State has six weeks to see if €29m sale of Clerys broke law

The Government has less than six weeks to ascertain if the contentious €29 million sale and closure of Clerys last year involved any breaches of employment-protection laws. The closure resulted in the immediate loss of 460 jobs.

An officer has been appointed by the Department of Jobs, Enterprise and Innovation to examine if the process broke the Protection of Employment Act 1977, according to sources, confirming a report in The Sunday Business Post.

The officer wrote last week to various parties involved in the deal – including the directors of the Natrium consortium, fronted by D2 Private property developer Deirdre Foley, which bought Clerys last year – seeking documents relating to the transaction.

Offence

The parties – which also include D2’s partner

Cheyne Capital

; the previous owners, US private equity firm

Gordon Brothers

; and Clerys liquidators at

KPMG

in Dublin – have until May 9th to hand over files, said one of the sources.

Proceedings for an offence under the 1977 act must begin within a year of it occurring. Clerys ceased trading on June 12th, 2015, after the sale.

Specifically, the official officer is seeking documentary evidence – including emails and board minutes – that company directors responsible for employment at Clerys knew, at any stage of the transaction, that the actions would result in a collective redundancy.

If this is the case, the act states that employers must consult with staff representatives and provide staff with certain information prior to their redundancies.

Liquidation

All Clerys staff lost their jobs immediately when the operating company behind the department story was declared insolvent and put into liquidation as part of the transaction. Staff only received statutory redundancy.

While the maximum penalty for a breach of the law is only a €5,000 fine, sources say that a prosecution, if taken and successful, could result in reputational damage for individuals and act as a deterrent for other companies. It may also affect the future marketability of the property.

Natrium has been asking Apple to open a flagship store on the ground floor under a plan to redevelop the site.

A spokeswoman for the Department of Jobs, Enterprise and Innovation and spokesmen for Cheyne Capital and the liquidators declined to comment. Calls to Deirdre Foley’s office and representatives of Gordon Brothers yesterday were not returned.