Dáil Éireann debate -
Thursday, 15 May 2003

Vol. 566 No. 5

Redundancy Payments Bill 2003 [ Seanad ] : Committee and Remaining Stages.

Sections 1 to 4, inclusive, agreed to.

SECTION 5.

Mr. Howlin

I move amendment No. 1:

In page 5, line 19, after "to" to insert "the conduct of".

This deals with the definition of redundancy. The Tánaiste in her speech this morning spoke about the issue of redundancy being impersonal and mentioned the findings of the Employment Appeals Tribunal in the St. Ledger v. Frontline Distributors Limited case. As I said on Second Stage, the narrow definition where anything related to an individual is not seen as redundancy might have unforeseen results. I gave an example this morning of a person being made redundant on the basis of a last in, first out policy. That is personal to the individual and it could be argued that, therefore, it is not redundancy and there is no entitlement to redundancy payment. My amendment suggests that “not related to the con duct of the employee” should replace “not related to the employee”. It occurred to me that last in, first out is directly related to the employee and it is possible there could be other areas I have not thought of that are related to the employee that might make the current definition too simplistic and allow a hole to be punched in the definition of redundancy.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. M. Ahern)

I will not be accepting this amendment. The conduct of the employee is dealt with under section 6(4)(b) of the Unfair Dismissals Act 1977. That section provides that the dismissal of an employee shall be deemed for the purposes of this Act not to be an unfair dismissal if it results wholly or mainly from the capability, competence or qualifications of the employee for performing work of the kind which he was employed by the employer to do or the conduct of the employee.

Mr. Howlin

It is always unfortunate when the reply to the argument is written before the argument is made. The Minister of State made no reference at all to the argument I made. I am aware the issue of conduct is dealt with elsewhere. If somebody is dismissed because of conduct that is not redundancy. That is not my point. The point is that the new definition of redundancy that this new section creates in the principal Act makes a case whereby something that is personal to an individual, if that is the cause of the redundancy, is not in fact redundancy. In the example that I have given, the very nature of being employed is personal. If one is let go for that personal reason, that could be used by some to argue that no redundancy is payable because one is not redundant. That is the case I am making. It has nothing to do with conduct. I want to broaden the definition to include conduct because that would clarify what we mean by redundancy.

Mr. Morgan

I support Deputy Howlin's amendment which is meritorious. I can think of two examples of people who would have been affected similarly. In Thermal Heat Exchangers Limited in Drogheda which closed two years ago, that situation would have applied. It is most unfortunate that the amendment is not being considered. The Minister of State is dismissing it in a cavalier fashion. I am told by my researcher, who is still working on it, that a similar case existed in the Lissadell factory between Ardee and Carrickmacross with which you, a Cheann Comhairle, would be familiar, it being in your constituency.

In Louth, the smallest county, we can already pluck two cases after a short period of research in which this would apply. There is a case for it across the board and it is unfortunate that it is not accepted. My calling on the Minister of State to consider is hardly going to stretch it much further.

Mr. Howlin

It might be the impact he needs.

Mr. Morgan

If that is the case I make a direct appeal to the Minister of State to reconsider this amendment. It is a short but significant amendment and it deserves support.

Mr. M. Ahern

The wording in the Bill is based on advice from the experienced vice-chairman of the Employment Appeals Tribunal who is a senior counsel and parliamentary counsel. It is the job that becomes redundant and it is only as a consequence of the job becoming redundant that the person loses the job. It is job-related rather than person-related. This section also brings the redundancy definition into line with the definition given in the EU directive on collective redundancies 75/129/EEC Council Directive of 17 February 1975. It is the job, not the conduct of the individual, that is redundant and that is the advice from the senior and parliamentary counsel.

Mr. Howlin

I do not want to labour this for too long but it is frustrating when the net points I argue are not addressed. I know that the intention of the amendment is to detach the notion of redundancy from an individual action. If the job is going it is a redundancy. In effect what the new principal Act will say, if the Minister of State's new section is inserted, is that redundancy will be, "for one or more reasons not related to the employee concerned." That is plain English. I have instanced something that is patently of concern to an employee. It is unforeseen, it is not intended by the Minister of State, the draftsman or the ILO regulation about which he has spoken, but it will be what we enact in our law and it will be arguable in the courts. That is not what we want so why would he not accept it, if he can accept that my amendment will do no damage to the objective on which we are agreed?

