Local Government (Superannuation) (No. 2) Bill, 1979 [Seanad]: Second Stage.

Minister of State at the Department of the Environment (Mr. Fahey)

I move: "That the Bill be now read a Second Time."

The purpose of the Bill is to provide that the superannuation conditions of employees of local authorities and certain other local bodies will be regulated by superannuation schemes. At present these superannuation conditions are set out in enactments, principally the Local Government (Superannuation) Act, 1956, with the result that any changes in superannuation conditions can only be effected by way of amending legislation. This means that improvements in pension conditions, which have been agreed with staff interests and may be needed to avoid hardship, must be postponed until the legislative process is completed unless, as an alternative, local authorities are authorised by the Government to introduce the improvements in anticipation of amending legislation. The latter alternative has been followed under successive Governments but I think the time has come to put matters on a more secure basis. The present Bill will enable changes in the conditions to be dealt with in future by statutory schemes supplemented where necessary by regulations.

The change to the system of superannuation schemes was recommended by a working party representative of employer and employee interests set up by the then Minister for Local Government in June 1976 to carry out a general review of the superannuation arrangements applicable to local authority employees. The working party furnished their recommendation in an interim report in June 1977 in which they also recommended a number of significant improvements in superannuation conditions which were accepted by the then Minister and were subsequently implemented by the incoming Government. As the House is aware, procedures for the setting out of superannuation terms in statutory schemes rather than in legislation are already in operation in the public service generally, including the Army and Garda Síochána, and in the case of the secondary and national teacher and it is also being applied in the case of civil servants by way of the Superannuation and Pensions Act, 1976. The Bill, therefore, is essentially an enabling measure in line with the recommendations of the working party under which the more flexible approach to the administration of superannuation benefits already in operation in the civil service can be extended to local authority employees.

Section 2 is the most important section in the Bill and will enable the Minister for the Environment, with the consent of the Minister for the Public Service, to make schemes setting out the rules governing superannuation conditions. It will also enable the making of amending schemes. Thus, it will not be necessary to go through the elaborate procedure of legislation every time it is found necessary to introduce changes or improvements in the superannuation code, although under a later provision, in section 5, every scheme must be laid before both Houses of the Oireachtas and may be annulled by resolution of either House. Initially, schemes, together with regulations made under section 3, will provide retrospective authority for improvements already introduced. The ultimate aim is to have a comprehensive or consolidated scheme or schemes containing all the pension terms relating to local authority employees and on the making of such consolidated scheme or schemes the existing superannuation enactments will be repealed under section 11 of the Bill. As and from that time, future changes found necessary in the superannuation code will be effected by amending schemes.

It will obviously not be possible to move immediately from a situation where all pension conditions are governed in detail by statutes to one where all will be regulated by schemes. A transitional period will be necessary during which the necessary changes will be made. During this period conditions will be regulated partly by statutes and partly by schemes. To facilitate these transitional arrangements, section 3 will enable the Minister for the Environment, with the consent of the Minister for the Public Service, to make regulations to amend or repeal the enactments which are listed in the First Schedule to the Bill or any statutory instrument made thereunder. These regulations may be made only in the period between the passing of the Bill and the repeal of the existing enactments which will be effected when section 11 is brought into operation. In other words, they may only be made in the interval before the consolidated scheme is made and are, in effect, a transitional device to provide retrospective authority for improvements already introduced and facilitate the making of the initial schemes in the interim period before the repeal of the existing enactments. Under subsection (3) there is provision for the making of regulations extending the list of enactments contained in the First Schedule to the Bill if this should prove necessary. This provision is essentially precautionary but since it would involve an extension of the scope of the First Schedule, subsection (5) provides that regulations effecting such an extension must first be laid before each House of the Oireachtas in draft from and would require the positive approval of each House.

Under subsection (9) of section 2, the present position whereby the local authority superannuation code also applies to employees of health boards is being continued. In the subsection there is also a provision under which other health bodies administering public health services may be brought within the scope of the Bill if they are so designated by the Minister for Health with the consent of the Minister for the Environment. In addition, sections 7, 8 and 9 of the Bill provide for the continuance of the position whereby the local authority superannuation code may be applied, with or without modifications, to the employees of certain other statutory bodies.

As a general principle, superannuation awards are made in respect of pensionable service. However, under section 4, regulations may provide for the granting of retirement gratuities in respect of non-pensionable service in appropriate cases. Section 6 provides for the saving of pension rights under existing legislation. Taken in conjunction with subsection (4) of section 5, it provides that where changes are being made in superannuation conditions, an employee other than a newly appointed employee will have the right to exercise an option to come under such new superannuation conditions or, alternatively, to decide to remain subject to his existing conditions if he deems these to be more favourable in the circumstances of his particular case. Section 12 includes provisions relating to the commencement of certain sections with retrospective effect. This is necessary in order to ensure that retrospective effect can be given to the improvements in superannuation conditions already referred to.

