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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Debenhams insolvency fund

Summary

Deputy Joan Collins returned to the Debenhams dispute, warning that the impasse could exhaust the company’s assets and arguing for a public insolvency fund, citing European examples and tax reliefs for wealthy groups. The Taoiseach said the State already provides statutory redundancy and some safety-net protections, and he would explore what further could be done.

The Debenhams workers organised a meeting last Thursday. Representatives from many political parties, including Fianna Fáil, were at that meeting. The workers were filling us in about the outcome of the Workplace Relations Commission, WRC, negotiations - or non-negotiations, as such. They raised serious issues about what can be done under the legal framework of insolvency. They said that it looks as if the ongoing impasse will mean that the current asset value of the liquidated Debenhams business might be depleted by the end of the year. This will affect not only the workers but also the State, which would potentially forgo many millions of euro due to it as a preferential creditor. It was also explained that the workers had been offered €500,000, down from €1 million.

This dispute is now into its eighth month. The Taoiseach talks about his sympathy for those 1,000 workers but he still does nothing. We are eight months on. The Debenhams workers' union, Mandate, have written to the Taoiseach twice, on 22 October and 2 November, and he has not replied on either occasion. Words and sympathy are all well and good but what the workers want is action. We are now 215 days into this dispute. It is clear that the liquidators, KPMG, are not going to meet the workers' legitimate redundancy claim. The Taoiseach could act. He could move with urgency to establish a public State insolvency fund to deal with the situation faced by the Debenhams workers, a situation that will, most likely, be faced by other workers in the future. It has been faced by workers in the past. The Taoiseach could establish such a fund and make the payment to the Debenhams workers a priority. As I have stated previously, such a fund could be financed by a small increase in employers' PRSI. This could have been included in the recent budget. A figure of €10 million is a modest amount compared with the supports being given to businesses through loans and grants during the Covid crisis. Will the Taoiseach give a commitment to act now? This matter will only be resolved politically, it will not be resolved under the insolvency legislation. The Taoiseach should try to resolve this dispute and protect workers into the future.

It is now 1,715 days - in other words, four years and eight months - since the Duffy Cahill report was issued and still no action has been taken. The Taoiseach promised yet another review but where is it? When the Duffy Cahill report was issued, it was strongly opposed by IBEC. Is that still the position? Is IBEC still opposing it? Is it because of lobbying by employers that no action has been taken on this matter? Perhaps there is a whistleblower out there who might let us know what is really going on.

I had another point to make but I will come back to the Taoiseach on that another time. The Debenhams workers cannot be left out on the picket line for another week, two weeks, three weeks or four weeks. The liquidator is saying it will potentially walk away on 23 December. What will that mean for everybody involved? The Debenhams workers need to be protected and we need political intervention.

Comment on this

I discussed the matter earlier with Deputy Gino Kenny. The situation has never been simple in terms of resolving the dispute since the liquidation occurred, as I have acknowledged and been honest about from the beginning. People may have been given expectations during this dispute that could never be realised. Simplistic solutions were offered which never had any prospect of being realised. The liquidation process, in itself, was never going to replace the legitimate redundancy entitlements of the workers.

The company treated the workers very shabbily. I accept that saying that is not enough for the workers. There has been no lobby by anybody against any resolution of this so let us not create another conspiracy. I have had general discussions with the head of ICTU and I have met workers on this, and there has been ongoing consultations with Ministers. The Mandate trade union has done everything it possibly can and it has not been easy for the union either.

With regard to the fund the Deputy mentioned and the increase in PRSI, that again would have far-reaching consequences as this cost would be on every employer. Whether they are doing well or not in the middle of Covid-19, they would still be charged that.

The more important point on that is that what we are essentially proposing here, if we are to go down that route, is that one would be getting others to bail out the shoddy behaviour of some parties. That is a general point we cannot ignore. Once this is done once, it has been done a second and a third time, and let us be under no illusion that we are creating a precedent then. Whatever mechanism is arrived that, we all better be clear if it has far-reaching consequences and could tip the balance the wrong way. Employers should meet their obligations and the law should be changed to ensure that collective agreements are given higher priority in liquidations. That should certainly happen. I will discuss this with colleagues across Government again with a view to seeing if there is any way we can develop a resolution of this and a way of bringing it to a conclusion.

Comment on this

A public state insolvency fund is a matter of course in European countries so it is not unusual and this proposal is not being plucked from the sky. We have solidarity funds such as the Social Insurance Fund where people contribute through PRSI for the good of all even though they may not get sick. All sorts of reliefs have been brought in for the very wealthy in this country. There was the special assignee relief programme where €28.1 million was forgone in taxes in respect of only 1,000 top executives. The key employee engagement programme was brought in in 2017, which has cost €10 million in tax incentives for top executives. The Government is, therefore, able to bring in certain measures and to bail out the banks. It can bring in guillotined legislation to seal the records of mother and baby homes. When it comes to workers, creative and exceptional measures have to be put in place to deal with them. We should also bring in longer-term practices and amendments to company law and so forth. These workers have to be looked after.

Comment on this

The State provides statutory redundancy and in certain redundancy contexts provides a safety net where employers are either not in a position to pay their redundancies or workers are left with nothing. The State continues to play a strong proactive role in this area. Our systems are as strong as other member states across Europe. We are open to strengthening those. I will engage with the Deputy again and, as I have said, I will talk to other colleagues across Government to see what can be done.

Comment on this