Government wants Irish IT firm to pay €1bn to cover legal costs

Ireland’s new Minister for the Economy has announced the Government will provide an initial €1.4bn to a local IT company to cover its legal costs.

It comes after the company’s parent company, Infosys, was found to be illegally misclassifying employees.

Infosys was already facing an investigation by the European Commission, but the new scheme will help cover costs related to the investigation and the subsequent closure of the company.

In a statement to The Irish Post, Mr Kenny said the Government would be supporting the firm’s legal costs through its legal assistance fund, and would also provide the company with an additional €1,000 in support of the investigation.

He said the fund was intended to provide financial assistance to firms whose actions have been identified as unlawful by the Commission.

Infosec firms were identified as having unlawfully misclassified workers, or who engaged in “deliberate and/or systemic misconduct”, by the EU’s Competition Authority, in December.

A total of 31,000 employees are now on the Commission’s blacklist.

Mr Kenny said it was important that the Government recognised that Irish IT companies were a key source of economic activity in the Republic and that the government was determined to address the situation.

“This is a critical moment for Irish businesses and Ireland, as a nation,” he said.

“Our commitment to the Irish IT sector will continue to be at the heart of our efforts to promote economic growth and employment for the Irish people.”

Infosies management is also facing a possible fine from the European Union, which has been calling for the firm to be sanctioned for its role in the IT blacklisting.

A spokesman for the EU Commission said the case highlighted the need for the European Competitiveness Fund to be reformed to ensure it is sufficiently transparent.

“As well as the Commission itself, the European Investment Bank and the European Banking Authority are also called upon to take action on the matter,” the spokesman said.

Infoserys has been ordered to pay a fine of up to €3.2bn by the Financial Services Authority of Ireland, the Irish regulator.

It has also been ordered by the courts to pay back €1 billion in damages and penalties to the company and its employees.

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