The liquidator of the Debenhams Irish operation KPMG has ruled out on legal grounds ring-fencing the proceeds of the liquidation to boost the redundancy entitlements of around 1,000 workers who lost their jobs after the shops closed. 

Today, Socialist Party TD Mick Barry called for redundancy payments for the workers to be prioritised ahead of all other debts in the liquidation of the department store chain - including monies owed to the government via the Revenue Commissioners and local authorities.

However, a source close to the liquidation told RTÉ that the liquidators do not have the legal power to re-allocate the proceeds of the liquidation away from preferential creditors like the Revenue Commissioners to offer enhanced redundancy terms above statutory entitlements. 

The source stressed that all of the preferential creditors are State bodies, adding: "There are no circumstances in which the assets, even if fully realised, will satisfy the debts owed to the State by Debenhams, which exceed €20 million.

"Unless the State voluntarily instructs the liquidators to allocate supplementary cash to the workers, there is nothing that can be done," the source continued. 

It's understood there are fears this could also herald a fundamental change in insolvency legislation, and set a precedent that could prove costly to the State, which pays statutory redundancy entitlements through the Social Insurance Fund. 

The workers have been officially picketing the company's 11 Irish stores for the past 13 weeks calling for a fair redundancy package.

KPMG liquidators Kieran Wallace and Andrew O'Leary have already acknowledged that the current blockade of the shops is impeding the process of shutting down the chain's Irish operation. 
 
In a recent statement to RTÉ, KPMG stated: "This is stock that legally belongs to the concession holders. The protest action, preventing the retrieval of the assets, is slowing down the liquidation process."

KPMG stresses that the decision to cease trading at Debenhams Retail Ireland Ltd (DRIL) and to move to liquidation on 9 April resulted from the appointment of an Administrator to the UK parent company, which was insolvent. 

This led to the withdrawal of the funding support provided by the Debenhams group to the Irish business - adding without that support, the Irish operation was no longer viable. 

KPMG stresses that this happened because the parent company is insolvent - a situation "entirely different" from the Clerys liquidation five years ago. 

"It is important to note too that DRIL had been in difficulties for a number of years, and having already exited an Examinership process in 2016, it continued to struggle, with significant losses," the statement continues. 

However, Socialist Party TD Mick Barry insisted that boosting the Debenhams workers' "entitlement" to four weeks pay per year of service under a pre-existing collective agreement should take precedence over other debts owed by DRIL - even if those debts were to the State and the taxpayer.

Statutory redundancy, which the workers are set to receive, is set at two weeks per year of service capped at €600 per week - but increasing that to four weeks would add €13 million to the cost of redundancy.

Mr Barry also said that the planned July 'retail stimulus' should include direct government investment in safeguarding retail jobs by nationalising major outlets that were shedding jobs, and also called for tougher legislation to strengthen workers' rights. 
 
The Solidarity & Socialist Party TD for Cork North Central said: "If the blockades can be maintained and extended by the workers and their supporters, the only option remaining for the liquidator and concessionaires is court injunctions which should be the cue for a major political and industrial escalation."

Mandate General Secretary John Douglas said the former Debenhams staff were as determined as ever to achieve a resolution to the dispute - and would continue their pickets as they demand that the Government passes new legislation to ensure that no more workers have to go through a similar situation. 

He called again on the UK parent company to "...do the right thing and pay these workers what they're owed".