Paul Murphy Challenges Company Law Review on Workers' Rights
Paul Murphy criticised the current legal framework for redundancy and company liquidation, arguing it allows cynical tactical liquidations that deny workers agreed enhanced redundancy payments. He challenged the Companies Law Review Group's composition and mandate, saying it overwhelmingly represents business interests and lacks a specific remit to protect workers.
CLRG composition and dissent
Paul Murphy recounted the example of over a thousand workers affected by a tactical liquidation and noted the CLRG included representatives from Banking and Payments Federation Ireland, Euronext, ICTU, the Irish Funds Industry Association, the Institute of Directors in Ireland, ISME and the Small Firms Association. He highlighted that ICTU produced a minority report supporting preferential treatment for workers while most business bodies opposed expanding preferential creditor status.
Allegation of class interest bias
He argued that the membership makeup - with bankers, stock exchange, funds industry, directors and small business groups - produced advice naturally aligned with business interests. He pointed out the state regulators and professional bodies are also represented, but contended the group has no explicit mandate to protect workers' rights.
Mandate under Companies Act 2014 section 959
Murphy asked about the CLRG’s statutory remit under Companies Act 2014 section 959, and was told the group must promote enterprise, facilitate commerce, simplify the Companies Act, enhance corporate governance and encourage commercial probity. He emphasised that this mandate does not specifically require protecting workers’ redundancy rights, calling into question reliance on the group's advice on preferential creditor status.
Debenhams aftermath and training fund drawdown
He raised related questions about a 3 million euro training fund set up after strike action, asking how much had been drawn down and noting the fund’s deadline was October 2022. Officials replied the vast majority remained unspent, the programme was voluntary, efforts had been made to simplify access and appeals usually resulted in approval, and any unspent money would revert to the National Training Fund and the Debenos Fund.
Implications for law reform
Throughout the exchange Murphy argued the present legal settings allow repeat occurrences and insisted the law needs to be changed to better protect workers from tactical liquidations and to secure enhanced redundancy entitlements.
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Thank you, Chair, and thanks a lot for the presentations. I think something important to remember here is that I don't think it is a matter of debate about whether there is a problem with the law as it currently stands. We have the example of what happened to the workers in Devon, over a thousand workers working for a company which engaged very, very clearly in a cynical tactical liquidation in order to deny the workers what they had in a collective agreement which was an enhanced redundancy package. So we have a problem. We had the Taoiseach, the Tanaiste, every one of them every time we'd ask would say it's terrible, it's shameful what Debenhams did, etc. But as it stands, that can happen again. So the law needs to be changed to protect workers. Just a question to Mr Egan, or as you choose. At the end of your statement you say you seek here to represent the consensus or near consensus view of the CLRG. Is it a consensus or a near consensus? About opposing workers getting preferential status in terms of enhanced redundancy payments? Mr Egan, there was, as you know, a minority report by the ICTU representative. I believe that the ICTU representative was the one member of the review group who did not agree with the proposed expansion of the class of preferential payments beyond what is there in the law. You did agree with it? Yes. Yes. Yes, ICTU is on record. What other representative bodies other than ICTU are part of the company law review group? Representative bodies, Banking and Payments Federation, Ireland, Euronext, that's the Irish Stock Exchange, ICTU, the Irish Funds Industry Association, the Institute of Directors in Ireland, the Irish Small and Medium Enterprises, ISME, and the Small Firms Association. Okay, so you're telling me the representatives of the bankers, the representatives of the Irish Stock Exchange, the representatives of the Irish Funds Industry, the representatives of the company directors, and two organisations that represent small firms, they all were against making workers preferential creditors, and ICTU, who represent workers, were in favour of it? It's probably unsurprising. Well, precisely. Isn't that the point? Is that class interest is being represented here? I should add, however, that the state and regulators are also represented, and you have the Attorney General's Office, the Central Bank, Companies Registration Office, Corporate Enforcement Authority, Court Services, Department of Enterprise Trade Employment, Irish Auditing and Accounting Supervisory Authority, and the Revenue Commissioners, and then you have professional bodies, professional bodies who have members who have members who represent all sides, so the barristers, company secretaries, the accountants, the solicitors and insolvency practitioners, so they're all represented there too. Yeah, but the ones that represent the workers are in favour of it, and all those that represent the various groups of businesses are against it. Could you outline what your mandate under the Companies Act 2014 section 959 is, when advising the Minister, what are the things that you are meant to take account of? We are to seek to promote enterprise, facilitate commerce, simplify the operation of the Companies Act, enhance corporate governance and encourage commercial probity. You have no mandate to protect workers' rights? Not specifically. I should mention that an announcement was made during lockdown, I can't pin the exact date, that it's proposed that there be an employment law review group, a little bit along the lines of the company law review group, which would have a dedicated mandate in that space. I mean, my point basically is, you're against enhancing workers' redundancy, kel surprise. Your body is made up overwhelmingly of employers' representatives, and your mandate is explicitly not anything to do with workers' rights, protecting workers' rights, but in fact legally you have to come up with advice that promotes enterprise, facilitates commerce, and encourages commercial probity. So why should we take your advice that much on board when it's so obviously class biased? I don't think I have an answer to that. Okay, no problem. If I could go to Solis for a second, just can you tell me how much of the fund, the 3 million, like that's basically all the workers, after over a year of strike action and so on, all the workers got out, it's not your problem, or your fault, was a 3 million training fund. How much of that has been drawn down so far? Okay, so the vast majority still hasn't been drawn down. And that comes to an end when? October, sorry, October 2022. October 2022. And any money that is not spent by that point in time goes into an overall part of the National Training Fund and the Debenos Fund. Robert, people would have to confirm that for you. That's certainly what the PQ answers suggest. And what's your estimate of how much will be drawn down by the time we come to the end of October? I take it. This is voluntary. The program is voluntary and we're trying to encourage people to come forward. Right? So, you know, we'd love to spend the 3 million, Deputy, right? That's our target, right? But I suppose we have to be realistic. But every effort has been put in to activate, motivate and encourage people to come forward. Okay? And, you know, could you give me a figure? How many applications have been turned down because they don't meet the criteria? I don't have left a hand, but we have changed our policies to reflect an easier pathway for people coming through. And like every organization, there's an appeals process. If somebody, you know, if it was rejected initially, it would go through a process. And nine times out of ten, they are approved on appeal. Okay? So we've moved to simplify it. Okay? Now, obviously, we're very conscious of taxpayers' funding. We have to be very conscious of PAC and audits and all that. But I think we've been very fair, right? And we will continue to do that across the country between now and the end of October. And then it's a policy decision for colleagues in government as to the next step. Okay. Thanks. Okay. Thank you. Okay. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
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