Matt Shanahan on Debenhams collapse and company law reform
Matt Shanahan spoke about the collapse of Debenhams in Waterford and its impact on long-serving employees. He urged company law reform and proposed measures such as mandated employee trusts to prevent future losses to workers.
Debenhams in Waterford
Debenhams was described as a linchpin tenant in the City Square Shopping Centre, supporting direct staff and concessionaires and bringing pride to Waterford. The speaker noted many employees had worked there for decades and recalled holding a loyalty card as an act of solidarity with workers.
Worker impact and regional unemployment
The speaker warned that the South East region has the highest regional unemployment and that Waterford city has the highest city unemployment in the country, underlining the significance of the job losses. He stressed that work delivers dignity, respect and financial independence for families and for future security.
Critique of company practices
He criticised what he called a "tactical insolvency" and raised concerns about speculative asset stripping, including the movement of funding through two companies in different jurisdictions. He argued the smaller part of the entity was saddled with debt and left insolvent, a process he said was unfair to employees.
Calls for legal and policy change
He urged the government to enshrine employment respect within company law and to close loopholes that allow asset stripping and speculative administration. He proposed protections for SMEs, greater safeguards for workers and consideration of mandated employee trusts to ensure employees are not left without recourse.
Appeal to government resolve
He called on the government to show dynamic leadership, innovation and radical reform and to signal that it has the backs of frontline, midline and backline workers. He expressed confidence that a resolution could be found if there is political will.
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Up in the gods. Minister, we had a short debate last night and it's ironic that we're back here again so soon, you and I, but part of what was mentioned last night was possibly the dignity of work and the importance of work and the value of work. Work delivers respect, it engenders self-respect, it provides independence to families, financial independence. It allows people and families to craft a future for themselves and for their children and hopefully to provide security in their old age. And we have many forms of work in this country as we know and retail at this present time has proven to be one of the more difficult areas. In work, there's always implicit contracts of give and take, the contract of exchange, fair work for fair value. And you can argue that the pay that is given to people is full recompense for what they have done in a day. But I think you must also add the summation of time, the intrinsic value that employees deliver to an organization over time. And Debenhams is one such organization in Ireland. And we know that we have people there working extended years, some over 30 years, a lifetime of work in fact. Debenhams and Waterford has been a significant employer for many years, not without its troubles, but will be seen as a linchpin retailer. It is the linchpin tenant up to now in the City Square Shopping Centre, providing employment directly and for concessionaires as well, and was well supported in Waterford City. It had previous administration difficulties some years ago when the workers rallied absolutely and so did the City. I hold here my own Debenhams loyalty card that I got four years ago to show solidarity and support to the workers in Waterford. The South East region presently has the highest regional unemployment in the country. Waterford as a city has the highest city unemployment in the country. And Debenhams was a very valuable workplace for a lot of people and brought a lot of pride to the City. And I am astounded to be quite frank with, to quote someone else here already, the tactical insolvency that has taken place with this company. I got an email the other day telling me my number of loyalty points and that I can cash them in online. I won't be doing that. I will not be supporting this company in what it has taken and what it has engendered to do to the people that it has employed. I think, Minister, we need to look again at the enshrinement of employment respect within company law, because it is certainly not there presently when a company can do this process and companies have availed of this process as we have heard in the past. Last night, I spoke to you about administration life, the protection that should be afforded to small SMEs to keep them clear from speculative administrators who would look to do asset stripping and force their companies into administration. Well, the reverse of that is also true, Minister. You can also have speculative asset stripping, which is what has taken place here, and the movement of funding through two companies in two different jurisdictions. And as we have heard, the smaller part of the entity, which was saddled with the debt and now ultimately has become a liability, has become insolvent because of that debt. That is not fair, Minister. And I hope, as we spoke about last night, to see fairness in this programme for government. And you and I spoke about this yesterday evening. Working class has been said here a number of times. I don't like that phrase. I think it's a pejorative term. I think it's used too liberally in this House. There are many deputies in this House and in the Shannon who do not know what working class means. All we know is Irish people working in Ireland. I think it suggests inequity and I think it suggests division where there should be none. And I believe, Minister, now is the time that we must signal change in this area. Last night, I mentioned dynamic leadership, innovation and radical reform. I think now is the time, Minister, the government should show this resolve and signal whether you're frontline, whether you're a midline, whether you're a backline worker, that government has your back. I believe a resolution to the Debenhams solution can be found, Minister. Where there's a will, there's a way. I hope, Minister, the government can resolve these and close these loopholes that exist within company law and treat these vulnerable workers equitably and fairly. And I think maybe it's time that we looked at something like mandated employee trusts in such organisations to ensure that employees in the future are not left, quite literally, holding the baby and nothing else. Thank you, Chair.
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