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GAZETTE
SEP
T
EM
BER 1976
14.7 A letter was received from the English Law Society inviting the Bars and Law Societies of this
Country, as with all other European Countries, to enter into discussion with a view to concluding inter
Bar Conventions. Such an Inter Bar Convention has already been entered into between the Bar in Paris,
and the Solicitors and Barristers in London. We have agreed in principle to participate in such discussions
14.8 A considerable amount of work has been done on all these matters during the year. Unfortunately
due to the very considerable amount of new Draft Legislation that arrives from Brussels, most of the
work of this Committee consists of reacting to such new Legislation. We hope that at some future time
it will be possible to take the initiative in more matters.
COMP ANY LAW
COMM I T T EE
Brian O'Connor,
Chairman
Walter Beatty
Anthony E. Collins
Francis D. Daly
Michael G. Dickson
Mary Finlay
Houghton Fry
Patrick C. Kilroy
James M. O'Dwyer
Laurence K. Shields
Brian J. O'Connor,
Chairman
15.1 The main activities of the Committee comprised surveys of an comment on, proposed national
and European legislation affecting companies and their activities. In the national sphere the committee
made further observations on the Mergers and Monopolies (Control) Óill re-emphasising but with greater
detail the critical comments which they made last year (and which are set out in this committee's report
for 1974-75). The government's Worker Participation (States Enterprise) Bill was also examined in detail
and a memorandum thereon was prepared for the Society's parliamentary committee. This bill provides
for the appointment of one-third of the directors of certain state bodies on election by employees. While
the Bill is of course strictly confined to certain State Companies, it might be that its provisions when
enacted would be used at some time in the future as models for the private sector. Such decision would,
of course, be a radical political one. However, there are certain legal matters which the Committee felt
could be raised on the Bill. These related chiefly to the possible conflict by the directors elected by the
employees between their duties to their company and the duties which they might hold they had to
those who elected them. It was felt by the Committee that this matter had not been satisfactorily resolved
in the Bill and recommendations were made which would do so. The Committee also made a report to
the Parliamentary Committee on the impact of the Anti-Discrimination (Unfair Dismissals) Bill which
is of course of great significance outside the boundaries of mere Company Law. The Bill adds compensa-
tion for unfair dismissal to the ever growing list of preferential creditors under section 285 of the
Companies Act, 1963. The Committee also noted that once the Bill becomes Law it will be necessary to
insert into all written Employment Contracts for a fixed period (e.g. a managing directors service
contract) a term that it is not to apply to such contracts on their expiry. It is a matter which practitioners
will have to pay careful attention to even before the Bill is enacted as this part of it is to operate retro-
spectively to the 16th September, 1976.
15.2 The Committee has also put in hand a brief review of the Companies Act, 1963 with a view to
submitting to the Department of Industry and Commerce recommendations on short technical amend-
ments which might be useful and this has just been completed. The chairman has attended meetings with
the Institute of Chartered Accountants in Ireland to consider any changes in Company legislation which
may be necessitated if Current Cost Accounting is to be widely adopted.
15.3 The Committee's activity on the various pieces of Company Law Legislation emerging from the
European Economic Community continued. The Committee were pleased to be invited by the Oireachtas
Joint Committee on Secondary Legislation to make itself available for discussion on E.E.C. legislation
relating to Company Law. A constant review of draft legislation dealing with or affecting companies has
been maintained. The second draft directive dealing with the Maintenance Increase in Reduction of a
Company's Share Capital and the Payment of Dividends has not yet been adopted by the Council of
Ministers. It is expected this should take place within the coming twelve months and if so it will then
have to be implemented by legislation in this country. The Committee will take steps to ensure that the
Profession is kept advised as to this and its meaning is suitably explained. A major activity of the Com-
mittee this year has been the preparation of a comprehensive report on the draft of the Statute of the
European Company which has been submitted to the Department of Industry and Commerce. This
envisages that a special form of European Company will be able to carry on business in any country in
the Community. It seems unlikely that such Companies would be availed of very much in Ireland. The
probability is that it will be some years before the Statute is adopted as a regulation. The Committee
considered however that it was important that the Department of Industry and Commerce should be
given legal assessment by members of the profession on the Statute particularly as it contains some
principles which may find their way into E.E.C. Company Law applicable to National Companies over
the coming years.
15.4 Members of the Committee continued to assist the working parties of the Community in Brussels
in conjunction with officials of the Department of Industry and Commerce. The directive which is most
advanced after the Second Directive is, not surprisingly, the Third which deals with internal mergers and
the machinery in relation to these for the protection of those directly interested. Similar work is proceed-
ing on a Convention dealing with International Mergers within the Community. The Committee has
not been directly concerned with the Fourth Draft directive which deals with the form of Annual Accounts
which is of more direct interest to the accountancy profession. Working parties of the Commission
Experts have just completed discussions on a draft Directive dealing with Takeovers by way of share
acquisition and a complex Directive dealing with the Rights of Shareholders and Creditors of Groups of
Companies. It is not expected that recommendation will go from the Commission to the Council of
Ministers on these matters for some time. So, they are not likely to be part of National Legislation for
some years.
15.5 The Committee has also considered a very important draft Directive dealing with the Rights of
Employees who have to be consulted in the cases of Mergers and Takeovers of whatever kind. While the
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