'Let Joan Burton represent the Clerys workers'
The Government is set to foot a huge bill following the closure of Clerys as it begins making redundancy payments to laid-off workers in coming weeks.
Business and Employment Minister Ged Nash said in a report prepared for Cabinet that the State may well end up shouldering the biggest financial burden as a result of the controversial closure of the department store.
“In economic terms the State may well turn out to be the biggest loser in this transaction,” he said.
Mr Nash said that the closure of the O’Connell Street landmark was handled in a “grossly insensitive manner” and amounted to a “personal disaster” for 460 staff.
In a 23-page post mortem on the sudden and controversial closure of the iconic Dublin department store last month, Mr Nash said that there
was “scant respect” shown for those affected by the decision to pull the shutters down.
“It appears that the affair was, to say the very least, handled in a grossly insensitive manner which showed scant respect for those so adversely affected by this course of action,” said Mr Nash.
Mr Nash proposed a particular application of company law which would give Minister for Social Protection Joan Burton particular rights on behalf of employees.
Mr Nash said that Section 10 of the Protection of Employees (Employer’s Insolvency) Act 1984 provides that, where the Minister makes payment to an employee in respect of claims not paid by the insolvent company, then these rights and remedies are transferred to the Minister.
“This includes the employee’s right to be paid in priority to other debts,” he said.
“In other words, the Minister for Social Protection steps into the shoes of the employees and herself becomes a creditor in the liquidation.”
Clerys directly employed about 130 people, with a further 330 working at in-store concessions on the premises.
The company behind the retail business, OCS Operations, and two related firms were sold last month by US investment group Gordon Brothers to a firm called Natrium.
Natrium is a joint venture between Irish firm D2 Private, headed by Deirdre Foley, and UK investment company Cheyne Capital Management.
Natrium sold OCS Operations to a British insolvency practitioner. On Monday, the High Court confirmed the appointment of joint liquidators Eamon Richardson and Kieran Wallace of KPMG to OCS Operations.
Natrium retained control of the company that held the physical Clerys premises, OCS Properties.
Natrium has claimed it will create as many as 1,700 jobs after it redevelops the Clerys site over a two-year period.