Dáil Éireann debate -
Thursday, 8 May 1997

Vol. 479 No. 1

Adjournment Debate. - Bell Lines Freight Group Creditors.

Mr. Ferris

I thank you, a Cheann Comhairle, for allowing me raise the position of the Bell Lines Freight Group creditors on the Adjournment, and I thank the Minister for attending to reply to a matter which is of considerable interest and importance in my constituency. The Bell Lines Freight Group is currently under examinership and, while I realise the Minister is not answerable in this House for the examiner, I am extremely concerned about the position of small road hauliers who have worked exclusively for this company. These hauliers are being offered settlement figures ranging from 25 per cent to 35 per cent, while larger creditors of the company, according to information supplied to me, are being offered settlements of 100 per cent. That represents discrimination against the smaller creditors who are mainly small hauliers who live and work in my constituency of South Tipperary in the Clonmel and Carrick-on-Suir areas. They will face financial ruin unless something is done by the Minister.

I ask the Minister to consider amending the Protection of Employees (Employers' Insolvency) Act, 1984 to cater for these people who have worked exclusively for this company. These people worked solely for the company. If this happened to other ordinary employees in the company, they would be immediately covered by the 1984 Act which has been used previously in regard to the tanneries in Carrick-on-Suir and the Ballingarry Mines in Ballingarry and that area of Slieveardagh. We have experience of the benefits of this Act which empowers the State to compensate employees for loss of earnings, loss of entitlements, holiday pay or whatever else might be due to them from an employer who becomes insolvent. I hope the Minister will examine this Act with a view to making it applicable to these small road hauliers who worked exclusively for Bell Lines up to the time it went into examinership.

Minister for Enterprise and Employment (Mr. R. Bruton)

I thank Deputy Ferris for raising this issue. I have every sympathy with the plight of the employees as described by the Deputy in his contribution.

The Protection of Employees (Employers' Insolvency) Act, 1984 already goes beyond what we are required to do under the relevant EU directive, and provides for a wider category of wage related debts to be covered where the employer is insolvent. I have already carefully examined whether this law needs to be amended to cover a wider number of circumstances where an employer has gone out of business, in the light of the concerns expressed by Deputy Ferris on behalf of workers caught by these situations. However, this examination to date suggests that such a widening might cause even greater problems than it would solve in that companies could be tempted to trade recklessly or to avoid paying their workers in the certainty that the Exchequer, through the Insolvency Fund, would pick up the tab. I am carefully examining the possibility of strengthening the law on enforcement of the statutory orders made by the Employment Appeals Tribunal, particularly in the so-called Phoenix syndrome, and I will be consulting with the social partners on the options open in this area.

The Protection of Employees (Employers' Insolvency) Act, 1984 confers certain rights and protection to employees in situations where their employer becomes insolvent for the purpose of the Act. These situations are defined in the Act and include liquidation, receivership, petitions to the High Court to wind up a company, resolutions made within company law procedures to wind up a company, bankruptcy, deceased employers being insolvent and the estate being administered within the terms of the Succession Act, 1965. This company is not insolvent for the purpose of the Act.

The type of debts payable to employees whose contracts of employment are terminated in the circumstances outlined above include debts which are all pay related. They include arrears of wages, sick pay and holiday pay outstanding at the time of insolvency, compensation which may be awarded in respect of minimum notice, awards or orders made by the Employment Appeals Tribunal or the courts in regard to unfair and/or wrongful dismissal, awards covering equal pay matters and maternity or adoptive leave awards. The amounts payable are subject to statutory time provisions and other limits and are subject to an overall gross weekly amount of £300 where a weekly amount applies.

The 1984 Act enacts the provisions of a 1980 EU Council directive on the approximation of the laws of the member states relating to the protection of employees in the event of the insolvency of their employer. This directive promotes the social provisions advocated within the terms of Article 117 of the EC Treaty where member states agree on the need to promote improved working conditions for workers and to harmonise conditions where the improvement is being maintained.

The 1984 Act and the insolvency payments scheme are the vehicles through which the provisions and specific objectives of the directive are administered in Irish law. In fact, the scheme goes beyond the catalogue of debts to which the directive applies but maintains the criteria of covering outstanding pay related debts as intended. It is financed from the Social Insurance Fund, again within the criteria of the directive and Article 117.

The 1984 Act and the insolvency payments scheme act as a safety net for employees and allows them receive speedy payment in respect of their outstanding pay related debts; the other creditors are dealt with within the framework of company law legislation and in an examinership, within the terms of whatever proposals that may be agreed before the courts.