Minister for Tea and Sympathy Ged Nash must introduce legislation dealing with tactical insolvencies – Tóibín
Sinn Fein’s Jobs Spokesperson Peadar Tóibín today called on Labour’s Minister for Business and Employment Ged Nash to introduce legislation to deal tactical insolvencies, adding that Clerys workers don’t need a report on the actions of their former employer, they need legislative protections.
The Meath West TD said:
“Earlier this year I introduced legislation that sought to include a provision on the Companies Act 2014 to deal with tactical insolvencies that leave employees high and dry.
“Under the government’s legislation, rogue employers and vulture investors are incentivised to pursue exactly the kind of tactical insolvency former Clerys owners, the Gordon Brothers Group, had secured over recent days.
“My own legislation provides for a ‘piercing of the corporate veil’ to hold unscrupulous business owners to account and protect vulnerable workers.
“When used by a businesses the ‘corporate veil’ in effect separates the legal ‘personality’ of a company from its Director’s, thus protecting them from liability of the business’s obligations to its employees in cases of tactical insolvency.
“Sinn Féin’s bill has a particular eye to businesses who shirk their responsibilities to their employees by establishing a number of companies to break the link between assets and employees. This is exactly what has happened in the case of Clerys.
“Gordon Brothers have walked away from the Clerys sale with a profit reportedly worth €15 million yet we are told the very same business does not have enough cash to pay holiday money or redundancies to workers or the €2 million they owe to the concession holders.
“There are limited instances in company law where another Director, shareholder, or a financial institution can take an action against a Director of a company where he or she is in breach of their duty, causing damage to the company. There is no similar provision in employment law to protect workers. Sinn Féin is seeking to rectify this anomaly.
“The Taoiseach tells us that the Company Law Review Group will consider if any changes need to be made to existing legislation to deal with the type of tactical insolvency. Gordon Brothers have clearly availed of using the existing Companies Act introduced under this governments watch.
“Abuse of the corporate veil is not a new phenomenon and to date government Ministers have set their face against dealing with disgraceful practices by companies that have no interest in building productive sustainable enterprises for the long term. The Taoiseach’s wringing of hands on the complications of company law is deeply disappointing and reflects an inertia in this government to take action to protect fundamental rights of employees.
“Junior Labour Minister Ged Nash has been tasked with writing yet another report in the case of Clerys. Workers don’t need reports on well-established rogue practices by unscrupulous employers, they need legislative protections, and they need these protections yesterday.”