We previously informed you in a recent blog post of a decision of the Workplace Relations Commission (the “WRC”) to award nearly €120,000 to Clerys staff following the liquidators’ failure to undertake a consultation process with staff, as part of Clerys’ collective redundancy. Following the closure of Clerys, the Minister for Small Business, Ged Nash commissioned a report from Kevin Duffy, Labour Court Chair, and Neasa Cahill, BL. The report aimed to address the interface between employment law and company law and to establish whether the legal protections for employees and unsecured creditors are sufficient. This report is understood to have been finalised recently and will be published following Cabinet approval. As reported in the Irish Times, the authors are believed to have made a number of key recommendations in the draft report, including:
- A mandatory consultation period of 30 days in collective redundancy situations (regardless of whether the company is insolvent or not);
- If this consultation period is not afforded to employees, compensation payable should be increased from four weeks’ pay to two years’ pay; and
- If an employer transfers assets out of the business with the effect of perpetrating a fraud on the employees, there should be a mechanism for recovering the asset or the proceeds of its sale.
We will keep you updated in relation to the publication of this report.
Authors: Niall Hayes and Julie Austin