Clearys

Permabear

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K-9

Permabear wrote: »

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Something like a bond or extra Employer PRSI would cover it, say an extra 0.5% for companies like OCS, which would go directly to a redundancy fund.

As for your cheating analogy, it would go against you in divorce proceedings and a good solicitor would use it to their advantage in negotiations.

Permabear

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K-9

Well all 130 employees wouldn't necessarily get the entitlement.


Anyway, if another company does the same thing, the Government will try and legislate for it. Short term gain for a couple of companies, but all they'll have achieved is highlighting the loophole and maybe a few directors etc. will collect their bonus cheques.

andrew

Permabear wrote: »

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Well, adultry is a criminal offence in almost half of US states. There tends to be a strong relationship between moral wrongs and legal wrongs (with obviously notable exceptions).

Also, I'm assuming you're living in Ireland here - do you really not care that your money is paying for this? Do you really think that this problem is completely unsolvable without ruining the economy or legal system?

Permabear

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Godge

Permabear wrote: »

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In respect of the "silos", you are correct, but in order to rebalance between capital and labour, you could make statutory redundancy payments an exception to the "silo" rule. You could shut down the "silo" factory to save money for the holding company but still be liable for the redundancy payments.

It doesn't have to be an either/or situation for or against the type of structures you describe. If the only thing that the other companies in the structure remain liable for is redundancy payments, workers are protected but businesses are also able to make business decisions albeit slightly more expensive ones.

andrew

Permabear wrote: »

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My point was that there has always been a strong relationship between morals and laws, to the extent that even adultry was illegal in some places.

I don't live in Ireland (I live in the US). But even if I did, I wouldn't see any connection between this and reducing my tax bill. If my money didn't go to former Clerys workers, I'm sure Mr Noonan would find good use for it in the upcoming giveaway pre-election budget.

It's more that everything has an opportunity cost. The more money that goes on things like Clearys workers, the less there is for the stuff which it ought to actually be spent on.

Secondly, holding companies are commonly used for risk management purposes. It's quite common to set up separate subsidiary companies for things like brand names and trademarks, real estate, equipment, operations, etc. This allows different aspects of the company, and different assets, to be put in "silos" so that failure in one silo does not cripple the overall structure.

People seem to be proposing here is that the holding company structure be legally abolished, or else that if one company within the structure fails, the other companies remain liable. People want legislation against the idea that companies can structure themselves in this way within Ireland.

So, yes, I think that's actually a major deterrent to many companies operating here at all. It harms the Irish business environment for very little actual gain.

Nobody is suggesting the abolisionof holding companies, or anything even like it. How about companies holding a reserve for redundancies if they employ workers? How about forcing holding companies to pay any debt that is specifically related to redundancies? There are plenty of policy options out there.

glacial_pace71

Here's an interesting development: the report to the Minister of State, Ged, Nash, has been published in full.

http://www.djei.ie/publications/labour/2015/Clerys_report_070715.pdf

Many of the same concerns on this thread have been explored in the report. (Glad to see they also raise more than an eyebrow at the 'going concern' status and directors' responsibilities in this regard).

Although OCS operated under the provisions of the Companies Acts 1963-2013, many of the provisions in the revised statutory scheme (the Companies Act 2014) are broadly the same, as in effect it was a consolidation of existing law rather than any radical new departure.

Note the report was prepared in the context of the author having access to some of the court papers filed in respect of the winding up of the former OCS Operations subsequent to its acquisition by Natirum. However, it ultimately defers to the Superior Courts in determining the legality or otherwise of the liquidation. We'll just have to wait and see.

(Btw I mentioned in a previously-deleted post a number of parties who had initiated civil litigation in the High Court against various OCS companies. Ultimately, we may need to wait and see in terms of a range of parallel legal proceedings. There would not appear to be any criminal proceedings envisaged by the OCDE or DPP).

Depending upon the outcome of all the foregoing it looks like the current Government are minded to amend the law but, out of respect to the courts, are going to await the outcome before seeking to amend the scope of some of the existing statutory provisions and remedies.

Hotblack Desiato

andrew wrote: »

To recitfy this situation, you don't have to overturn the legal system. You could either make the ultimate shareholder responsible for the debts of it's subsidiaries when those debts relate to redundancy payments.

And if a person holds 100% of the shares of a company, do we make him/her liable for its debts too? Let's go back to how commerce was done 400 years ago when anyone who went into business or invested in one was risking every asset their family owned. Eh, no.

If the concept of limited liability applies to companies owned by people it also applies to companies owned by other companies.

Statutory redundancy which a liquidated company can't cover is paid for out of the social insurance fund, which employees contribute to via PRSI, but all employers contribute towards it too.

Godge

Hotblack Desiato wrote: »

And if a person holds 100% of the shares of a company, do we make him/her liable for its debts too? Let's go back to how commerce was done 400 years ago when anyone who went into business or invested in one was risking every asset their family owned. Eh, no.

