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Dáil Éireann debate -
Thursday, 4 Jul 1991

Vol. 410 No. 4

Payment of Wages Bill, 1991 [ Seanad ]: Committee Stage.

SECTION 1.

I move amendment No. 1:

In page 4, subsection (1), line 32, after "gratuity" to insert "or other payment".

It is proposed in this amendment that the words "or other payment" be inserted in the definition of "wages" in section 1, the definition section. The section states:

Provided however that the following payments shall not be regarded as wages for the purposes of this definition:

(i) any payment in respect of expenses incurred by the employee in carrying out his employment,

(ii) any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office,

I propose that in paragraph (ii) the words "or other payment" be inserted after the word "gratuity".

I have proposed this amendment because the FIE have expressed some concern that the definition as currently contained in the Bill may give rise to some problems. The FIE in their submission say that section 1 (1) (a) (ii) should include the word "payment" as well as the words "pension, allowance, or gratuity" as the sum may be negotiated in relation to retirement which does not fit into any of these wordings but which is of the same general category. They suggest that a negotiated payment agreed by the employer to be paid on foot of certain circumstances relating to the resignation or retirement may not fall within the heading of gratuity, but such payments should not be construed to be wages for the purpose of the legislation, and as it is a widespread practice on termination of employment to make one payment normally by cheque covering all outstanding moneys due, they strongly suggest that compensation for holidays not taken at the date of termination and pay in lieu of notice should be treated in the same way as any payment referable to the employees' redundancy. They suggest that this should be included in a separate paragraph and this is covered by amendment No. 2 in my name.

I am not sure if amendment No. 1 involves just a semantical difference and it may be that the amendment is not strictly necessary. However, as one of the social partners has raised this issue I felt that I should bring it to the floor of the House and give the Minister an opportunity to respond to it.

I wish to thank Deputy Shatter for the spirit in which he made his contribution. We have examined the FIE submission and in our view amendment No. 1 is not necessary. I expect that an example of the type of payment that the FIE have in mind is payment to an employee on foot of an agreement that the employee would not open a competitive business in the same area as a particular person, which often happens on the break-up of a partnership or some similar arrangement.

The definition of wages divides payments into three categories: first, those comprising wages which are specified in paragraphs (a) and (b) of the definition of "wages", second, those payments listed in paragraphs (i) to (v) but which are specifically excluded from the definition of "wages" for the avoidance of doubt; and third, all other payments, in other words, those which are not wages and which are not likely to be mistaken for such. The type of payment which Deputy Shatter's amendment deals with is the third type. If Deputy Shatter's amendment was accepted, and Deputy Shatter has said so himself, it would not put beyond doubt the question of whether such contractual sums are wages and it could be open to the interpretation that these and other sums might well be regarded as wages but for the exclusions in the Bill. For that reason I do not propose to accept the amendment.

In the context of the Minister's reply, let me say that it is not my intention to push the matter unduly. However, it appears to me that the FIE have a valid concern in this area and in the light of the fact that I will be withdrawing the amendment I would ask that the Department consult directly with the FIE to satisfy them about the matter and that we might come back to this at a later stage should we need to. I ask the Minister to consider it in that light. I do not intend to press the matter unduly.

Amendment, by leave, withdrawn.

I move amendment No. 2:

In page 4, subsection (1), between lines 36 and 37, to insert the following:

"(iv) any payment referable to the termination of the employee's employment,".

Having given the reasons for raising amendment No. 1, I started incorrectly to go into the the reasons for amendment No. 2. The FIE have made the point that as it is widespread practice on termination of employment to make one payment normally by cheque covering all outstanding moneys due, compensation for holidays not taken on the date of termination and pay in lieu of notice should be treated in the same way as "any payment referable to the employee's redundancy" as in section 1 (1) (iii). They suggest that all these areas should be included in a separate paragraph and they suggest "any payment referable to the termination of the employee's employment" should replace subparagrph (iii) and should also cover ex gratia payments on termination of employment by the employer which did not fall into the category of redundancy, retirement or resignation”. Rather than proposing replacing subparagraph (iii) by the FIE wording, it occurred to me that a better way to deal with the matter would be to insert a new subparagraph in the section and I quote: “(iv) any payment referable to the termination of the employee's employment” and exclude such payments from the concept of wages as defined in the subsection.

This would not do any damage to the Minister's intentions but would address the concern that has been expressed. Again, I am raising the concern that the FIE have expressed and I would be interested to hear the Minister's response to it in the context of the working of the Bill and whether he would be willing to take this amendment on board.

The effect of the amendment appears to be the removal from the definition of wages of payments in lieu of notice. In the meetings we have had with the FIE we have referred to what has happened in the United Kingdom under the similar Wages Act, 1986. That Act remains silent on whether such payments are or are not wages. The result has been that hundreds of cases have been brought annually before the Industrial Tribunal regarding final payments on terminations of employment, as employers used final payments to make indiscriminate deductions.

A major problem for the British Industrial Tribunal was to decide whether payments in lieu of notice were to be considered as wages within the meaning of the legislation. Some tribunals determined that they were and went on to hear the complaints but others determined that they were not and refused to hear the complaints. When we were examining this issue a few months back, the British experience led me to the conclusion that our legislation would have to be unambiguous on the subject so as to avoid these hundreds of cases that are still going through the British tribunals. This explains why payments in lieu of notice are to be considered as "wages" within the meaning of the Bill. I decided to include them in this definition because such payments are moneys which the employee would have earned as wages had he worked out his notice. I think they are rightly considered as wages.

I have also included them so as to discourage employers from making unfair deductions from the final payment in the knowledge that the payment could not be open to an examination by a Rights Commissioner. This was my main concern because if this payment was in the category of exclusions, an employer could use the final payment to make excessive or unfair deductions which would not be open to any kind of examination afterwards. That is why we came to that conclusion, and I think the Deputy will understand why I cannot accept his amendment.

I appreciate the Minister's explanation. As one of the social partners had raised this issue I felt it was important to give the Minister an opportunity to respond to it and in the light of the Minister's explanation I am quite happy to withdraw the amendment.

Amendment, by leave, withdrawn.
Section 1 agreed to.
SECTION 2.

I move amendment No. 3:

In page 5, subsection (1), between lines 30 and 31, to insert the following:

"(g) by transfer or other mode of payment to an account specified by an employee in a credit union,".

