A review of the circumstances surrounding the sudden closure of the Clerys department store with the loss of 460 jobs has recommended legislative changes to give better protection to employees.
The Expert Review by Labour Court Chairperson Kevin Duffy and company law expert Nessa Cahill focussed on the implications for company and employment law for cases such as Clerys, where valuable assets are separated from the operating entity of a company.
In that situation, the purchasers - the Natrium consortium fronted by Dublin woman Deirdre Foley - retained the Clerys' building worth millions of euro.
However, because the separate operating company was insolvent, workers only received statutory redundancy - paid for by the taxpayer.
The Review proposes that employment law should be amended to ensure that employees have the opportunity to consult with their employer for 30 days before any collective redundancy takes effect, whether the employer is insolvent or not.
That consultation should apply 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.
Mr Duffy and Ms Cahill also recommend that there should be increased sanctions for failing to respect the 30-day consultation period before implementing redundancies.
They also propose further reforms to employment law 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.
A company should not be allowed to reduce its assets below the level required to discharge accrued liabilities to employees.
The proposed reforms should also provide a mechanism to enable employees to negotiate enhanced redundancy terms in circumstances where the employer is separating assets from the operations entity.
While the report's authors do not propose any amendments to existing provisions of the Companies Act 2014, they say that existing company law provides "substantial weaponry that could be used against directors and related companies to redress the effects of, and deter, harmful transactions."
However, they note that such 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.
Minister for Jobs Enterprise and Innovation Richard Bruton said the events at Clerys had shown what can happen when the interface between company law and employment law is exploited in such a way as to create consequences never intended by these carefully constructed systems of law.
Minister of State for Business and Employment Ged Nash described the report as an important piece of work.
Both ministers have invited responses from interest parties to the report.
SIPTU, which represented many of the Clerys' workers, described the proposals as positive.
SIPTU Services Division Organiser Ethel Buckley said the recommendations would begin the process of ensuring that no one would ever profit again by treating workers in the shameful and underhand manner which the Clerys workers had to endure.
