State probing Clerys sale for possible breaches of jobs law
Published 02/05/2016 | 02:30
The controversial closure and sale of the Clerys department store in Dublin is to be probed to determine if there were any breaches of employment law.
Any breach of two sections of the Protection of Employment Act, which are being examined on behalf of the Department of Jobs, Enterprise and Innovation, could result in fines of up to €5,000 being levied on an offender by the District Court.
Staff at Clerys learned in June of last year that they were to lose their jobs, just hours after the store building had been sold. There were 450 people working at the iconic retailer at the time.
A liquidator was appointed and staff at the store were entitled to receive only statutory redundancy. Many of them had worked there for many years.
The store had been owned by OCS, a unit of US-based private equity firm Gordon Brothers.
It sold the building to a consortium called Natrium, which is a joint venture between Irish firm D2 Private and funds managed by the UK-based Cheyne Capital.
Natrium also acquired the operational side of the department store, but this was immediately sold by the new owners for €1 to a UK insolvency expert and the store closed.
D2 Private is headed by businesswoman Deirdre Foley.
The manner in which staff were treated caused outrage.
It emerged at the weekend that the Department of Jobs, Enterprise and Innovation has appointed an official to conduct an initial investigation.
It was reported that an official has requested documents relating to the Clerys sale from the directors of Natrium, Gordon Brothers, OCS and the liquidator of the business, KPMG.
It is understood that the fact-gathering mission was initiated a few weeks ago.
There is no clear timeline on when that part of the investigation will be completed.
Nor is it clear when a decision might be made on whether there is enough - or any - evidence to determine whether or not the matter could eventually be referred to the authorities.
Any potential legal action for breaches of the relevant sections of the act can only be taken against the actual employers of the Clerys workers.
These complexities mean that it is likely to be some time before there is any significant movement on the case.
A report commissioned by the Department of Jobs, Enterprise and Innovation and published last week recommended 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 report was commissioned as a result of events at Clerys and was critical of the sales process.
The report noted that while the transaction that led to the Clerys closure was lawful, "it is difficult to avoid the conclusion that it would be preferable if it were not".