I am conscious that we had the lengthy debate about the pros and cons of workers having to go through the banking system and pay the charges levied on cheques and accounts. We must be aware that huge numbers of people are involved in savings and loans with credit unions. The Bill mentions banking institutions, post offices and trustee savings banks. The Fine Gael spokesperson claimed that all blue collar workers have banking accounts, but this is not a fact. Since the Bill deals with manual workers and will have a knock-on effect on the ultimate value of their wages, we should consider the institution with which they deal in the main, namely, the credit union. It has been said that credit unions are not big players among the financial institutions but it is important to note that the Irish League of Credit Unions has 1.2 million members, which is a very large number, given our small population. I would argue that a substantial number of those members would be manual workers.

Credit unions have about £800 million in savings with the Irish League of Credit Unions and £600 million is advanced in loans on an annual basis. Their investment of about £200 million is of value to the State and they have an annual turnover of billions. Savings protection reserves amount to £80 million. Credit unions play a major role in Irish life, perhaps especially in the case of manual workers. The Minister has accepted to some degree the argument that there should be a specific mention of the role of credit unions. He said that it is possible to have money paid direct to a credit union and an agreement is reached with an employer, this is another option. I am told that the credit unions structure is such that they will accept the transfer of wages into a member's account and this should be written into the Bill. I believe the Minister will support this notion. He has said that because of the high level of bank charges not every employee could decide to open a current account in a banking institution. The amendment could be accepted without undue problems.

I agree with everything Deputy Byrne says with regard to credit unions. They have for many years played an increasingly important role. Credit unions now provide a far more acceptable form of banking than the main banking institutions, providing a more customer conscious service. They were set up with the aim of providing a service for the community rather than a service to maximise profit from the work done for customers who require their assistance. There is an entirely different ethos between the banking system and the credit union movement. Banks are entitled to make profits, but they should be competitive. In our type of economy there is far too little competitiveness between banks. Large numbers of people who currently use the banking system might be better served by using credit unions and they should be encouraged to do so.

My understanding of section 2 is such that this amendment is not necessary. My reading of section 2 (1) (f) leads me to understand that an employee who wants payments made directly to a credit union account can so request. It is provided that wages may be paid by a credit transfer or another mode of payment whereby an amount is credited to an account specified by the employee. My understanding is that the Bill is designed to allow an employee to direct his employer to pay his wages into a credit union account which he maintains. I would encourage employees to use the credit union system and I would urge those who do not currently have credit union accounts to open them. Most communities now have a credit union and there are inhouse credit unions in major industries. Within my constituency a number of credit unions are operated. I have had a lot of contact with Rathfarnham Credit Union and the headquarters of the credit union movement is situated in my constituency.

Widespread use of credit unions by employees who direct their wages to be paid directly into credit union accounts will force the banks to reduce charges and to facilitate customers with regard to hours of business. Current banking hours do not allow people who work from 9 a.m. to 5 p.m. to use bank facilities. Banks have designed their opening hours for their own convenience rather than the convenience of their customers. That has happened because of the lack of competitiveness. If following the enactment of this legislation there is a widespread use of credit unions by employees who to date have not been using them and if it is arranged that wage transfers be made to credit unions rather than bank accounts, the major banks will be required to examine the level and type of service they provide.

I agree entirely with the sentiments Deputy Byrne has expressed, but I do not believe the amendment is required because section 2 (1) (f) adequately addresses the matter.

On Second Stage Deputy Brian Hillery made a very interesting contribution. He saw this legislation as a means of closing the gap between the blue collar and white collar worker. He said that the Bill would promote greater contact between manual workers and financial institutions. I thought that remark a little patronising and I still hold that view. It was as though the Minister was doing the manual worker a great favour by giving him access to these awe-inspiring financial institutions. Deputy Byrne's amendment would go a long way to ensuring that people who have been described as blue collar workers have access to a system with which they are familiar and where they do not feel under a compliment. It is extremely sensible.

Deputy Shatter identified another area where it is going to be an advantage to the worker, that is, the hours of opening. At the moment it can be said the banks do not actually cater for the ordinary working man or woman. There is no way you can get your cheque cashed in a bank on a Friday evening, for instance, or whatever the case may be. The credit union could provide the necessary service. I do not see why the Minister cannot take this amendment on board; maybe he will. He has not yet indicated his intention.

I have been a member of a credit union for many years, since its foundation. The credit union movement has provided a service. It has filled a void. Many people felt the banking system was intimidating and for that reason did not become involved in it. An added consideration is that the cost of banking has put it beyond the reach of ordinary working people. The charges for service are outrageous and until something is done about this and the Minister for Finance takes it in hand people will be at a disadvantage. I support the amendment. I will be interested to hear if this matter is already catered for within the Bill. If so I will be happy to go along with that, but Deputy Byrne has been quite specific and I think what he advocates is the right course.

I urge the Minister to accept this very reasonable, acceptable amendment. It is necessary that the credit union movement be incorporated in a Bill of this nature. I do not like the tags of "blue" or "white" collar, but the credit union movement is the only banking system many workers know and understand. The banking system would not even accept them. I have known of people in the place where I worked in Cork whose cheques the banks refused to handle and the people had to resort to the credit union to cash their cheques because they had no accounts in the banks. Over the years the credit unions have shown what they can do and how they can utilise their funding to the advantage of the community to which these workers belong. They are much more at ease transferring their cheques through the credit union than they would be in doing so through the banking system.

As Deputy Toddy O'Sullivan said, banking opening hours are very limited. I accept that the Trustee Savings Banks have shown great flexibility in their working hours, but until the credit union movement took up the cause of working class people the banks did not even want to know about them and people had to tailor the cashing of their cheques to the bank opening hours. If the provisions of the amendment are not included in the Bill already — from my reading of it I do not think they are — I urge the Minister to accept what I consider a very reasonable and good amendment to the Bill.

I acknowledge the points that have been made by the Deputies on Deputy Eric Byrne's amendment. We had some discussion on this on Second Stage and I too would like to be associated with acknowledging the good work done nationally by the credit union movement and its difference from other banking services. It is community based and undertakes an excellent function.

