Government starts investigation into Clerys store sale

Natrium consortium’s €29m purchase examined for breaches of employment law

A new investigation has begun into the closure and sale of Clerys department store in Dublin last year which led to the immediate sacking of 460 staff.

An authorised officer has been appointed by the Department of Jobs, Enterprise and Innovation to examine if the process breached the Protection of Employment Act 1977, the Sunday Business Post reported today.

If alleged breaches of the act are found it could result in a prosecution in the District Court, where the maximum fine is €5,000.

The officer has contacted directors of the Natrium consortium, which bought the store for €29 million, and liquidators KPMG seeking copies of all documents relating to the sale.

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The Clerys site has become synonymous with controversy after Natrium, fronted by D2 Private developer Deirdre Foley, restructured Clerys, a process that saw the O'Connell Street building separated from the business operation.

When the operating company became insolvent and went into liquidation all staff lost their jobs immediately and received no redundancy payments from the company.

A Government report published last month found that transactions such as those preceding the sudden closure of Clerys last year should be made illegal.

"While the transaction that produced this result may have been lawful, it is difficult to avoid the conclusion that it would be preferable if it were not," the report by Labour Court chairman Kevin Duffy and company law lawyer Nessa Cahill said.

The authors recommend that major new protections be introduced for workers, including increased compensation to as much as two years’ pay.

When the operating company became insolvent and went into liquidation, the workers lost their jobs without “warning or notice” and money owed to them was not paid as “an apparent result of the transfer of this asset”, the report found.

Commissioned by Minister for Small Business Ged Nash, the report says the principal disquiet around the closure of Clerys, leading to the loss of 460 jobs, stemmed from a preceding restructuring that separated the O'Connell Street building from the business operations.

The consortium that bought Clerys is trying to lure Apple to open a flagship retail outlet on the ground floor of the site.

It is understood the Natrium consortium has held numerous discussions with Apple over several months.

“Apple has not announced a store for this location,” said the technology giant, in response to queries over its talks with the owners of Clerys.

If Natrium, which is financially backed by Cheyne Capital from London, succeeded in tempting Apple to open a major retail outlet in Dublin, it would represent a considerable coup for the developers.

It is understood that other retailers, such as Sports Direct, have previously run the rule over the Clerys site. But Apple would bring a level of exclusivity to the overall development

There is currently an Apple Store in Belfast, but none in the republic. Apple’s stores are renowned for their expensive fit-outs and are often used more as branding vehicles than simply retail outlets.

It has been reported that the Natrium is considering redeveloping the upper floors of the Clerys building into a hotel.