Mr. P. Breen

There is nothing more to say.

Mr. Morgan

Should I appeal again?

Mr. Howlin

Maybe.

Mr. Hogan

It is an important issue because we may be stuck on this in the future.

Mr. M. Ahern

I am standing by my earlier advice.

Mr. Howlin

Bad advice.

Amendment put and declared lost.

Section 5 agreed to.

SECTION 6.

An Ceann Comhairle

Amendment No. 2 in the name of Deputy Morgan is out of order.

Amendment No. 2 not moved.

Mr. Morgan

A Cheann Comhairle, could I make a point of order?

An Ceann Comhairle

The Deputy can make a point of order as long as it is a point of order.

Mr. Howlin

The Deputy should stick to the section.

Mr. Morgan

It is an anomaly that the House if it so wishes cannot accept or alter an amendment to a Bill because it may involve a potential charge on the Revenue. I would have thought that was the prerogative of the House. I accept readily that I am still on a learning curve in terms of the nuances and exceptionally fine detail of some of these relationships between the House and the Department of Finance in particular, but there are few amendments that could have been tabled regarding this Bill that would not in some way have involved a charge on the Revenue. The House should at least have been given the opportunity to discuss the motion and if the House wished to accept it then it should have been offered.

An Ceann Comhairle

Under Standing Order 149(3) an amendment to a Bill which could have the effect of imposing or increasing a charge on the Revenue may not be moved by any Member save a member of the Government or a Minister of State.

Mr. Morgan

I was always above my station.

An Ceann Comhairle

Unfortunately for the Deputy it is not possible to move it.

Section 6 agreed to.

Amendment No. 3 not moved.

Section 7 agreed to.

SECTION 8.

Question proposed: "That section 8 stand part of the Bill."

Mr. Neville

While there is no amendment tabled to this section, in the future in this area consideration should be given to the principle that part of the Act would include an obligation on employers to bring in outreach programmes for those who are being made redundant, to prepare them for life after work in their organisations. People who have worked for many years do not understand how to obtain employment. For example they may never have had a curriculum vitae and may not know how to draw one up. They may have no interview techniques or not have done an interview for years. They do not know how to do a job search campaign under modern employment seeking opportunities.

I have seen good companies introduce a programme when their employees were made redundant which prepared them for life after redundancy. The experience of one company was that after three months, 90% of those who were made redundant and wanted employment found employment, and after 12 months, 100% of those who wanted work were employed, according to the company's research.

In future the obligation should be put on the employer and the State should make the same recompense towards the expense of an employer bringing in that programme as it makes towards the payment of the redundancy.

Mr. M. Ahern

The aspirations as outlined by Deputy Neville are worthwhile and should be given careful consideration.

Question put and agreed to.

Section 9 agreed to.

SECTION 10.

An Ceann Comhairle

The amendment in the name of Deputy Morgan is out of order as it involves a potential charge on the Revenue. Amendment No. 5 similarly involves such a charge and is therefore out of order.

Amendments Nos. 4 and 5 not moved.

Question proposed: "That section 10 stand part of the Bill."

Mr. Morgan

On the issue of retrospection, there is a precedent for the amendment. Section 8 of the Redundancy Payments Act 1971 deals with redundancy payments to certain employees dismissed before that date, meaning that there is a precedent for retrospection to come into play. The amendment has been ruled out of order because of a technicality and I obviously accept your ruling on that, a Cheann Comhairle. Nevertheless, in the course of the earlier debate and because it is relevant now, I ask people to acknowledge that such retrospection has already happened. The precedent is already there in section 8 of the Redundancy Payments Act 1971, which deals with redundancy payments to certain employees dismissed before the commencement of the Act. I am attempting to assist the Minister in her current difficulties.

Mr. M. Ahern

I have been informed that the provision in question was before 1971 and was terminated by the Act of that year.

Question put and agreed to.

SECTION 11.

An Ceann Comhairle

Amendment No. 6 in the name of Deputy Morgan involves a potential charge on the Revenue and is therefore out of order. Amendments Nos. 7 and 8 both involve a potential charge on the Revenue and are both out of order.