The arrangement proposed in this amendment is, as has been pointed out already, permitted in section 2 (1) (f) which provides that wages may be paid by "a credit transfer or other mode of payment whereby an amount is credited to an account specified by the employee concerned". The provision is drafted to be sufficiently broad to encompass the lodgment of wage payments to a credit union. We have taken into account Deputy Byrne's views expressed on Second Stage. It could be a credit union or a building society or some other organisation, provided the account concerned is nominated by the employee involved. That would be the determining factor in this. This being the case, in the light of the points Deputy Byrne made on Second Stage his very well intentioned amendment is unnecessary because its provisions are covered in paragraph (f). As this legislation develops and we move away from cash, I hope the number of people, particularly those who have savings accounts and deductions from their payroll through credit unions — as one fairly large company in my constituency has — will increase and this area will expand.

I must confess I anticipated that type of response. I am aware of section 2 (1) (f) but let me ask the Minister if he will consider, for example — it may not be in order but if so I am sure the Ceann Comhairle will tell me quickly enough — inserting even the words "credit union" after "employee concerned" and thus include credit unions. My concern is that the Bill as structured will be read by employers and trade unions and they will be thinking in terms of the banking institutions as they are. There are 410 credit union branches spread throughout the country. A cursory glance at the list reveals that BTE have one and I know the TUI and the ASTI have them, so there is a direct relationship between the trade union member if it is the TUI or ASTI, who are dealing regularly with their own credit union, and employees of BTE. Direct financial dealing is going on all the time between them. Therefore, it seems logical and very easy to encourage both trade unions and employers to transfer the salaries of their workforce into credit unions. I cannot swear to it but surely some of the major companies such as Guinness have credit union branches. A little extra push is all that is necessary to give recognition to the credit unions.

I am aware that it is difficult at the moment to make cash withdrawals from credit unions on the traditional banking system. They are building in high technology and they are very keen to develop rapidly. Where current account systems are not already in existence the intention is to introduce them in the near future enabling members to use credit unions as they would a savings bank or other banks. There are little technical difficulties at the moment but they are on the verge of being overcome.

It has been pointed out that a credit union is ideally suited to the vast bulk of workers affected by this legislation because the opening hours are far more socially acceptable to workers than are the banks' opening hours. It is important that we do not drive workers into the clutches of bankers who then would gain on the double from this legislation, first by getting far more customers who are transferring from cash payment to other modes and then the more extra customers they attract the more bank levies, bank charges and profits the banks will make. The banking institutions will gain under a second heading by overheads being reduced, because presumably the insurance coverage and the cost of transferring large sums of cash from banking institutions to building sites will be diminished. The workers who will be forced to use the banking services — and we will come to this in greater detail later in the Bill — will be net losers. I would ask the Minister, to accept, if at all possible, the words "including credit unions" even under the provisions of paragraph (f) which would read:

A credit transfer or another mode of payment whereby an amount is credited to an account specified by the employee concerned including credit unions.

It is my experience, as has been pointed out by other speakers, that banks do not really want to deal with the worker who goes in to cash a cheque. By virtue of my background as a building worker I am aware that building workers and manual workers have often been insulted because of a bank's refusal to honour employers' cheques because those workers did not have a bank account there. I do not think we should encourage workers to deal with these institutions when there is the prospect of an excellent alternative banking system being available through the credit unions. I would ask for some commitment from the Minister to include "credit union".

I too would like to acknowledge the role of the credit union in the development of Irish society and particularly in rural Ireland. They have made a major contribution to the development in the fabric of life that exists there. I agree with the Minister that the amendment is unnecessary as the Deputy's request is covered in paragraph (f). The difficulty is that if we were to include credit unions we would have to name a number of savings institutions.

I acknowledge Deputy Byrne's point. I want to make it clear that under paragraph (f) credit unions and also building societies, savings banks, trustee savings banks and other groupings can be availed of. They are becoming far more flexible and, as I said on Second Stage, as technology moves ahead more competition will be involved in these areas. I acknowledge the point made by Deputy Byrne that there are difficulties with some banks but they are also moving to a far more flexible stage because of competition from others. It is not appropriate to add credit unions to paragraph (f) because if so a question would be raised as to why the others were not being added. If we added credit unions we would certainly have to add the various forms of savings banks: trustee savings banks, building societies and different cashing arrangements. For the record of the House the understanding of the Minister of the day is that paragraph (f) provides clearly that an employee may use the facilities and the benefits of the credit union to have their money transferred from an employer. I think that makes it clear for the record.

I will not press the amendment. It is on the record that the intention is to cover credit unions.

Amendment, by leave, withdrawn.

Amendment No. 4 is in the name of Deputy Shatter. Amendments Nos. 5 and 6 are alternatives. I am suggesting, therefore, that amendments Nos. 4, 5 and 6 be discussed together, is that satisfactory? Agreed.

I move amendment No. 4:

In page 5, subsection (1) (h), line 34, to delete "Minister for Finance" and substitute "relevant trade unions and employers organisations".

Section 2, which we are discussing in the context of these amendments, provides for the various modes of payment of wages. Having gone through the various modes that apply in practical terms under our current financial systems and arrangements, the provision has an allembracing clause, paragraph (h), which states, in relation to the payment of wages, that:

any other mode of payment standing specified for the time being by regulations made by the Minister after consultation with the Minister for Finance.

The Minister has said rightly that technology is changing rapidly. Within a very short time there will be other methods of making payments that may not be covered by the specific references contained in section 2 (1). I suspect that in the not too distant future the concept of a cheque will be regarded as about as relevant to modern financial dealings as the unfortunate extinct dinosaur is relevant to the animals in the world of today. We are heading into an entirely new area. All of this will work only in the context of the way in which the various financial institutions and the banking system, through to the credit unions and retail outlets agree to designate the transference and the acceptance of moneys.

The Payment of Wages Bill is the product of a general agreement that has been reached as between the social partners. There are minor disagreements between Congress and the employers with regard to certain sections in the Bill but, in principle, all social partners are now agreed on the need for this legislation. The Minister has adopted a consultative rather than a confrontational approach, which is to be commended. He consults with the various groups throughout the economy and in particular with the relevant social partners, in the context of wages, to whom the legislation to be enacted will apply.

