Tuesday, 14 July 2020

Ceisteanna (706)

Bríd Smith


706. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection her plans to introduce legislation to deal with situations in which companies or others engage in asset stripping of a firm in order to avoid their responsibility to their workforces, as in a case (details supplied); and if she will make a statement on the matter. [14769/20]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Employment)

Company law matters are the responsibility of the Tánaiste and Minister for Enterprise, Trade and Employment.

As I understand it, the Companies Act 2014 already includes provisions which may be utilised by liquidators or creditors of an insolvent company in appropriate cases. These include section 608, regarding the power of a court to order return of assets which have been improperly transferred; and section 599 where a related company may be required to contribute to debts of a company being wound up.

A range of factors will be involved for liquidators or creditors in deciding whether to pursue litigation based on these provisions of the Companies Act 2014. Such statutory provisions and the associated civil and criminal penalties also provide an important deterrent effect.

Alongside Company Law, companies must also of course comply with other legal requirements including their obligations in respect of the treatment of their employees, creditors and disclosure to and compliance with Revenue requirements.

Notwithstanding the above, the Programme for Government commits to:

- Reviewing the Companies Acts, with a view to addressing the practice of trading entities splitting their operations between trading and property, with the result that the trading business (including the jobs) goes into solvency and the assets are taken out of the original business; and

- Examining the legal provision that pertains to any sale to a connected party, following the insolvency of a company, including the matter of who can object and the allowable grounds of an objection.

I trust this clarifies the matter for the Deputy.