee Stage.

The issue of priority status of creditors arose, where concern was expressed by the Minister to the effect that it was too broadly defined and that it would effectively give a lien on the assets of a business to employees. I agree with that but if it is problematic for certain parties or individuals, it would have to be debated and scrutinised. We would be more than willing to examine those issues as well.

There was an issue concerning proposal one, removing the insolvency exemption from the prohibition on implementing collective redundancies during the consultation period, which is not contained in the Bill. The Minister and the officials would be aware that there is a section of the Bill that does deal with a 30-day consultation period. However, the Duffy-Cahill report dealt with this in detail and a number of recommendations were made. One of the recommendations states, "A further matter that may be addressed as part of the proposed amendment is that an employer could be required to provide certain information to employees and/or their representatives during the consultation period." If there are elements of the Duffy-Cahill report that are not included in our Bill, we would be more than happy to have those included in order to strengthen it.

I welcome the Minister's lack of opposition to the Bill. She stated that the Bill should be referred to the joint committee and subjected to further scrutiny, which I agree with. She then set out the reasons why. The first reason she gave is that account should be taken of the analysis and recommendations contained in the Duffy-Cahill report. That is absolutely right and prudent, and should happen, because of the complex nature of this matter. It was a very detailed report and much work was done on it. It would be very useful if Mr. Duffy and Ms Cahill were witnesses before the committee to assist us with amendments to the Bill. That would add value to the Bill. The second reason given was that account was taken of the Department's public consultation process and submissions made, which are on the Department's website and which I have read. Again, that would strengthen the Bill. Account was taken of work of the company law review group, which the Minister has said will be available shortly. The only caveat I would add is that we have been hearing for a long time that the committee will conclude its work shortly. I hope that the elongated nature of that work and process would not unnecessarily hold up progress on this Bill. Notwithstanding that, there are references in the Duffy-Cahill report to company law, although the authors do put caveats on changes to company law.

The Minister says that the proposed Bill needs to be a balanced and comprehensive response to the Duffy-Cahill report, which is what we all want and is what needs to happen. It is important that the proposed Bill does not give rise to any unintended consequences. All Members, including representatives who are now in government, know that the opposition do not have the experience of teams of people who can give us the technical support that we need when drafting Bills. There may well be unintended consequences. If there are and they need to be ironed out we will absolutely support those amendments, and amendments to any errors in drafting, because it is not our intention to have unintended consequences that would take from the substance of the Bill. No Bill is perfect or without errors, so we are open to making changes.

I hope that over the next number of months we cannot just not oppose this but also do the serious work that needs to be done. We should take the work that the Department, ourselves, Mr. Duffy and Ms Cahill have done and perfect this Bill, and make sure that it is passed as quickly as possible. We must make sure that we are not responsible as legislators for situations where workers are left high and dry because of a tactical insolvency. That would be a failure on our part. We can criticise companies for doing the wrong thing when they do so, but if they are allowed to do it because the law allows them to do it then that is our fault and we have to take responsibility. What we are doing here tonight, I hope, is taking responsibility and taking that first step. Teachta Bríd Smith is right - it should not take the Opposition tabling Bills of this nature in order to force the issue. However, I did not see any evidence of the urgency of this from the Government, notwithstanding some of the work that was done or the point made by the Minister of State, Deputy Phelan, in respect of the report and the group set up to examine the issue. The report was sitting there for a long time and I saw no evidence of any Bill coming from the Government. We now have a Bill which can be amended and perfected and which can make a real difference to workers. I hope that this can happen.

I conclude by commending the Minister of State at the Department of Housing, Planning and Local Government, Deputy Phelan, and the Tánaiste and Minister for Enterprise and Innovation, Deputy Fitzgerald, on their support for the Bill. I also commend the other Deputies who contributed to the debate. I thank the Clerys workers in the Public Gallery because they are the people who were left high and dry and who suffered the consequences of this. It is for them that we do this, and also for future workers who will not face the same consequences as a result of the fact that we in this House will have done our job.

Question put and agreed to.