The High Court is set to rule this autumn on whether or not 150 former Irish Ispat workers, who are suing the defunct company for hearing loss, should be paid the full amount of any compensation due to them from the proceeds of its liquidation. Barry O'Halloran reports.
The 150 Ispat (formerly Irish Steel) workers are claiming for hearing loss sustained while working at the company's steel plant at Haulbowline Island in Cork Harbour. It is understood that their cases are due to go ahead next year.
But before their claims are heard, the company's liquidator, Mr Ray Jackson of KPMG, will ask the High Court to rule on whether any successful hearing loss claimants should be treated as preferential creditors, if they are awarded compensation. That case is scheduled to go ahead next November.
If the court rules that they should be treated as preferential creditors, this would give their compensation awards the same status as the money due to the Revenue Commissioners and the wages and benefits due to all staff. If they are treated as ordinary creditors, there's no guarantee that they will receive the full amount due to them. Under the Companies Acts, preferential creditors have to be paid the full amount that they are owed in a liquidation, unless there is insufficient funds to meet their claims.
When it was placed in liquidation in mid 2001, Irish Ispat's owner, Ispat International, said it would be in a position to pay its debts. These amounted to €48.2 million. Its assets were €40.6 million, but the plant and the company's property was valued at around €21.6 million.
Since then the Department of the Environment and Local Government has brought an action against Irish Ispat demanding that it foot the bill to clean the Haulbowline site.
Mr Jackson told The Irish Times at the weekend that he could not say how the court was likely to rule on the status of any compensation claims. The law in this area is not clear, any worker due compensation as a result of injuries sustained in a workplace accident is treated as a preferential creditor. However, the 150 workers say they suffered hearing loss as a result of working in the plant, and not as the direct result of an accident.
Over 400 workers lost their jobs when Ispat finally closed in 2001. The Department of Enterprise, Trade and Employment social fund paid the wages, redundancy and other benefits which they were owed. This is common practice in liquidations. It is not clear if all the 150 hearing loss claimants were working in the plant at the time it was shut.
