asked the Minister for Labour if he has undertaken any review of redundancy laws and practices with a view to reducing the attractiveness of redundancy to employers and employees; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Redundancy Laws.
40.
I have not undertaken any review of the redundancy payments Acts of the nature indicated in the question, which I consider to be based on a false premise that the Acts operate to make redundancies attractive to employers or to employees. I do not accept that to be the case.
So far as employers are concerned, the position is that the provisions of the Acts require employers who declare employees redundant to meet a substantial portion of the statutory lump sum payments themselves. Such employers are, of course, also obliged to comply with the provisions of the Minimum Notice and Terms of Employment Act, 1977, and the Holidays (Employees) Acts, which may involve them in other payments to the employees.
So far as employees are concerned, the position is that the redundancy payments Acts provide that they will receive basic payments in compensation for their loss of jobs and in recognition of their periods of service with their employers. The amounts of statutory redundancy lump sums are not set at levels which would make it worthwhile for workers to trade their jobs in a situation where the prospects of finding other employment are uncertain to say the least.
The Deputy may have in mind cases where workers are induced to accept redundancy by offers of substantial amounts of extra-statutory lump sums. Such payments are, of course, a matter entirely for negotiation between employers and workers, in which I have no function. I am sure the Deputy would agree that it would not be appropriate for the Minister for Labour to interfere in the free collective bargaining process in relation to this or any other matter.
Will the Minister agree that though this problem can arise out of collective bargaining we should discuss with the trade unions the possible contribution of the present redundancy regime to our acute unemployment problem? Will the Minister, in trying to create a better environment for maintaining and creating employment, undertake to have discussions with the trade unions to see if there is any element exacerbating unemployment as a result of the redundancy regime?
I can answer "yes" to those questions but I should like to make it clear that there is a distinction between the redundancy Acts. I am not too sure if I have a role to play. The redundancy Acts are there to provide employees who lose their jobs, often at short notice, with a minimum of basic rights. That amounts to a half week's pay for each year of service between the ages of 16 and 41 years and one week's pay between the ages of 41 and 66 years, which is the old age pension age, plus one week's pay in every case. They are basic minimum rights. I do not propose to amend the Acts or consider reviewing them but I accept that in regard to extra-statutory lump sums some of them are so large that workers would rather accept them than hold their jobs. That is outside the ambit of the redundancy Acts but there is an argument that perhaps it causes the loss of jobs.
I am encouraged by what the Minister has said. Is he aware of the many instances in recent years where viable jobs have been done away with because of the dangling of a tax free lump sum in front of workers who within 15 months or two years are living in poverty? Is the Minister aware that many workers who accept such substantial lump sums are advised to spend the money fast and before their 15 months unemployment benefit runs out so as to qualify for unemployment assistance? Will the Minister accept that there are huge incentives for people to be spendthrift with such money in order to qualify for unemployment assistance? Has the Minister any reform in mind to overcome this problem?
I would like to hear the Deputy acknowledge that we are not talking about a repeal or a review of the redundancy Acts.
Absolutely not.
I accept that we should look at some points in regard to this matter. Without naming the companies, I have been publicly and controversially involved with two major companies in the last 12 months because I felt that the attractiveness of the large lump sums froze and lost jobs for ever more. I am against that practice and agree that it is an issue I could usefully pursue with the social partners. I do not know if I would have any success but I will be glad to pursue it.
Will the Minister agree that the Congress of Trade Unions, and trade unions in general, have as much interest in maintaining and creating employment as political parties have and that now is a good time to consider possible reforms in practices as well as laws? This does not relate to statutory redundancies but relates to the terrible temptations put in the way of workers. They may grab for short-term gain but at a significant long-term loss.
Yes, that is a good point to make in relation to extra-statutory lump sums and I will pursue the matter.