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Deficiencies in legislation clear to all but Government with regards to the tactical insolvency of Clerys-Tóibín

7 July, 2015

Sinn Féin TD Peadar Tóibín today slammed a report prepared for government by Labour’s Junior Minister Ged Nash on the sale and liquidation of Clerys. Deputy Tóibín described the Junior Ministers statement that he finds no deficiencies in the legislative framework following the stores closure as astounding, and runs contradictory to the sequence of events detailed in the report.

The Sinn Féin Jobs Spokesperson said:

“Ged Nash may be publically wringing his hands at the refusal of Clerys new owners to meet with him but judging by what’s in his report he would have little to discuss with them anyway. 

“If the Junior Minister really wanted to meet with Natrium he knows where their office is. The truth of the matter is it suits both the government and the new owners, as they see it, to carefully avoid each other.

“Ged Nash in his opening pitch to government states that he does not express the view that there are deficiencies in the legislative framework. 

“Yet the sequence of events as set out by the Minister in his report illustrate clearly that the closure of Clerys was a tactical insolvency, and that the former owners Gordon Brothers had indeed engaged in a property play.”

He went on to say:

 “The Minister makes specific reference to Section 224 of the Companies Act 2014 boasting that it imposes a duty on directors in relation to company employees.

“You don’t have to be legal expert to note how woefully inadequate this provision is. It merely states that directors of a company are to have regard in the performance of their functions to include the interests of the employees in general.

“This watery provision offers no real protection to employees in cases of tactical insolvencies, and that is why I introduced legislation earlier this year to amend Section 224 of the 2014 Companies Act that would in effect pierce the corporate veil and ensure Directors would have a meaningful duty of care to their employees.

“Ged Nash goes on to list out a plethora of employment and company legislation that supposedly provides for a wealth of protections for Clerys former employees yet none actually apply to their case. 
“What has happened with Clerys was always going to happen once Gordon Brothers bought the company in 2012 and separated the assets of the trading company and the property. Their own auditors gave a qualified opinion to the company’s accounts prior to the sale, and Natrium never had any interest in purchase of Clerys as a going concern.

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