Tuesday, 6 December 2011
Dáil Éireann Debate
141. Deputy Caoimhghín Ó Caoláin asked the Minister for Jobs, Enterprise and Innovation if his attention has been drawn to cases in which employers close down and reopen under different names as a ruse to evade orders to pay wages due to employees, including cases of forced labour in which workers may be owed tens of thousands of euro for years of overwork and underpayment; if he will introduce legislation to prevent this practice; and if he will make a statement on the matter. [38883/11]
Minister for Jobs, Enterprise and Innovation (Deputy Richard Bruton): The Company Law Enforcement Act 2001 established the Office of the Director of Corporate Enforcement and strengthened the legislative provisions dealing with insolvent companies. The Director has powers to initiate company investigations, prosecutions, restrictions and disqualifications with a view to curbing abusive practices by directors.
Section 56 of the Company Law Enforcement Act 2001 provides that the liquidator of an insolvent company must submit a report to the ODCE together with information on the conduct of any person who was a director of the company during the 12 months preceding its liquidation. The liquidator must also proceed to apply to the High Court for the restriction of each of the directors of the insolvent company, unless relieved of that obligation by the ODCE.
The ODCE has also been conferred with certain powers to address unliquidated insolvent companies i.e., those companies which are not in liquidation and have not yet been dissolved. The legal powers include applying to the High Court for the restriction of the company’s directors. This power has been successfully used to sanction directors.
A restriction declaration, if made, prohibits an individual from acting, either directly or indirectly, as an officer of a company or from being involved in its formation or promotion for five years, unless the company is adequately capitalised. In the case of a private company, the capital requirement is €63,487 in allotted paid-up share capital. The equivalent figure for public companies is €317,435.
If the Deputy has knowledge of a suspected breach of company law this should be reported to the Director of Corporate Enforcement. The Director is independent in the performance of his statutory duties and I have no direct function in these matters.
Legal obligations relating specifically to payment of wages are contained, principally, in the Payment of Wages Act 1991. Complaints of non-compliance may be referred to the Employment Appeals Tribunal (EAT) or to the Rights Commissioner Service. Enforcement of EAT determinations or Rights Commissioner decisions may be made through the Circuit Court.
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