I was a little puzzled by paragraph (h). It is accepted that new modes of payment be taken on board by way of regulation rather than having to wait for time in this House to amend the legislation, but it seems that as the Bill is drafted the only person who needs to be consulted is the Minister for Finance. I cannot for the life of me see why it is the Minister for Finance who should be consulted about the type of order a Minister for Labour should make with regard to modes of payment of wages. The Minister for Labour is the relevant Minister in Government who deals with this area. Somewhere down the line there may be a Minister for Labour who does not believe in a consultative but in a confrontational approach and, indeed, there may be a Minister for Finance and a Minister for Labour who believe in a confrontational approach. It seems to me that a Minister for Labour who deems it desirable that other modes of payment be taken on board should not have to consult with the Minister for Finance exclusively. Presumably the Minister for Labour would bring a proposal to Cabinet and Cabinet would then agree to the proposal. It may be that the Minister for Finance in Cabinet may not want to go along with it but the Minister for Finance may be overruled in Cabinet by his colleagues and by the persuasive arguments of the Minister for Labour. We know that the present Minister for Labour, in his own modest way, can be a very persuasive personality and may, perhaps, go about things in a somewhat different way to the current Minister for Finance.

I would not want this to be interpreted as meaning that a Minister for Finance, for example, might have a veto on the use of new technology in the context of modes of payment. Although the Act does not give him a veto when he talks about consultation, behind the scenes in Cabinet it may be regarded as something that should not be done if the consent of the Minister for Finance is not forthcoming to taking on board a new mode of payment to which all the social partners were agreeable. It is my proposal that the Minister for Labour, should not, on the basis of how the Cabinet is supposed to operate, give some sort of special role or recognition to the Minister for Finance in this matter. The regulation should be made by the Minister for Labour but only after consultation with the relevant trade unions and employers organisations. I propose that we delete the reference to the "Minister for Finance" and insert instead "relevant trade unions and employers organisations". I think I am right in saying that Congress have expressed views on this and that they are anxious to have it included. Although I do not think it is in the FIE submission, I presume that they would also like to be consulted with regard to the implications for employers as a result of the Minister adopting a new mode. Of course, in some instances the relevant employers' organisations might not be covered by the FIE so I have not simply referred to the Irish Congress of Trade Unions and the Federation of Irish Employers, as Deputy Byrne has, although there is a similarity between my amendment and the amendment tabled by Deputy O'Sullivan.

I am conscious that there can be a degree of disharmony within unions and that there are still unions outside Congress. It may be necessary, particularly if the regulation here affected a particular sector with which Congress — for reasons which may be unrelated to this issue — had difficulties outside of Congress to put an obligation on the Minister of the day to consult the relevant trade unions and employers' organisations. I do not see why the Minister for Finance should be given a special role in this. It is a bit like the role we gave the Catholic Church until 1972 when we had a referendum on the issue.

I hope the Minister will consider taking this amendment on board in the spirit in which it is meant. I fully accept that the Minister would have consultations in regard to these regulations. Indeed if I had the good fortune to be sitting in his seat — and he had the ill-fortune to be in Opposition — it would also be my view that there should be consultations. However, there is a lacuna in the legislation in that the only obligation to consult applies to the Minister for Finance, who is the least relevant person in all this. The obligation to consult should rest with the social partners. I hope the Minister will accept my amendment.

I compliment Deputy Shatter on his remarks. The legislation relating to methods of payment of wages goes back to 1464, it was upgraded in 1743 and again in 1896. It is impossible to say what will happen in relation to payment of wages in the future because technology is moving at such a rapid rate. There is talk about a cashless society; in its simplest form this can be seen in the arguments against paying cash on the buses.

Section 2 (1) provides that wages may be paid by cheque, paying order, credit transfer or in cash. The Minister may add to this list by regulation. Given the insecurity of future methods of payment, it is important to accept our amendments. Relevant trade unions, employers' organisations, the Irish Congress of Trade Unions and the Federation of Irish Employers should be consulted. I will not labour the point, but if regulations are to be made in consultation with the Minister for Finance, equally the rights of the workforce affected by the change should be taken into consideration. The Irish Congress of Trade Unions are the appropriate body with whom to have consultations as they represent most of the organised workers.

The three amendments are seeking to ensure that a consultative process will be developed to cope with the growth in technology in methods of payments. I do not put the same emphasis on consultation with the Minister for Finance as Deputy Shatter because throughout many Bills there is provision for various Ministers having to consult the Minister for Finance. There are ample precedents in this regard and it is not unique to this Bill. When there are financial implications there must be consultation between the appropriate Minister and the Minister for Finance. For that reason I do not have an objection to it as the provision has not worked to the detriment of people in other Bills.

If there is a change in the methods of payment as a result of the growth of technology there must be safeguards by way of the consultative process between employers and trade unions. Some unions are outside Congress, but they should not be discriminated against because they are not affiliated to it. From time to time there are shifts within the representative bodies, including employers' organisations, and any changes must be catered for in the years ahead.

We considered in detail the proposals contained in these amendments. As Deputy Shatter said, it is acknowledged that I — and my predecessors from all parties — and the Department of Labour since its foundation have established a record in the matter of consultation with the social partners. It is now accepted practice by the employer organisations. The same applies to Congress; and, while there are not many groups outside Congress, there are different bodies with representative groupings who hold that position as well. The Department always have consultations regardless of what the Minister of the day might say. My concern about the proposed amendment arises not from an effort to avoid the normal consultations, which are routine in the Department, but from an interest in minimising the difficulties which can arise from statutory commitments to consult interest groups.

Deputy Byrne's amendment names the Irish Congress of Trade Unions and the Federation of Irish Employers as the parties to be consulted. As I have said, other employer groups may feel they should have a statutory entitlement to similar consultative arrangements. In most legislation nowadays, apart from a number of fringe bodies, the IMI, IPM and small business firms have to be consulted. Groupings such as the IBOA, the Garda representative body and the Army representative body, not to mention the MBU and others, also have to be consulted on major matters.

The amendments from Deputy Shatter and Deputy O'Sullivan take a broader approach but would be likely in practice to tie up any draft regulations in an unwieldy consultative process. The consultative process normally takes place but it can become much too unwieldy if it was written into legislation that all the trade union and employer organisations interested were to be consulted. Often when one tries to take action quickly, especially at this time of year when groupings — normally voluntary groupings — go on holidays and are not meeting, it can take months to receive replies to submissions. That is fine if the process is carried out in the normal course of events, but if it is laid down in Statute it would unnecessarily tie the hands of future Ministers for Labour who may not have the same relationships with these groups. I and recent Ministers have been lucky in having good relationships with these bodies but as Deputy Shatter pointed out this may not always be the case.

