Mediator Kevin Foley says he is satisfied all parties approached the process in good faith
In his proposals, Mr Foley found that the 2016 collective agreement for enhanced redundancy payments no longer had legal application, and that the current legal framework limits the scope for the liquidators to contribute to a resolution of the 250-day dispute.
Mr Foley notes that the main preferential creditors of the Debenhams Ireland liquidation are the Department of Social Protection and the Revenue Commissioners, with a debt owed of approximately €18m.
However, he cautions: “Available resources are far outweighed by the debt owed to these preferential creditors.”
He notes that the State has taken responsibility for statutory redundancy payments totalling over €13m, with the employer making no contribution to those entitlements.
He notes the lengthy battle by workers in pursuit of enhanced redundancy terms provided for in a 2016 collective agreement, but notes: “I have not been able to establish that the terms of that collective agreement were intended to be applicable to redundancies occurring in 2020. In any event, it is clear that the agreement has no legal application in 2020.”
In the three-page document, Mr Foley notes that the workers long careers were brought to an end “in a manner not reflective of the contribution they made to the retailers to whom they gave such long service.
Mr Foley says he is satisfied all parties approached the process in good faith, and that his proposals are the “optimum set of measures which can be put in place to achieve a resolution of this dispute.”
He notes that the extension of the liquidation has further reduced available assets.
“In particular, expenditure incurred to date in the very extended liquidation process, including expenditure on security payments to landlords, etc, but not including fees to liquidators or other such professionals, has resulted in the depletion of practically all cash resources in the business which at the outset exceeded €4m.”
He notes that thee is no clarity that any sale of remaining Debenhams stock has the capacity to exceed its cost.
Mr. Foley acknowledges that the current legal framework limits the scope for the liquidators to contribute to the resolution of the dispute.
“I am now clear however that, despite extensive engagement and full consideration, the principal preferential creditors will not find it possible to mandate the liquidators to do other than meet the requirements of the relevant law,” he said.
“The result of that conclusion is that the liquidation process cannot, within the framework of relevant law, make any financial contribution to the resolution of this dispute.”
Mr Foley notes that the Department of Enterprise, Trade and Employment is currently examining employment and company law provisions relating to redundancy situations.
However, he notes that those changes will not be retrospective, saying; “It is of course the case that developments in relation to such matters will have application in the future rather than currently.”
He notes that former Debenhams workers face the challenge of exploring new and different employment opportunities, and says that in recognition of the “exceptional circumstances”, the Government will make a €3m fund available to support career guidance/training/education/business start-ups.
The fund, administered by Solas, will run for two years or until the funds have been fully disbursed.
Mr Foley concludes by acknowledging that workers may be disappointed, saying: “In setting out the above arrangements, I am conscious that they fall short of the ambitions of the former workers. I am however satisfied, having engaged extensively on the matter with the parties involved and with Government, that they represent the maximum achievable in a very difficult situation.
The proposals are to be put to a secret ballot of workers.