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Congress critical of Minister Bruton's failure to remove Clery's 'legal loophole'

Date Released: 23 September 2015

The Irish Congress of Trade Unions on Wednesday (23rd September) strongly criticised Minister Richard Bruton’s failure to close a major loophole in company law that means directors can engineer a firm’s closure to maximise profits and deny workers their entitlements, which Congress says occurred in the shutdown of Clerys department store in Dublin.

Following the shock closure Congress General Secretary Patricia King proposed reforms to Minister Bruton that would have closed the loophole and seen company directors excluded from serving for five years or more, if they breached the new terms.

However,King has criticised an official response to the Congress proposal, as it failed “to address the matters raised.”

King said: “We believe the closure of Clery’s was not a normal commercial failure and it is our judgement that the directors involved contravened the terms of the Protection of Employment Act and did this by contriving a company restructuring, for the purpose of dissipating the assets of the employer company to maximise their own benefits and deny the workers fundamental dignity and respect by avoiding normal procedures.

“This manipulation has resulted in the taxpayer footing the entire bill through the Insolvency Fund,” she said.

“We are requesting that where Company Directors are found to have behaved in the manner outlined above, that company law would provide that the High Court could exclude them as Directors for at least five years.”

King also pointed out that EU law does not prevent national governments from “including additional provisions to enhance the protection of workers” in existing legislation.

“Given the major injustice visited upon the Clerys workers, I would ask that Minister Bruton acts on this as a matter of urgency,” she said.


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