Richard Grogan

Section 678 of the Companies Act 2014 is a problem in the making for employment lawyers. You might wonder why it would have any relevance to employment lawyers at all. The answer is very simple.

It is our view that post the current lockdown, a significant number of companies will not reopen. There will be an issue of companies going into liquidation. The provisions of section 678 provide that even where simply a resolution to wind up a company has been passed then in those circumstances no claim could be brought to the WRC without the consent of the High Court.

The legislation which passed in 2014 had a provision relating to the Employment Appeals Tribunal. An individual was not stopped from bringing a claim to the Employment Appeals Tribunal even where a company was in liquidation.

There is no provision in the Companies Act which changed this to the Workplace Relations Commission. The Workplace Relations Act 2015 makes no reference to section 678 subsection (2) at all.

The effect is that in those circumstances where a company is in liquidation or even a resolution has been passed, no claim will be able to be brought to the Workplace Relations Commission.

This will mean that urgent applications will have to be brought to the High Court. There will then be the additional issue of potential claims against the State under the Charter of Fundamental Rights of the European Union for failing to vindicate the rights of citizens to have their cases heard before a court or tribunal.

The Workplace Relations Commission will not have the power to simply disregard section 678.

It is absolutely imperative that the Companies Act 2014 is amended in section 678 subsection (2) to delete the words “Employment Appeals Tribunal” and to insert instead the words “Workplace Relations Commission”.

This firm has written to the Minister for Justice, the Minister for Employment Affairs and Social Protection and the Minister for Business Enterprise and Innovation, along with the Director General of the Workplace Relations Commission, requesting that this issue is rectified as soon as possible.

If this is not addressed, it would be our concern that there are two issues which will arise. The first will be that unnecessary applications clogging up the High Court as urgent applications will have to made followed on with claims against the State. The second is that unrepresented individuals will go to the WRC and the WRC will be obliged to apply the provisions of section 678.

It might be argued that this is not something that will be argued. The reality of matters is that a liquidator is obliged to protect the assets of a company. If that means making a section 678 defence application to the WRC, then that will have to be done. If they don’t, then the liquidator themselves could be negligent. If the WRC decides to reject that kind of an application, then the matter could well go on appeal to the High Court by way of judicial review seeking damages against the WRC for exceeding the jurisdiction, as setting aside a statutory provision in such circumstances would be questionable as regards their jurisdiction.

Of course an Adjudication Officer applying the Charter can now confirm that a Directive has a direct effect against both the State and private employers. However an Adjudication Officer setting aside section 678 would effectively be ruling not only in respect of a Directive provision but effectively every other non-Directive provision and also would effectively be setting aside the legislation in full in relation to other claims unrelated to employment law which would go to the Courts. We do not see any way that the courts could accept that an Adjudication Officer as part of the WRC would have such a jurisdiction.

• Richard Grogan is a partner at Richard Grogan & Associates Solicitors.