Experts’ Report on examination and review of laws protecting employees published

April 29, 2016

We recently informed you that, following the closure of Clerys in June 2015, Kevin Duffy, Labour Court Chair, and Neasa Cahill, BL, were appointed to prepare a report examining the interface between employment law and company law to establish whether the legal protections for employees and unsecured creditors in insolvency situations are sufficient.  The finalised report, which can be found here, was published last week.

The report provides a comprehensive analysis of the relevant provisions of employment law and company law in situations where valuable assets in a company are separated from the operating entity, and how the position of employees can be better protected in such situations. It makes a number of proposals for reform of the law, including:

  • A consultation period of not less than 30 days before any collective redundancy takes effect, whether the employer is insolvent or not;
  • if this consultation period is not afforded to employees, compensation payable should be increased from four weeks’ pay to two years’ pay; and
  • if an employer transfers assets out of the business with the effect of perpetrating a fraud on the employees, there should be a mechanism for recovering the asset or the proceeds of its sale.

Separately, Minister Richard Bruton also requested the Company Law Review Group to review company law with a view to recommending ways in which company law could potentially be amended to ensure better safeguards for employees and unsecured creditors. This review is expected to be completed in the coming months and we will keep you updated in relation to its publication.

Authors: Julie Austin and Niall Hayes 

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