By Michael O’Brien
On the same day as the result of the Apple Tax case is to be announced Debenhams workers will descend again on the Dáil as Socialist Party member and Solidarity TD Mick Barry will challenge the Taoiseach again about another example of the government looking the other way while multinational giant evades its responsibilities.
Corporate slight of hand explained
In a meeting with KPMG in May organised by Mick Barry TD, it was claimed that the debts of the Irish subsidiary totalled some €19 million and that stock had a sale value of €25 million. Incredibly they have since changed their story to say that the debt is some €225 million.
This claim arises from lenders to the UK parent (including the Bank of Ireland) obtaining ownership of the company in a debt-for-ownership swap, then extending a further loan of £200 million and making the much smaller Irish subsidiary co-guarantor. They now claim that the proceeds of the Irish liquidation will go towards part settling this contrived debt!
They also made Debenhams’ Danish subsidiary co-guarantor but they have since been released from this obligation! Why can’t this be done for the Irish subsidiary?
Some 122 UK stores are now profitably trading. Real debts incurred in the UK can be paid down over time by profits from those stores.
The struggle goes on
From the above facts and figures the Debenhams workers have correctly concluded not to give up their fight but rather to step it up over the last two weeks. In doing so they are exposing the rigged nature of capitalism that sells workers short time and again, and that this government and its predecessors stand over.
KPMG are unable to complete the task that the court appointed them to do. They are under pressure from creditors to proceed with the liquidation of mostly seasonal stock and have the premises vacated for future tenants. At least one concessionaire unable to access its stock is threatening to no longer supply the UK parent outlets.
This leverage arises from the solid blockades that have extended to the vast majority of stores and provides the best chance for forcing the liquidators, creditors, UK parent and government between them to work out a settlement that satisfies the workers’ bottom line demand of four weeks pay per year’s service, which at an estimated €13 million, is entirely realisable. The UK parent is taking the money from the Irish online trade, which in 2018 (the last available figures) amounted to €30 million euro.
The government’s promised July stimulus for retail cannot disregard those thousands of retail workers such as in Debenhams who through no fault of their own had their jobs sacrificed in the context of a global pandemic.
If the blocades can be maintained and extended by the workers and their supporters the only option remaining for the liquidator and concessionaires is court injunctions which should be the cue for a major political and industrial escalation. The official trade union movement have been consistently behind the curve in this dispute. The Irish Congress of Trade Unions should now make the call for all workers to join a national day of protest action in support of the Debenhams workers’ demands being met as well as lasting changes to how liquidations operate in this state.
- Debenhams Retail Ireland Ltd be released as co-guarantor of the UK parents £200m loan to itself!
- Money owed by DRIL to the Revenue and proceeds from Irish online sales be set aside to fund an enhanced redundancy package
- Debenhams workers entitlement to four weeks pay per years service takes precedence over other debts
- The government legislate before the summer recess the recommendations of the Duffy Cahill report as well as legally placing workers at the top of the hierarchy of creditors and obliging full access to company books in liquidation scenarios in the future
- The July ‘retail stimulus’ include direct government investment in safeguarding retail jobs by nationalising major jobs shedding outlets