Tuesday 27 September 2016

Pressure grows for new laws to stop repeat of Clerys closure debacle

Patricia King of ICTU. Photo: Colm Mahady / Fennells
Patricia King of ICTU. Photo: Colm Mahady / Fennells

The new Government is coming under pressure to ensure what happened to the Clerys workers never happens again.

The head of the Irish Congress of Trade Unions, Patricia King, has told a conference that the findings of the recent Duffy Cahill report must now be implemented. She said it would be a fitting tribute to the staff who lost their jobs.

It came as it was reported that the State was taking legal advice over whether it could recoup the cost of paying statutory redundancy to the 460 workers.

Staff at Clerys learned in June of last year that they were to lose their jobs, just hours after the store building was sold.

A liquidator was appointed and staff were entitled only to statutory redundancy.

The report - by Labour Court chairman Kevin Duffy and company law specialist Nessa Cahill - found that there should be increased compensation for workers amounting to two years' pay if a 30-day notice and consultation period wasn't respected.

It also said that workers whose jobs were wiped out without notice should get two years' pay instead.

The recommendations to extend the existing provisions of the Companies Act to give greater protections to workers are designed to prevent what happened to the 460 staff at the iconic Dublin department store from happening again.

The report also noted that while the transaction that led to the Clerys closure was lawful, "it is difficult to avoid the conclusion that it would be preferable if it were not".

Ms King said the Clerys "debacle" was "one of the worst pieces of behaviour".

Embarrassed

During a discussion at the Financial Services Union conference, Ms King said she remembered going over to the Department of Jobs, two days after the Clerys closure, and being greeted by a senior civil servant whom she recalled as saying that he was "very embarrassed" by what had happened.

She said it had been noted at the time that what had happened with Clerys was within the law.

"The importance [of the Duffy Cahill review] is going to be in getting it implemented," Ms King said.

"The tribute to the Clerys workers and the legacy of the Clerys workers will be when we get the law changed to say, 'You can't do that'.

"That will be a very positive, albeit extremely painful, period of time for those workers."

The iconic department store had been owned by OCS, a unit of US-based private equity firm Gordon Brothers.

It sold the building to a consortium called Natrium, which is a joint venture between Irish firm D2 Private and funds managed by the UK-based Cheyne Capital.

Natrium also acquired the operational side of the department store, but this was immediately sold by the new owners for €1 to a UK insolvency expert and the store closed.

A new investigation has been launched into the closure.

It also emerged at the weekend that the Department of Social Protection has appointed senior counsel to advise it on whether it can recoup the €2m cost of paying statutory redundancies to the 460 workers.

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