In addition to these practical difficulties there may be exceptional circumstances where it would be counterproductive to circumscribe the scope of the Minister of the day to make regulations by statutory requirement to consult employer and trade union interests. I am thinking here of cases of urgency or circumstances where broader objectives can be achieved only at some cost to sectional interests. That can happen from time to time. In addition, the amendments could lead to interest groups using any perceived failure by a Minister to consult fully and exhaustively, irrespective of the circumstances, as a basis for legal challenge to the regulations on procedural grounds.

Deputy Shatter raised the question of the Minister for Finance, and Deputy O'Sullivan has given a fairly good answer to that. The Minister for Finance, as the regulatory authority for all financial instruments, has a clear role in any such regulations. It is nothing more than that. The Minister for Labour must consult with him. He does not have a veto, and it is important that we understand that.

For the reasons I have stated it is not necessary to include these amendments. In all other legislation that I have passed it has not been written into the legislation that consultations take place with the social partners. It has been taken as good practice and a good working arrangement that this be done, not only by this Government but by a number of Governments over the last 20 years. It is was written into legislation it would have to be written in full, including all the different bodies, and this would create difficulties. Some bodies are not recognised by others and some do not accept the existence of others, but the Minister for Labour would have to recognise all of them. For that reason it is best to leave the matter stand. The present system has worked well over the years.

I omitted to ask the Minister whether it would be possible, by having such a provision, to avoid confrontation on the shop floor. Perhaps it would prevent people from going to the tribunal to resolve problems. If this provision is enshrined in this section it may avoid conflict further down the line.

That may be so, but as Deputies know, particularly Deputies dealing with the Labour brief, it is very much a matter of form to carry out checks. For example, as regards regulations that we introduce in any area, whether we are dealing with a matter at European level or local level, out of courtesy we consult the relevant officers of FIE and ICTU. By making this a statutory provision difficulties could arise if at some time a Minister has to take action.

I take Deputy Shatter's point that in 20 years time a Minister for Labour or a Minister for Finance might take a different view, but at that stage Ministers would have their own problems and they would be brought to heel.

What would be the position post PESP or if there is no programme in the coming years?

Even if there is no such programme I believe that consultation would take place. Some of the Deputy's colleagues, as Ministers for Labour over the years, have a very good record of consultation. It has been a practice within the Department at official level.

We are trying to convert the Minister.

I am already converted. I came from the employee side and had to be converted to the employer side. The balance is there and it is not necessary to write this provision into legislation.

Amendment, by leave, withdrawn.

I move amendment No. 5:

In page 5, subsection (1) (h), line 34, after "Minister for Finance" to insert ",the Irish Congress of Trades Unions and the Federation of Irish Employers"'.

Amendment put and declared lost.

I move amendment No. 6:

In page 5, subsection (1) (h), line 34, after "Finance" to insert "and trade unions and employer organisations".

Amendment put and declared lost.
Section 2 agreed to.
SECTION 3.

Amendment No. 7 in the names of Deputies Bryne, O'Sullivan and Shatter. Amendment No. 9 is cognate and amendment No. 8 is related. It is proposed therefore to take for discussion purposes amendments Nos. 7, 8 and 9 together. Is that agreed? Agreed.

I move amendment No. 7:

In page 6, subsection (2) (a), line 10, after "agreed upon" to insert "in writing".

It is important that this amendment be accepted. It is a very straightforward request. It would strengthen the legislation and would lead in the future to less confusion and to a clearer understanding of the legislation. There would be less industrial conflict as a result of this amendment. What we are requesting is that the words "in writing" be inserted after the words "agreed upon." The provision would then read: "continue to pay those wages to him in cash unless any other mode of payment specified in section 2 is agreed upon in writing by the employer or an organisation representative of employers." We believe it would be much better to have agreement in writing. It is normal practice when negotiations are taking place and a conclusion arrived at that minutes are put in writing. Agreements to transfer from payment of cash by employers should be recorded very clearly. This amendment seeks to make it clear that a change-over to non-cash methods of payment must be by written agreement as against verbal agreement.

I support the amendment. I believe there should be written agreement. It is a simple, straightforward amendment and I would ask the Minister to take it on board.

I also support the amendment and share the concern of the other Deputies.

I appreciate the concern of the Deputies in putting down these amendments. In other sections of the Bill such as sections 4 and 5 I am imposing obligations on employers to undertake in writing certain transactions with their employees. Section 4 provides for written pay statements and section 5 contains the requirement for written notification in connection with certain deductions and written receipts for certain payments.

However, in this instance I am disposed to the view that the parties to the agreement are those best qualified to decide whether agreement should be oral or in writing. In many cases I expect that a written agreement will be made. In other cases the parties concerned may come to an accommodation orally. I do not intend to impose the level of formality involved in drawing up a written agreement in every instance. If an employee wants a written agreement, the negotiating position as a result of the transitional provisions in the Bill is sufficient to allow him to make that arrangement with his employer. However, if both parties are satisfied with an oral arrangement, as is likely to be the case in many small employment areas, I do not intend to require otherwise by legislation.

The point with the transitional arrangements moving from the 1979 position is that if an employer wishes to get an employee to agree then the employer must obtain that agreement; the strength rests with the employee. If the employee does not like the suggestions or arrangments put to him then he need not abide by them.

With regard to amendment No. 8, the following is the position. Since 1979 many employees, in accordance with agreements made with their employers under section 3 of the Payment of Wages Act, 1979, have been and are being paid wages by a mode other than cash. At present under such arrangements those employees have a right to revert to cash payment of wages at the end of the period of such agreement or, when there is no specific termination date for the agreement, at any time by giving the employer four weeks' notice of the wish to revert to cash payment of wages. The purpose of section 3 (2) (b) is to guarantee for employees arrangements for reversion to cash payment of wages similar to those that they accepted at the time they agreed to non-cash payment of wages under the 1979 legislation. Amendment No. 8 seeks to provide by law for the voiding of certain provisins of the post-1979 agreement. The provisions proposed to be void are those relating to the right to reversion to cash payment of wages, the very provisions that were central to the agreements in the first place. Acceptance of the arrangement would therefore result in withdrawing compulsorily from employees their existing right to revert to the cash payment of wages. While the purpose of the amendment is to facilitate a more speedy changeover to the non-cash payment of wages, such action would have serious industrial relations implications and, further, would be an inequity in that employees who entered into agreements under the 1979 legislation in good faith would find that as a result of this Bill the very basis of such agreements, the right to revert to cash payment of wages, had been abrogated on a unilateral basis.

