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Employee protection laws reviewed in published expert's report printable version

03 May 2016: posted by the editor - Business, Ireland

Business and employer bodies, trade unions and other interested parties are invited to respond to detailed proposals made in the report in advance of a response to the report being formulated.

Twexperts were appointed by employment Ministers Richard Bruton and Ged Nash texamine and review employee protection legislation in the context of ensuring that limited liability or restructuring are not used tavoid a company's obligations tits employees. Following publication of the report last week, the Ministers briefed cabinet colleagues on the report.

The publication follows the announcement by the Ministers in January of a twin-track approach tthis issue. This approach involved the appointment of twexperts texamine the legal protections for workers and the interface between company and employment law. The examination was tspecifically look 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. In addition, Minister Bruton requested the Company Law Review Group treview company law with a view trecommending ways company law could be potentially amended tensure better safeguards for employees and unsecured creditors.

Mr. Kevin Duffy, Chairperson of the Labour Court, and Ms. Nessa Cahill BL, a company law specialist, were given eight weeks texamine existing legislation and talsconsider new solutions on how tbest protect the interests of workers in such cases. Both Ministers today thanked the twexperts involved for their report and alswish tacknowledge the efficiency and quality of the experts' work, which focused on seeking balanced and pragmatic solutions tthe issues in question.

Minister Bruton said: "We saw with the appalling events at Clerys what can happen when the interface between company law and employment law is exploited in such a way as tcreate consequences never intended by these carefully constructed systems of law. There have alsbeen other recent cases where similar things have happened. That is why we decided task experts ttake a look at these issues and provide recommendations on what could be done tprevent similar situations happening again. I wish tthank Kevin and Nessa for their detailed and prompt work on these issues.”

Minister Nash said: "This is an important piece of work and complements the suite of actions that we have taken since the overnight closure of Clerys in June last year, leaving 460 workers without jobs and without due recognition for years of dedicated service. My priority has always been tdeverything possible tensure a similar situation cannot occur in another company here. I want tthank Kevin Duffy and Nessa Cahill for their work and once again pay tribute tthe Clerys workers who, despite their appalling treatment by the owners, have behaved with dignity and resolve throughout.”

The Ministers welcome any responses from stakeholders including business and employer bodies, trade unions and other interested parties tthe detailed proposals made in the report in advance of a response tthe report being formulated.

The Expert Examination and Review of Laws on the protection of employee interests when assets are separated from the operating entity is available at www.djei.ie/Djei/en/Publications/Publication-files/Duffy-Cahill-Report.pdf

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 temployment law.

Suggested changes tlaw
The focus of the suggested amendments temployment law is tensure that employees will have the opportunity tconsult 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.

Tags: Employee protection law

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