State may join Clerys creditors’ inquiry

Tánaiste and Minister for Social Protection Joan Burton is considering placing a representative of her department on a committee which would investigate issues regarding the Clerys sale.

The representative would be a senior civil servant from the department, put on the committee on the basis that the Department of Social Protection would foot the cost of a multimillion redundancy scheme for the hundreds of workers who have lost their jobs.

On Monday, the High Court was told in a report furnished by liquidators of the company which formerly operated the Clerys department store that they intended to establish a committee made up of the firm's creditors, which would investigate a number of matters of concern.

Last month over 400 people – direct employees and those employed by concession holders in the O’Connell Street store – lost their jobs when Clerys was sold and its operating company was liquidated.

Unusual move

Placing a representative of a Government department on the committee would be a highly unusual move and sources said Ms Burton would have to seek legal advice to ascertain if it was possible.

It is understood the proposal was raised with Ms Burton earlier this week by Minister of State at the Department of Jobs Ged Nash, who brought a report on the sale and liquidation of Clerys to Cabinet last week.

On Wednesday, Ms Burton forecast the cost to the State of funding the redundancy payments for staff could run into millions, although she did not yet have a final figure.

Aside from the treatment of the workers at Clerys, Coalition sources said the Department of Social Protection could be "by far and away the greatest creditor in all of this".

Mr Nash’s report also said the State stood to shoulder a high cost from the liquidation of the company. He suggested Ms Burton seek a place on the creditors’ committee, although this was not specifically mentioned in his report.

Cost to State

Sources said the cost to the State because of the redundancies

would outstrip the €8,000 owed to the Revenue Commissioners, the €500,000 owed to Dublin City Council and as much as €2 million for concession owners.

Speaking at the biennial delegate conference of the Irish Congress of Trade Unions, Ms Burton described the events at Clerys as "predatory capitalism". She said she would "use every legal avenue to vindicate the State and taxpayers' rights in this regard".

“I don’t believe it’s right that the owners can act as they did while leaving workers in the lurch and the State facing the redundancy bill.”

The Tanáiste said there were “better things to do with social protection money than bail out Clerys”.

The conference unanimously passed an emergency motion condemning what it described as “the callous and shameful treatment of workers” in the former Clerys department store by Gordon Brothers, the former owners, and Natrium Ltd, which purchased the business in June.