I realise that some of the employer groups have criticised the transitional arrangements contained in section 3 and have said in particular that the provisions do not go far enough in pushing the move to non-cash methods in payment. However, I think that I have made it clear that I am not prepared to countenance a move to non-cash methods of payment that is based simply on compulsion.

Does Deputy Byrne feel happy and convinced that he can withdraw the amendment?

I feel that amendment No. 7 should be put.

Amendment put and declared lost.

I move amendment No. 8:

In page 6, subsection (2) (b), lines 18 to 23, to delete all words from and including "then" in line 18 down to and including "aforesaid" in line 23 and substitute the following:

"then, such employee's wages shall continue to be paid in the manner that applied prior to the commencement of this Act and such payment shall be regarded as being made in compliance with the provision of this Act".

Amendment, by leave, withdrawn.

I move amendment No. 9.

In page 6, subsection (2) (b), line 23, after "agreed upon" to insert "in writing"

Amendment, by leave, withdrawn.

We come now to amendment No. 10 in the name of Deputy O'Sullivan. Amendment No. 12 is an alternative amendment, so it is therefore proposed for discussion purposes to take those two amendments together.

Is it correct that amendment No. 11 has been ruled out of order by virtue of the fact that it places a charge on the Exchequer?

Yes, a potential charge.

When speaking to amendment No. 10, I may ask for an explanation as to the reason for that. I move amendment No. 10:

In page 6, subsection (2), between lines 23 and 24, to insert the following:

"(c) employers following consultation and agreement with employee representatives will provide for time off to facilitate cashing of cheques or alternative arrangements by agreement to have cheques cashed and paid to employees during working hours.".

Everyone in the House is aware that this Bill results from a growth in the rate of crime and the danger of conveying cash between employers and employees and between banks and employers in many cases. The principle behind the Bill is to be welcomed and the Minister is to be complimented for his initiative in that regard.

The one drawback to the Bill is that any advantage is geared towards employers. Other speakers have mentioned the reduction in costs involved by paying wages by cheque or other modern methods of payment such as electronic and computerised methods of payment. However, at the end of the day employees have to go to their own local bank or other financial institution to cash pay cheques in their own time and at a loss to themselves. They may have to travel a lengthy distance from their place of employment to the point at which they cash a cheque. It is unfair to expect employees to bear the entire cost of that. I feel that there is an onus on the employer to make provision, cash provision, to compensate for time lost, distance travelled and inconvenience caused by employees having to go to cash wages cheques when in the past their wages would have been paid in cash.

In many of the major urban areas problems have arisen in that banks have pulled out from different localities because of a lack of business. Both in Cork and in Dublin banks have actually closed down and in parts of Dublin there is no banking service available. That position puts employees in those areas at a very definite disadvantage. I have tabled the amendment for that reason.

I sincerely hope that the Minister will take the amendment on board as there is an imbalance in the Bill at the moment. I consider the amendment to be the corrective measure required to ensure that fair play occurs right across the spectrum. One of the Minister's colleagues has in the past used the term "levelling the playing pitch". In this instance the playing pitch is a long way from being level in as much as any advantage goes to the employer. For that reason I ask the Minister to accept this amendment as being the commonsense approach.

This is an issue on which Deputies must stand up and be counted. The Minister is clearly aware of the position of the Congress of Trade Unions. I refer to the two issues that comprised the sticking point when the Payment of Wages Act, 1979, was under negotiation and that resulted in a conclusion not being arrived at then.

I reiterate that I believe very strongly that the Bill will be of much greater benefit to employers and banking institutions than to employees. The Bill presents a potential saving of millions of pounds to both employers and banking institutions, but I do not recognise any real benefit, in the form of cash or otherwise, accruing to the employees. I do not understand why legislation that was initially good — the old Truck Acts, which were designed to protect exploited employees down through the centuries — should in 1991 revert to being legislation not in defence of workers but to accrue savings to employers and banking institutions.

If we are to go through with this legislation there must, in fairness, be some clearly marked areas where workers will share the benefits. Manual workers, very often working for an hourly rate of pay, have been paid traditionally in cash. Why should they sacrifice this, with all the potential financial savings to their employers and in turn not get a penny out of it. The ICTU are right to feel sore about this issue. The Minister is kicking to touch, saying it is open to negotiation and let the unions and the employers kick it about among themselves but that he, as Minister, will do nothing to assist in bending it in favour of workers. I think that is very wrong.

It is imperative that employers recognise the rights of workers who are being paid in any form other than cash. In the case of payment by cheque workers should be allowed time off to cash their cheques. These workers still need their money in cash form on a Thursday or Friday night to pay their bills, and banking hours are so incredibly unsuited to their needs. One could argue if they were open on a Saturday or there were late night openings that people could cash their cheques outside working hours. The reality is that banks are open during working hours and there is this continuous demand that workers have ready access to cash after their week's work. There is no reason whatsoever why some of the benefits accruing to employers and banks from this legislation should not be passed on to the workers.

I urge the Minister most strongly to accept the amendment which is very simple and reasonable. Where an employee is paid by any mode other than cash the employer should be obliged to provide reasonable paid time off to facilitate the encashment of such mode of payment.

I see the point that Deputies Byrne and O'Sullivan are making, that the benefits of a changeover should be shared. However, I feel that bringing in a statutory provision requiring time off would be going too far. The real problem is the attitude of the banks. It is a disgrace that the banks are charging 17p for an automatic teller machine transaction which is the real alternative for people who are being paid by cheque. That is very unreasonable of the banks. The issue really should be to contest with them their opening hours and their charges. It is probably going too far to say that we should make a statutory provision so that employers would carry the can for the banks which is in effect what we would be asking. Obviously employers should be very reasonable with employees when trying to bring about change in the way they pay wages. However I would tend to the view that it would be going too far to insert a statutory provision requiring time off in the law.

Not alone is there a saving to the banks but there is a saving to the employers. I would ask the Minister to incorporate this requirement in the Bill to allow time off. I remember when there was a changeover in the firm where I worked we were told that the banks would come and cash cheques at the gate of the factory; the company, after consultation with the trade unions, decided to bring the day of payment forward to Thursday which was of great benefit to everyone. There was a cheque payment on a Thursday so that people who were working shifts could bank.

