Monday, 25 January 2016

Ireland: Government instigates two reviews of company law

The Minister for Jobs, Enterprise and Innovation (Richard Bruton TD) and the Minister for Business and Employment (Ged Nash TD) have announced that two separate reviews of the company law framework are to be undertaken. The reviews will focus on the issues arising in corporate restructuring, particularly where assets are moved between companies in a corporate group, and the protections provided to employees. Concern has been expressed with the way in which the framework operates, particularly following the collapse of Clerys (about which, see here).

The first will be undertaken by the chair of the Labour Court, Kevin Duffy, and Nessa Cahill BL. They have been given eight weeks in which to write a report considering the following questions: (a) could more effective use be made of current legislation to safeguard employees’ interests? (b) at what point in time could any new measures to protect employees’ interests be triggered? (c) are there changes to employment rights legislation that could be considered, or changes at the interface of employment law and company law, including powers to set aside transfers of assets and time periods for same? (d) what solution/framework of measures is required?

A more wide-ranging inquiry, and one that goes to the core of the company law framework, will be undertaken by the Company Law Review Group. The CLRSG has been asked to explore: (a) instances where the corporate veil should be lifted; (b) the strengthening of directors’ duties to employees; (c) checks and balances to strengthen obligations to employees for better protection in company restructuring; and (d) the circumstances in a liquidation of an insolvent company where company liabilities can be met from solvent companies in the same group or in related companies.

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