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The Government will establish a € 3 million business training, further development and start-up fund to help former Debenhams workers who lost their jobs when the company’s Irish operation went into liquidation last year with the loss of around 1,200 jobs.
The proposal is part of a recommendation drawn up by Labor Court President and Ombudsman Kevin Foley after extensive engagement with workers and their Mandate union, KPMG liquidators and various government agencies in an attempt to resolve the long-running dispute. on increased severance pay. .
In its proposals, Foley found that the 2016 collective bargaining agreement for enhanced severance pay no longer had legal application, and that the current legal framework limits the scope of liquidators to contribute to a 250-day resolution of the dispute.
Mr Foley points out that the main preferred creditors of the Debenhams Ireland liquidation are the Department of Social Protection and the Revenue Commissioners, with a debt of approximately € 18 million.
However, he warns: “The available resources are widely exceeded by the debt with these preferential creditors.”
It indicates that the State has assumed responsibility for the legal severance payments totaling more than 13 million euros, without the employer contributing to these benefits.
He points to the prolonged battle of workers in the search for better dismissal conditions provided for in a 2016 collective agreement, but notes: “I have not been able to establish that the terms of that collective agreement were applicable to the dismissals that occur in 2020. In any case, it is clear that the agreement has no legal application in 2020 ”.
In the three-page document, Mr. Foley notes that the workers’ long careers came to an end “in a way that does not reflect the contribution they made to the retailers they served so long.
Mr. Foley says he is satisfied that all parties approached the process in good faith and that their proposals are the “optimal set of measures that can be implemented to achieve a resolution of this dispute.”
He notes that the length of the liquidation has further reduced available assets.
“In particular, the expenses incurred to date in the very extended liquidation process, including the expenses in security payments to the owners, etc., but not including the fees to the liquidators or other similar professionals, have caused the depletion of practically all the cash resources in the business that initially exceeded 4 million euros “.
It notes that it is not clear that any sale of Debenhams’ remaining shares has the capacity to exceed its cost.
Mr. Foley acknowledges that the current legal framework limits the scope of liquidators to contribute to the resolution of the dispute.
“However, it is now clear to me that despite extensive commitment and thorough consideration, the major senior creditors will not find it possible to compel the liquidators to do anything other than comply with the requirements of the relevant law,” he said.
“The result of that conclusion is that the liquidation process cannot, within the framework of the relevant law, make any financial contribution to the resolution of this dispute.”
Mr. Foley notes that the Department of Business, Commerce and Employment is currently reviewing the provisions of labor and company law related to layoff situations.
However, he points out that these changes will not be retrospective, saying; “Of course, it is true that developments in relation to these issues will have application in the future and not today.”
Notes that former Debenhams workers face the challenge of exploring new and different employment opportunities, and says that in recognition of the “exceptional circumstances”, the Government will make available a fund of 3 million euros to support career guidance, training, education and business creation. UPS.
The fund, managed by Solas, will last for two years or until the funds have been fully disbursed.
Mr. Foley concludes by acknowledging that workers may be disappointed, saying: “In establishing the above arrangements, I am aware that they do not measure up to the ambitions of the former workers. However, I am satisfied, having extensively compromised the matter with the parties involved and with the Government, who represent the maximum achievable in a very difficult situation.
The proposals will be submitted to a secret vote of the workers.
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