Business

Iceland workers vent frustration in High Court over treatment

Metron Stores Limited placed into examinership earlier this year on insolvency grounds and being unable to pay debts of €36m

The court heard that Iceland workers’ direct debits had 'bounced', while others had to 'take out loans or go into overdrafts'.

Mon Aug 21 2023 - 17:59

Workers at the Iceland chain of stores have voiced their anger and frustration before the High Court over the manner in which they have been treated by their employer.

Their employer, Metron Stores Limited, was placed into examinership earlier this year, on the grounds that it was insolvent and unable to pay its debts of €36 million

Joe Walsh was appointed as examiner to the retailer.

Firm’s creditors

Despite its difficulties, an independent expert’s report has stated that Metron has a reasonable prospect of survival if certain steps, including getting fresh investment and the approval of a scheme of arrangement with the firm’s creditors, are taken.

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During Monday’s vacation sitting of the court Iceland employee Donna Grimes told Mr Justice Michael Quinn that following the current owner’s acquisition of the Iceland stores in Ireland last February more than 300 workers have suffered “stress and anxiety” due to “a lack of certainty” about their futures.

In the takeover deal a company called Project Point Technologies Ltd, with Naeem Maniar as director, acquired Iceland UK’s interest in Metron, she claimed.

Ms Grimes, a member of the IWU trade union, said that the workers had either received “half their wages” or “got nothing at all” for the weeks they had worked. Their terms and conditions had also been “unilaterally changed”, she said.

Workers’ direct debits had “bounced”, while others had to “take out loans or go into overdrafts”.

She criticised Metron, which she said from “day one of the takeover did not pay rent to many landlords, pay energy bills, commercial rates and in some cases, suppliers. This is alongside the refusal to pay correct wages, causing huge and obvious alarm as it revealed a level or premeditated calculations.”

Expressing the workers’ frustration over delays to the redundancy process, and over the payment of wage claims before the WRC, Ms Grimes asked the court to “give justice to the ordinary workers who have been victims of a most sinister and devious series of events”.

She asked the court to make an order compelling the company, which has cash reserves of €300,000, to “settle all outstanding wage issues and dismissals”.

In reply, the judge said while he had “great sympathy” for the workers due to the uncertainty they are facing, he did not have the jurisdiction to make the order sought.

He told Ms Grimes and the other workers who had gathered in court that the employees’ situation is “very much part of the examiner process”, which is still to run its course.

The workers expressed their view after lawyers for the examiner sought to extend the period of the examinership from 70 to 100 days, the maximum period legally allowed.

Ongoing discussions

Seeking the extension Stephen Brady, for the examiner, said that his client is sympathetic to the workers and has been engaging with them since Mr Walsh’s appointment as examiner.

Those discussions remain ongoing, he said.

When seeking the extension, counsel said that Mr Walsh has been working hard with a proposed new investor to help fund the proposed scheme of arrangement and remains of the view that a survival plan for the company can be brought to fruition.

Metron’s difficulties arose from factors including the serving of an order on it by the Food Safety Authority of Ireland (FSAI) requiring the company to withdraw all imported frozen food of animal origin from its stores.

Metron has also suffered significant losses in the past two years due to a high cost base.

As well as hearing submissions from the workers, the judge was also appraised of several significant issues in the examinership including that the FSAI has concluded its investigation and is satisfied with all of the steps taken by the company.

The company, which had operated 26 stores in Ireland, has also made preparations if required to make applications to the court to repudiate leases it had entered into for its stores.

Metron does not know at this stage how many applications will have to be made. However, the court had heard that it may have to close several of its stores permanently.

The court also heard of a dispute between Iceland UK, the former owners of the Irish retail units, and the current owners.

Gary McCarthy SC, for Metron, said that it had raised some serious questions about Iceland UK.

Counsel said that the issues raised relate to takeover of the business.

Counsel added that it is his client’s case that money was “swept” out of the business by the former shareholder before the takeover.

Explanation sought

His client was seeking an explanation for all of this before deciding what to do, counsel said.

Counsel said that it was awaiting answers from Iceland UK before a decision on what steps are to be taken.

Shelly Horan, for Iceland UK, said the allegations were rejected by her client. And she expressed surprise and concern that those issues, which were only put to her client’s lawyers last Friday, were being raised before the court and described the allegations as “reckless”.

Counsel also added that none of Metron’s allegations had come from the examiner.

The examinership will return before the court next month.

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