Dáil Éireann debate -
Thursday, 28 Feb 2002

Vol. 550 No. 1

Written Answers. - Redundancy Payments.

Jack Wall

Question:

57 Mr. Wall asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans she has to investigate the position of the Peerless Rug workers in Athy, County Kildare in view of the fact that the Labour Court recommended a payment to each worker, that is not attainable from the source determined by the court; if she will initiate legislation to support the decision of the court; the reason the court made such a decision if it is not legislatively or legally possible to reverse the decision that the court made in awarding the payments for each worker involved; and if she will make a statement on the matter. [7249/02]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney):

The Labour Court operates as an industrial relations tribunal, hearing both sides in trade disputes, such as disputes relating to non-statutory redundancy payments. In such cases, the court hears both sides and then issues recommendations setting out its opinion on the dispute and the terms on which it considers the dispute should be settled. A hearing in relation to the dispute concerning redundancy payments for those affected by the closure of Peerless Rugs, Athy took place on 9 July 2001, following which the court issued its recommendations. While the recommendations of the Labour Court are not binding on the parties concerned, the parties are expected to give serious consideration to the court's recommendations. However, responsibility for the settlement of a dispute ultimately rests with the parties themselves. At present there are no plans to make recommendations of the Labour Court in industrial relations disputes legally enforceable.

Charles Flanagan

Question:

58 Mr. Flanagan asked the Tánaiste and Minister for Enterprise, Trade and Employment the total amount paid by her Department to workers and representatives of a company (details supplied) following the collapse of the company; if money is due and owing from the company to her Department; and if she will make a statement on the matter. [7307/02]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney):

Under the Redundancy Payments Acts, 1967-2001, all claims received by my Department in respect of entitlement to statutory redundancy payments have been paid to former employees of Irish Ispat Limited. The total paid to date under the scheme is €2,010,629.33. Under the provisions of the Redundancy Payments Acts, 1967-2001, the amount owed to the Social Insurance Fund by the company is €804,251.73 and this amount will rank as a preferential claim against any assets in the final winding up of the liquidation proceedings.

As regards the insolvency payments scheme, all claims received, with the exception of one on query, in respect of outstanding pay related employee entitlements have been paid under the terms of the scheme. The amounts paid cover wages, holiday pay, minimum notice compensation and some pension contributions claims received to date. The total paid to date under the scheme is €1,548,986.41. Under the provisions of the Protection of Employees (Employers' Insolvency) Acts, 1984 to 2001, the total amount paid will rank as a preferential claim against any assets in the final winding up of the liquidation proceedings of the company.

My Department has also paid matching funds of €3,000 per employee in relation to an application to the European Commission for re-adaptation aid under Article 56(2)(b) of the European Coal and Steel Community Treaty. A total amount of €1.362 million has been paid to date in matching funds which also includes payments of matching funds to some permanent on site contract workers. Under this scheme, the State is required to provide the matching funds and these funds are not recoupable.

At the time of the closure of the company, a State guaranteed loan which had been taken out by the former Irish Steel in 1993 from ACC Bank was still in place. This loan had been due for repayment in 2003 but on liquidation of the company the full amount outstanding became payable. The State has paid the ACC Bank an amount of IR£8.37 million in settlement of their claim under the guarantee. As part of the State aid package at the time of the sale, the State had deposited IR£4.617 million in a joint Escrow account with Ispat on condition that this was to be held on deposit until both the ACC loan and another State guaranteed loan were re-paid. The other State guaranteed loan was repaid by Ispat in 1999. Also a letter of credit for IR£4 million was put in place by Ispat as counter-cover for the guaranteed loans. The State is currently in the process of recouping the amount paid to the ACC Bank from funds in the Escrow account and from the letter of credit and it is expected that the amount paid by the State on foot of the guarantee will be fully recouped in the near future.