I commend the Bill to the House.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): As the Minister of State has told us the purpose of this Bill is to provide that superannuation conditions of employees of local authorities and certain other local bodies will be regulated by superannuation schemes. I emphasise “will be regulated by superannuation schemes.” Now, if that were exactly what the Bill proposes to do, and to do it in future, it has a lot to commend it. However, having regard to our system of parliamentary democracy and having regard to the necessity for all payments of public moneys to be made with statutory authority, or with the authority of this House, the Bill is an alarming one. It is a Bill which would shock any parliamentarian.

For example, it is stated, in section 12 of the Bill, that sections 2, 3, 4, 9 and 10 of the Act shall be deemed to have come into operation on such day or days prior to the passing of this Act as may be fixed therefor by order of the Minister. It would have been quite possible for the Minister to have written into that section the date on which these various sections would come into operation but I am not surprised that he did not do so. I believe that, in fact, these sections will be deemed to have come into operation several years ago.

Let us have a quick look at what is involved in sections 2, 3, 4, 9 and 10 which will be deemed to have come into operation on some day prior to the passing of the Act, as the Minister may decide. I repeat that some of them will be deemed to have come into operation several years ago. Section 2 confers power for the making of superannuation schemes, that is, schemes to grant pensions, to pay lump sums. Section 3 confers power to amend existing superannuation schemes. Section 4 confers power to award gratuities to non-pensionable officers. Section 9 confers authority to amend the Local Government Services (Corporate Bodies) Act of 1971 and section 10 confers authority for the payment of expenses and for the payment of pensions and gratuities.

The fact of the matter is that these superannuation schemes are being operated without any statutory authority of any description, and that these pensions and gratuities have been paid—that the schemes which we are now giving authority to amend have long since been treated as having been amended. The gratuities to non-pensionable officers which we are now asked to give authority for granting have long since, I am sure, been granted. I am also sure that the Local Government Services (Corporate Bodies) Act of 1971 has been treated as having been amended some considerable time ago. Of course, the payment of expenses and of pensions for which section 10 of the Bill grants authority has long been made. That is an alarming state of affairs. I do not doubt for one moment that what we are being asked to validate now are all admirable provisions and all payments and pensions that have been carefully negotiated between the managerial side on the one hand and the staff side on the other. But the principle involved is shocking and the precedent which has been established is frightening as to the future. We are establishing here a precedent whereby, without any statutory authority, just because it is inconvenient or too cumbersome to validate these by way of a general Act, these things have been done in the past without any authority from anybody. Parliament are now asked to validate them and to give legal effect to them.

This Bill which we are now asked to pass, in my opinion, could be best described as a blank cheque for the future and a general absolution for the past. Section 2 states:

Without prejudice to the generality of subsection (1) of this section, a scheme under this section may have retrospective effect.

Certainly that would frighten an oldtime parliamentarian but when one looks at the measure it is obvious the provision is necessary to regularise the irregularities that have taken place for a number of years. This is a well-drafted Bill for the purpose for which it was introduced. Section 12 provides that the all-important sections, Nos. 2, 3, 4, 9 and 10, will come into operation at such time in the past as the Minister decides and section 11 will come into operation on such date in the future as the Minister decides. Section 11 repeals all the Acts we are working under at the moment but which do not do the job which they have been used to do. They will continue to be used until the Minister gets the other sections into operation.

This Bill is a classic example of how public business should not be done. It is an invitation to public servants and to people in public life to become careless. It is an invitation to civil servants and to local authority employees to take matters for granted, to take the attitude that it is all right to do certain things because authority will be given in the future to cover them. What is the real value of the local government audit system? A local government auditor is charged with seeing that everything is in order with regard to payments and so on, and he will have to close his eyes to many matters as a result of the provisions in this Bill. It is putting people on the slippery slope and I deprecate in the strongest terms what is happening.

I realise that there have been dramatic changes during the years. I know that if we do not authorise or approve certain measures people will be left without money or without pensions but surely a Bill of a temporary nature could have been introduced. Two major measures, the Local Government (Superannuation) Act, 1948 and the Act of 1956—neither of which was passed during a Fianna Fáil administration—were the last major measures on this matter. Since then we have had the five-day week which created a substantial problem for local authorities because they had to count up the number of days an employee worked during the year and decide whether he had worked enough days to qualify for a pension. In order to operate that they had to make many assumptions. When the working week was reduced they assumed that the officer would have worked on the sixth day if it had been a six-day week even though he might not have done so. The local authority had to make this assumption or else they could not have operated the scheme. The schemes we are dealing with now are being operated on a hit-and-miss basis. When the marriage ban was lifted, another problem was created for the local authorities and they have operated on all kinds of assumptions.

I am spokesman on the environment for one of the Opposition parties and it is necessary for me to state the situation as I see it. What happened before should not recur. As I said, how can a local government auditor audit the books of a local authority if he takes on the job with the attitude that a whole category of payments have been made without authority with somebody hoping that future legislation will cover the matter? Perhaps he reports on the matter with a reservation that what has been done is wrong but with the hope that matters will be rectified. The whole position is wrong.

I should like the Minister to deal with this aspect. The Minister has told us the Bill is the result of the efforts of a working party that had been set up before his Government took office. The report was delivered to the Minister's predecessor in 1977, about the time the Government changed.

Debate adjourned.

Dáil Éireann debate - Thursday, 17 Apr 1980