Enterprise minister Richard Bruton (pictured) has announced a twin track examination of protections in law for employees and unsecured creditors, particularly to ensure limited liability or restructuring are not used to avoid a company’s obligations to its employees and unsecured creditors.

Bruton said: “The treatment of the Clerys workers was appalling. There was a terrible lack of respect shown to people who were suddenly losing their jobs after years of service.

“Clerys and a number of other recent cases have shown up the potential consequences that can flow to workers, to taxpayers, to suppliers and other creditors from the exploitation of the interface between company law and employment law in such a way as to create consequences that were never intended by these carefully constructed systems of law.

“While we must be careful not to take rushed steps that might create bad law and further unintended consequences, I believe we have enough information now from the Clerys liquidation to proceed to the next step which we are announcing today.”

Bruton has given Kevin Duffy, chairperson of the Labour Court and barrister Nessa Cahill, a company law specialist, eight weeks to examine existing legislation and to also consider new solutions on how to best protect the interests of workers in such cases.

In Association with

As part of the process, Bruton separately requested that the Company Law Review Group to examine legislation with a view to recommending ways company law could be amended to better safeguard employees and creditors.

Unscrupulous

Ethel Buckley, SIPTU Services Division Organiser, commented: “It is clear that the government has taken on board the representations of the former Clerys workers and their SIPTU representatives regarding the inadequacy of the current legislation. The use of limited liability or restructuring by unscrupulous companies to avoid its obligations to its employees must be ended.

“SIPTU expects that following this review the legislation will be amended to ensure employees can be better protected in such situations. That the current situation cannot be allowed to continue is evident from the overwhelming support provided to the Clerys workers in their campaign for justice.

“The behaviour of Natrium, the new owners of Clerys, which led to over 400 job losses and a cost of over €2 million in redundancy payments being forced upon the state, must not be repeated.”