There are times when due to working arrangements, having to work a double shift in times of emergency, for example, when people cannot go to the bank and have to either cash their cheques in a shop that will facilitate them or wait until the following Monday. That can be a grave inconvenience to anyone. When the banks are looking for this change they go to extremes, being polite and cooperative to the workers, but a short while later when the change is implemented the boot is on the other foot; they change their hours, they do not turn up and they even close branches in areas that were already cashing cheques for workers. The onus should be on the employer to facilitate employees who are willing to change their method of payment at great inconvenience to themselves. There should be some allocation of time. It could be in the form of changing the time of payment from one day to another which helps enormously. However, some employers will not facilitate employees. They will say that now that the law is changed employees will have to accept payment by cheque and put up with the inconvenience. The fact remains that there are huge savings for employers in this change.

With the escalation of crime there is certainly a great need to change from cash to cheque payments. A man or woman's life could be in jeopardy because of the possibility of a payroll snatch. This fact has helped to change a lot of peoples' minds about the change-over from cash to cheque payments. I think the amendments are reasonable. This changeover certainly benefits the banks and also the employers, and the risk of payroll snatches would be eliminated. The least that can be done is to incorporate in the Bill a provision that would give the employee the facility to cash his cheque. The vast majority of employers will make that concession because they feel it is in their interests anyway. However there are employers who will not give the concession to the employees to go out to cash their cheques. Incorporating the requirement in law would safeguard the employee and be of great benefit to him. I would ask the Minister to take that on board.

I had not realised that my amendment No. 13 was out of order. I would like to make some reference to it. It was to the effect that any additional costs to an employee, such as bank charges or charges for cashcards arising from transfer to a non-cash system of payment shall be borne by the employer. I understand that is out of order and I am not quite sure why.

The Deputy will appreciate that the State itself is a big employer and in so far as your amendment would impose an additional charge on the State it is out of order.

I accept the ruling that it is out of order. However, it is important to make the case again on behalf of the Irish Congress of Trade Unions and the workers who will be affected by this legislation. Having highlighted on Second Stage the potential extra charges which may be imposed on employees who will be forced out of cash wages, it is worth reminding the House today that a survey by Consumer Choice shows that tremendous charges are levied on people with accounts in banks. The figures in Consumer Choice are greater than the figures I mentioned here on 18 June. The survey shows that there can be a difference of as much as 9p in bank charges for writing a cheque, ranging from 22p in Cork and in the Limerick Saving Bank to 31p at the AIB. A charge of 31p for every cheque that is written can amount to a lot of money and there are a complex range of other charges as well. Workers receiving cash payments know the exact value of their labour and they can budget accordingly. Why should we be unsympathetic to people who will move into the banking institutions to face all these extra charges which actually devalue the rate of return for their labour? We are not sure by how much wages will be devalued. It will differ between individuals depending on where they bank, on how many cheques they write and so on. If savings are to be made by employers and banking institutions why should the rights of workers not be protected? An amendment to impose an extra charge on the Revenue is out of order but at least people should be allowed reasonable time off to cash cheques.

On the last occasion I suggested that a different system must operate in Denmark where 90 per cent of the workforce receive payments in forms other than in cash. I argued that here there were not many manual workers in receipt of non-cash payments. I referred to the resistance to non-cash payments and the Minister replied that 70 per cent of blue collar workers here already have accounts with the banks and that this was great. Is it great? Just because a person has a current account with the bank does not mean that he has any money. In fact a lot of people are in hock to the bank. Because of this Bill many more people will probably end up in debt to the banks. The fact that 70 per cent of blue collar employees already have bank accounts is not a great argument for this. I am trying to keep manual workers who will be affected by this legislation out of the claws of the banks. The minimum that should be afforded to workers is a reasonable time off to cash their cheques in the banks.

This amendment deals with whether or not people should have time off in order to cash cheques. I will explain the contents of the Bill to some Deputies again because the point has been missed. Section 3 (2) of the Bill states:

(a) Where, immediately before the commencement of this Act, an employee's wages were being paid to him in cash, the employer shall, while the employee is in the employment concerned, continue to pay those wages to him in cash unless any other mode of payment specified in section 2 is agreed upon by the employer or an organisation representative of employers.

This makes it clear that nobody will be railroaded into non-cash payments. This means that if through negotiations in the collective bargaining system all concerned agree to non-cash payments they can implement it. This does not refer only to banks. It could involve credit unions, building societies, trustee saving accounts and so on. The Congress of Trade Unions are in favour of this Bill but the FIE, as mentioned by Deputies Shatter and Bruton earlier, do not want the transitional arrangements. The employers would prefer on the passage of this Bill to be able to tell their employees that next Monday morning they will be paid in other than cash payments. That will not be the case. There are transitional arrangements and this can only be done by negotiation. It is not for me to tell the trade unions or employers how to negotiate. Trade unions in their negotiations will ensure that workers are compensated in some way. The detailed arrangements involved in time off is best left to local bargaining. It is not appropriate to legislation. If the amendment was accepted it would mean that paid time off for banking should be given to all employees regardless of where the bank was. That is not what we are seeking to do.

Deputy Byrne's amendment seeks to enable all employees paid by cheque to have time off. In the case of some employees, time off is not an issue. In many cases employees may be in a position to drop into a local bank at lunch time and would not require time off and in other cases employees may require flexibility to do banking business. Time off for banking is hardly appropriate to night workers or employees who work non-banking hours or non-post office or non-credit union hours. The proposal to confine paid time off to cheque paid employees would be unlikely to find favour with employees generally. Those paid by payable order, bank draft or similar money transfer instruments would appear to have an equal case for time off but they are not mentioned in the amendments. If I were even to consider an amendment like this, which I am not, it would be unfair to say that a person paid by money order or through the credit union should not be entitled to the same time off.

Neither of the amendments tackled the problem of the amount of time off to be given although they impose a general obligation on employers to grant time off. Twenty minutes may be an average time, but how does one deal with the question of reasonable time off for an air hostess on transatlanic flight or for farm workers in a remote area? These are all things for local negotiation and I have no doubt that before they concede the right to move from cash payments the trade union movement will ensure that it is negotiated properly. This certainly cannot be negotiated in a general ambiguous amendment.

