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Companies can’t use the corporate veil to side-step employment law – Cullinane

15 June, 2016 - by David Cullinane TD

David Cullinane, Sinn Féin spokesperson for workers’ right, moved a bill today that will tackle the abuse by some company directors of corporate body legislation to evade their responsibilities under employment law.

Deputy Cullinane said:

“Existing company law facilitates unscrupulous employers in building paper walls within entities or creating multiple entities with the specific intent of separating assets and goods from the legal entity that employs the staff. It is not acceptable for us as legislators to simply sit on our hands and speak of principles, as if the existing law is some sort of immovable feast.

“Indeed, many employees found themselves involved in sit-ins for months. People are being pushed into poverty by this issue.

“Employers who adversely use the protection of the corporate veil principle are also undermining the vast majority of decent employers who uphold their responsibilities to their staff, and are adding a cost to the State's already overburdened industrial relations mechanisms.

“Any decent employer in the State who fulfils his or her responsibility to employees will have nothing to fear from this Bill. Such employers will incur no cost from it. This Bill seeks only to chase those who stuff the employees who have worked for them for years.

“There are limited instances in company law in which a director, a shareholder or a financial institution can take an action against another director of a company where he or she is in breach of his or her duty, causing damage to the company. There is no similar provision in employment law to protect workers.

“To date, the Government has failed to put any proposal on the legislative table to deal with abuse of the corporate veil.  

“Sinn Féin is actively working to address this situation.”

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