30th May 2016
The Minister for Jobs, Enterprise and Innovation, Mary Mitchell O’Connor TD, today (Monday) launched a public consultation on the report of Nessa Cahill, B.L., a company law specialist, and Kevin Duffy, Chairman of the Labour Court, of their examination and review of employee protection legislation in the context of ensuring that limited liability or restructuring are not used to avoid a company’s obligations to its employees.
The report was commissioned by the then Minister for Jobs, Enterprise and Innovation and the then Minister for Business and Employment in January, 2016 as part of the Government’s response to the closure of Clerys department store in 2015. The two experts were asked to examine the legal protections for workers and the interface between company and employment law. The examination looked specifically at situations where valuable assets in a company are separated from the operating entity, and how the position of employees can be better protected in such situations.
The report, which was published on 26 April, 2016, provides a comprehensive analysis of the relevant provisions of employment law and company law. It makes a number of proposals for reform of the law, which are intended to improve the protections of workers in situations similar to the circumstances of the closure of Clerys.
Commenting on the report, the Minister said “The manner in which Clerys workers lost their jobs was totally unacceptable. It raised questions as to how the relevant provisions of employment law and company law could be exploited to produce an outcome never intended by the respective codes of law. The experts’ report provides a robust analysis of the relevant laws and makes a number of proposals designed to address the questions raised. My priority now is to get considered responses to the report from interested parties with a view to bringing forward a response to the report for consideration by Government.”
Submissions should be made by close of business on Friday 17th June either by email to the following address: firstname.lastname@example.org
Or in writing to the following address:
Employment Rights Policy Unit
Department of Jobs, Enterprise and Innovation
For further information contact:
Press Office, Department of Jobs, Enterprise and Innovation, Ph: 6312200 or email@example.com
NOTES FOR EDITORS
The Public Consultation document Duffy Cahill Report, the Terms of Reference for Expert Examination and the Duffy Cahill (Employment Protection) Report are available at:
Reports and Terms of Reference
The report provides a comprehensive analysis of the relevant provisions of employment law and company law. It makes a number of proposals for reform of the law, which are primarily concerned with amendments to employment law.
Suggested changes to law
The focus of the suggested amendments to employment law is 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 takes effect, including in the following circumstances
•whether the employer is insolvent or not,
•where decisions are being made in relation to an asset of significant value by a person related to the employer, which will lead to collective redundancies.
The experts also propose increased sanctions for failure to respect the 30 day consultation period.
The experts go on to propose a number of other reforms to employment law designed to
•facilitate the recovery of an asset or proceeds of an asset in circumstances where the transfer of the asset had the effect of perpetuating a fraud on the employees,
•prevent the reduction of a company’s assets below the level necessary to discharge accrued liabilities to employees,
•provide a mechanism by which employees could negotiate enhanced redundancy terms in circumstances where the employer entity is separating assets from the operations entity.
The report does not propose any amendments to existing provisions of the Companies Act 2014. However, it does state in clear terms that existing company law provisions provide “substantial weaponry that could be used against directors and related companies to redress the effects of, and deter, harmful transactions” but these provisions are only of weight “if they are employed and seen to be employed”. The report makes proposals designed to facilitate and support the use of those provisions in future cases.
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