It is naive of the Minister to say that the Members do not understand the implications of this section. I understand why employers are opposed to this. It is a good bargaining position as distinct from the position of the Congress of Trade Unions. This is putting the employee at a tremendous disadvantage. I do not know why the Minister cannot take this on board. The Minister emphasised agreement before the introduction of a cheque payment system.

Take, for example, the position of two or three people employed in an office and who may not be organised. If they do not wish to be paid by cheque they have the option of going to either the commission or the tribunal. However, this could adversely affect the promotion prospects of those individuals within that firm. Indeed, they could be ostracised by their employer if they refuse to accept payment by cheque. This legislation will put people who object to this system of payment out on a limb. A vindictive employer who wants to introduce such a system of payment for his employees could make life very difficult for employees who are not protected by this legislation. For this reason I ask the Minister to give further consideration to these amendments which propose to safeguard the rights of workers who could be placed in a disadvantaged position as a result of this legislation.

Employees who decide to continue with the present system of cash payments will be protected under the legislation and they will have the backing of the tribunal in any negotiations. There are many precedents in this area. One of the first things employers who introduce a non-cash system of payment do is offer time off to employees to cash their cheques, which is the easy way out for them. I do not think the trade unions accept that time off is the only option; they believe there is a longer list of options.

Deputy Byrne was of the view that under this Bill employees would have to accept a non-cash system of payment. That will not be the case. They will only move to a system of cashless pay with their agreement. Therefore, their rights will not be taken away from them. As Deputy O'Sullivan rightly said, it will be more difficult for those in a small company where the staff are not well organised. However, I believe the status quo will remain in such cases as small companies would not make big savings with the introduction of a non-cash pay system. It is the big employers who will make the savings. The introduction of a non-cash pay system will mean almost irrelevant savings for an employer of five or ten people. The big savings will be made by employers who have a workforce of 100, 200 or 300 people. These are the employees for whom the trade union movement will negotiate settlements. The Bill provides that employees do not have to agree to a non-cash system of payment until there is a negotiated settlement.

I wish to ask the Minister a brief question. As far as I am aware, up to now if a person opted out of a non-cash system of payment the entire system fell. If a person wishes to opt out of the system in future will the entire system fall under this legislation or will it depend on a majority decision? Under the old legislation a non-cash system of payment could not be brought in if a person did not agree to it. Will this be the case in future?

Under this Bill workers will have an opportunity to negotiate agreements with their employers. People who are being paid by cheque at present under the 1979 Act will have an opportunity of renegotiating agreements with their employers. Once they negotiate a new agreement under the 1991 Act they will have to remain in the system and will not be able to drift in and out of it. People who already have an arrangement with their employer will be able to negotiate a new agreement.

We have debated this issue thoroughly and, obviously, I will stick with the proposals in my reasonable amendment. On Second Stage a member of the Fine Gael Party deplored my suggestion that people should be allowed time off to cash their cheques. He went on to ask why the trade union mentality sought to equate work with obstructionism. That was a disgraceful remark, an insult to my socialist colleagues and The Workers' Party. He said that nit picking to that degree made him despair and he hoped that some day the rights of trade unions would be severely restricted——

On a point of order, is the Deputy entitled to quote at length what another Deputy said without saying who is involved? Is that in accordance with the procedures of the House?

There is no Standing Order which prevents a Deputy quoting another Deputy. In so far as the Deputy presumes to quote, then ordinarily the basis of the quotation is given.

I am happy to remind the House that the Fine Gael Deputy who hoped that some day the powers of trade unions would be severely restricted——

Will Deputy Byrne give the basis for the quotation?

I am quoting from the Second Stage contribution of Deputy McGahon on this Bill on 18 June 1991.

I take great offence at the allegations made. The Labour Party, and The Workers' Party, have attempted today — obviously the Minister is not going to accept our amendments — to get some concessions for employees. It is important that employers give their employees reasonable paid time off to cash their cheques. However, for some reason this proposal is like a red flag to a bull. Fine Gael would like to see greater restrictions imposed on the trade union movement. The remarks made by Deputy McGahon on Second Stage were uncalled for and if the Deputy representing the Fine Gael Party today would like to apologise on his behalf, it would be accepted by us.

Deputy Byrne is using cheap tactics in a debate on a Bill wich is constrained by time. Every Deputy is entitled to express his view and Deputy McGahon can be particularly colourful when expressing his point of view. It is offensive and naive for a Deputy to impute to an entire party the views of one Deputy.

The amendment sponsored by Deputy Byrne is not progressive. It would not be good for the creation of employment to build into our legislation a statutory provision for time off on a long term basis in every case. This should be done by way of negotiation. As we all know, the manner of a transaction can change over time. The positions of workers, trade unions and employers have to be balanced in a reasonable way in the context of the issues confronting them. This should not be dealt with by way of legislation. As I made clear when I spoke on the amendment sponsored by Deputy Byrne, there is an onus on employers who will gain from changes of this nature to make reasonable agreements. It was cheap of Deputy Byrne to try to smear the Fine Gael Party by quoting the views of a colourful Deputy. If I sought to quote what was said in this House by some of his party's predecessors he would be quick——

I would be happy to listen to anything that was said by a member of The Worker's Party.

We can leave all that in the capable hands of the absent Deputy McGahon who, I am sure, will defend himself at the appropriate time.

I do not want to get involved in an argument at the end of this debate, which has been very constructive, but I wish to reiterate that from the point of view of the Irish Congress of Trade Unions if I were to accept these amendments I would undermine the negotiating position of the 90 or so trade unions who in the years to come will negotiate agreements on behalf of their membership covering numerous issues, including the question of time off to cash cheques. It would be very irresponsible of me to accept amendments which make reference to the question of time off without mentioning who would be covered. I wish to reiterate that I am making transitional arrangements to ensure that no one is forced to change over from the cash pay system without first being allowed to negotiate for some kind of recompense.

We must stick rigidly to time. As it is now 12.30 p.m. I am required to put the following question, in accordance with the resolution of the Dáil of 2 July: "That the amendments set down by the Minister for Labour for Committee Stage are hereby made to the Bill; that in respect of each of the sections undisposed of that the section or, as appropriate, the section, as amended, is hereby agreed to in Committee; that the Schedule and the Title are hereby agreed to in Committee and the Bill, as amended, is, accordingly, reported to the House; and no amendment having been offered to the Bill on Report that the Bill is hereby passed."

Question put and declared carried.
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