If the concept of limited liability applies to companies owned by people it also applies to companies owned by other companies.

Statutory redundancy which a liquidated company can't cover is paid for out of the social insurance fund, which employees contribute to via PRSI, but all employers contribute towards it too.

No, that is not is what is being suggested. What has been suggested on this thread is a reasonable rebalancing between capital and labour to ensure that workers get their entitlement when a subsidiary closed. It would not apply to any other aspect of the business.

Hotblack Desiato

They are getting their entitlement.

Godge

Hotblack Desiato wrote: »

They are getting their entitlement.

At the expense of the taxpayer rather than the expense of the company.

markpb

Godge wrote: »

At the expense of the taxpayer rather than the expense of the company.

Did the employees not contribute to the PRSI fund when they were working?

andrew

Hotblack Desiato wrote: »

And if a person holds 100% of the shares of a company, do we make him/her liable for its debts too? Let's go back to how commerce was done 400 years ago when anyone who went into business or invested in one was risking every asset their family owned. Eh, no.

If the concept of limited liability applies to companies owned by people it also applies to companies owned by other companies.

Statutory redundancy which a liquidated company can't cover is paid for out of the social insurance fund, which employees contribute to via PRSI, but all employers contribute towards it too.

No, that's not what I'm suggesting. I'm suggesting that holding companies become liable for the debts of their subsidiaries when those debts relate to redundancy payments.

Perhaps forcing companies to hold a 'redundancy reserve' would be better.

K-9

markpb wrote: »

Did the employees not contribute to the PRSI fund when they were working?

We already have one of the lowest Employers Insurance rates in Europe as well as very attractive CT rules.

Hotblack Desiato

andrew wrote: »

I'm suggesting that holding companies become liable for the debts of their subsidiaries when those debts relate to redundancy payments.

But why should a holding company be treated any differently from a company owned by individual(s)? We accept that individuals who own companies should be protected by limited liability. The company's debts are not their debts.

mariaalice

Permabear wrote: »

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Its nothing to do with morals ( although it has a lot to do with ethics ) nor has it anything to do with keeping it open clearly it was not a viable business. It was engineered to have the liabilities picked up by the government/state and by extension the taxes we pay its interesting to me that some people will shrill loudly that their tax's are being used to pay welfare but somehow it all right that their tax's are use to pay the liabilities of a company that has the money to pay them.

mariaalice

FreudianSlippers wrote: »

It's not as simple as that - you're not talking about your local firm on the corner doing wills and probate. Hundreds of lawyers working in a firm where people barely know everyone on their floor, let alone everyone working in a commercial department.

Law firms have very good Chinese walls for the most part, and internal breach of same is gross misconduct which would effectively end your career.

My point about this is one about ethics, A large legal firm cant hide behind the fact that they are large nor can they say each director is in charge of different sections etc. The company exists as an entity i.e. all the income coming form every source whether it contract drafting for a government department or putting together a report setting out how to avoided your liabilities and split you assets off for some deal maker all the income goes to the same entity so yes the ethics are important ( not the morality ).

Permabear

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glacial_pace71

Permabear wrote: »

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The new Companies Act 2014 has put in place a number of detailed arrangements in respect of examinership, receivership and liquidation, replacing the 1963-3013 statutory scheme.

In the case of liquidation the Revenue, other public authorities (e.g. rate-levying local authorities etc) all rank with employees when it comes to a winding up:
http://www.irishstatutebook.ie/2014/en/act/pub/0038/sec0621.html#sec621 and http://www.irishstatutebook.ie/2014/en/act/pub/0038/sec0622.html#sec622

Ultimately if a company decides to abuse a statutory scheme to strip assets and land the taxpayer with the bill then there shouldn't be too much bed-wetting if the statutory scheme is revised: look at the noises coming from Ged Nash and other Govt Ministers. Gordon Bros and Natrium have probably affected the outcome of future cases of this nature but I suppose we'll just have to wait until the civil litigation dust has settled before we see what happens next.

Icepick

K-9 wrote: »

We already have one of the lowest Employers Insurance rates in Europe as well as very attractive CT rules.

PRSI is mostly insurance in name only as it has little to do with eligibility for social welfare.
The whole system needs to reformed so that how much you pay in will actually matter.
This will of course mean less money for spongers.

end of the road

Permabear wrote: »

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because its not the tax payers job. the company who was paying them their wages, or whichever company/receiver who took over should be paying

Cool Mo D

Icepick wrote: »

PRSI is mostly insurance in name only as it has little to do with eligibility for social welfare.
The whole system needs to reformed so that how much you pay in will actually matter.
This will of course mean less money for spongers.

PRSI absolutely had to with eligibility for social welfare. For example, if you haven't paid enough PRSI and you lose your job, you will not be eligible for Jobseeker's Benefit.