State launches major investigation into Clerys sale which led to 460 staff being sacked
Published 01/05/2016 | 12:20
A new investigation has been launched into the closure and controversial sale of Clerys department store in Dublin last year which led to 460 staff being sacked overnight.
An authorised officer has been appointed by the Department of Jobs, Enterprise and Innovation to examine if the process had 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.
Acting Minister for Employment and Jobs, Ged Nash (Lab) pushed for the investigation after he requested that the Attorney General, Maire Whelan, review the deal.
The sale of Clerys saw private equity fund Gordon Brothers net a fortune by selling the building to a wealthy consortium called Natrium for €29 million.
Natrium, fronted by D2 Private developer Deirdre Foley, restructured Clerys to ensure that all staff were entitled only to statutory redundancy - paid for by the taxpayer.
A Government report published last month found that transactions such as those proceeding 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 specialist Nessa Cahill said.
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 that there should be increased compensation for workers amounting to two years' pay if an existing 30-day notice and consultation period isn't respected.
The recommendations to extend the existing provisions of the Companies Act to give greater protections to workers are designed to prevent what happened to the 460 staff at the iconic Dublin department store from occurring again.
Ged Nash described the report as an important piece of work.
The consortium that bought Clerys is hoping to put an Apple flagship store on the ground floor of the building.
The tech giant has no official store in Ireland yet.
It is understood that negotiations between the two parties have been ongoing for several months.
Should the deal go through it would represent a major win for Natrium, whose site is also said to have attracted the attention of Mike Ashley-owned Sports Direct.
It has been reported that Natrium is planning to develop the upper floors of the Clerys building as a luxury hotel.