A Bill that would give preferential creditor status to groups of workers made redundant as a result of the collapse of a company is an attempt to ensure that what happened to Debenhams employees “can never happen again”, the Irish Congress of Trade of Unions (Ictu) will tell a Dáil committee on Wednesday.
Representatives of Ictu and employer’s group the Irish Business and Employers Confederation (Ibec) will discuss the Companies (Protection of Employees’ Rights in Liquidations) Bill 2021 at the Oireachtas Joint Committee on Enterprise, Trade and Employment.
Introduced to the Dáil by Solidarity-People Before Profit TD Mick Barry last year, the so-called Debenhams Bill would, if adopted by the Oireachtas, amend the Companies Act in two ways, Ictu industrial officer Liam Berney will tell the committee.
“First, it seeks to put workers at the head of the queue when it comes to the distribution of money from the liquidation of a business,” he is expected to say. “Second, it seeks to make an unpaid collective redundancy agreement a recognised debt in the eyes of the law and a debt which must be taken into account in the liquidation process.”
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The Bill builds on the findings of barrister Nessa Cahill’s and then-Labour Court chairman Kevin Duffy’s 2016 report on the treatment of employees during the 2012 liquidation of Clerys department store in Dublin in which some 450 Clerys workers lost their jobs. The report’s authors did not express a view on whether employees should be entitled to priority over other preferential creditors, like the Revenue Commissioners. However, it did make a number of recommendations to strengthen the rights of employees in cases of mass redundancies.
“The failure of to implement the recommendations in the Cahill Duffy report meant that the Debenhams management had no legal obligations to their Irish workforce and could simply walk away,” Mr Berney will tell the committee on Wednesday.
Insufficient assets
More than 1,000 Debenhams employees lost their jobs in April 2020 after the UK company collapsed into administration and appointed liquidators to its Irish arm.
After 406 days on the picket line, the former employees, represented by trade union Mandate, agreed to a settlement that centred on a €3 million retraining and upskilling fund to be administered by State agency Solas. The settlement was reached after a report by Labour Court chairman Kevin Foley concluded there were insufficient assets in the Debenhams Ireland operation to meet the costs of honouring redundancy agreements that had been negotiated between the union and company.
“The Bill that we are discussing here today is an attempt to ensure that what happened to the worker in Clerys, Debenhams ... can never happen again and we would urge all political parties to support it,” Mr Berney will tell the committee.
