THE OWNERS of troubled foam manufacturer Vita Cortex were yesterday challenged to open their company accounts after they claimed they were unable to pay redundancy to 32 former staff currently occupying the company’s plant in Cork.
Cork South Central Labour TD Ciarán Lynch said there was an onus on the company to prove its claim that it wished to meet its commitments in terms of redundancy to the 32 workers but did not have the funds to do so.
Minister for Jobs, Enterprise and Innovation Richard Bruton has said his department no longer has responsibility for the issue of redundancy payments, which now lay with the Department of Social Protection. He urged both parties to make use of the State’s industrial relations machinery to resolve the payments dispute. He also asked the Labour Relations Commission to be on “standby”.
Mr Lynch pressed the company to clarify its financial situation. “The Vita Cortex empire is a construction of a number of different companies – we see one company that has a debt to Nama and we see another company that has a debt to the workers here in the Vita Cortex plant at Kinsale Road in Cork,” said Mr Lynch.
“The company has said it is willing to co-operate with regard to the payment, so it should now open up its books and allow a full and forensic examination of the accountancy structure of the Vita Cortex empire, and establish once and for all whether it has the ability to pay or not.”
This should also allow some examination of who precisely owns the Kinsale Road site, an evaluation of its worth, whether it is mortgaged and whether it could be disposed of to raise money to pay for redundancies, he added.
Mr Lynch was speaking after Vita Cortex issued a statement on the impasse, which arose after Nama froze €2.5 million in an account held by another Vita Cortex company when it took over a €10 million loan from AIB to Vita Cortex in Cork.
Vita Cortex said it tried unsuccessfully to get Nama to release funds from this €2.5 million deposit account, but Nama refused on December 14th. AIB refused to make further money available to pay redundancy to the workers.
“We wish to state categorically that Vita Cortex is not refusing to pay the redundancy. It is very much the desire of the management of Vita Cortex to be in a position to make good on our obligations, however, the company does not have the funding to meet these obligations at this time.”
Vita Cortex said it was applying to the State’s Social Insurance Fund to enable payment of statutory redundancy of two weeks’ pay per year of service to all 32 former staff. The workers have called on the company to pay redundancy to the 32 laid off on December 16th at the same rate of 2.9 weeks’ pay per year of service paid to all who took redundancy there in recent years.
Workers estimate the total cost of paying 2.9 weeks’ pay per year of service to all 32 staff would come to €1.2 million, for which the firm would be allowed a tax rebate at 60 per cent – so the net cost to the firm would be €480,000.