Amendments Nos. 6 to 8, inclusive, not moved.

Question proposed: "That section 11 stand part of the Bill."

Mr. Howlin

I was going to table an amendment to section 11 because I wanted to increase the ceiling. I understand that the ceiling provided in what is now section 11 to us, was section 12(2) in the original Bill as proposed. That purports to provide a ceiling, but that refers to section 4(2) of the Redundancy Payments Act 1979, which in turn refers back to the power to vary the amount referred to in paragraph 2 of the Third Schedule to the Redundancy Payments Act 1967. I understand that this Bill also repeals that section. I am therefore content not to seek to remove the ceiling since I do not think it is operative.

Question put and agreed to.

An Ceann Comhairle

Amendment No. 9 in the name of Deputy Morgan involves a potential charge on the Revenue and is therefore out of order.

Amendment No. 9 not moved.

Section 12 agreed to.

Sections 13 and 14 agreed to.

SECTION 15.

Mr. Hogan

I move amendment No. 10:

In page 9, between lines 36 and 37, to insert the following:

"(d) so that all legal disputes regarding statutory redundancy and minimum notice be determined by the Rights Commissioner.”.

Currently, if there are any disputes over statutory redundancy or minimum notice entitlements, the matter must be referred to the Employment Appeals Tribunal. Although it should not be the case, such a referral can sometimes be costly to the employer or employee. Accordingly, I suggest that employees be able to refer any disputes to a rights commissioner as provided for under the Unfair Dismissals Act 1977. Perhaps the Minister might take that into account.

Mr. M. Ahern

I will not accept the amendment. Legal disputes covering statutory redundancy and minimum notice are determined by the Employment Appeals Tribunal, something generally considered by practitioners to be the appropriate forum, given the sometimes complicated legal issues involved. The Government is committed to reviewing the employment rights bodies, and my Department will initiate that review towards the end of the year. It is envisaged that the review will consider the current employment rights legislation and the legislation governing the Labour Court, the Labour Relations Commission, the Rights Commissioner service and the Employment Appeals Tribunal. The review's aim will be to make recommendations on the services of the employment rights bodies to ensure that they are clear, coherent and user-friendly.

Mr. Neville

When the Employment Appeals Tribunal, which deals with redundancy, was established, it was meant as a semi-formal, fairly inexpensive way of dealing with industrial relations issues under the various Acts, including those covering redundancy payments. However, within a few years, the lawyers got involved and changed the Employment Appeals Tribunal to make it an extremely expensive undertaking for an employee or even an employer. Now the most eminent of barristers are involving themselves at great expense. I remember that when the tribunal was introduced in 1977, trade union and Federated Union of Employers officials dealt with everything in an inexpensive way. That has unfortunately all changed, and if anything can be done to reverse that, it should be examined.

Mr. M. Ahern

The review will examine that.

Amendment, by leave, withdrawn.

Section 15 agreed to.

Section 16 agreed to.

SECTION 17.

An Ceann Comhairle

Amendment No. 11 in the name of Deputy Howlin is out of order as it involves a potential charge on the Revenue.

Mr. Howlin

How can an amendment tabled with regard to the Standing Orders of the Dáil and subject to their constraints be in violation of them?

An Ceann Comhairle

My advice is that it seeks to permit or require retrospective operation of the Bill to allow for backdated payments and would increase the exposure of employers, consequently the social insurance fund and potentially the Exchequer.

Amendment No. 12 is out of order, as it involves a potential charge on the Revenue.

Mr. Hogan

I acknowledge that it might be out of order, but I suggest that only the Minister and the Government are in a position to propose an amendment themselves to meet ex gratia payments in line with the commitment made to the workers involved, thereby alleviating the possibility—

An Ceann Comhairle

Perhaps we could dispose of the amendments, after which we can bring that up when we take the section. Amend ment No. 13 in the name of Deputy Howlin is out of order as it involves a potential charge on the Revenue.

Amendments Nos. 11 to 13, inclusive, not moved.

An Ceann Comhairle

Perhaps Deputy Hogan might speak on the section now.

Question proposed: "That section 17 stand part of the Bill."

Mr. Hogan

Deputy Howlin and I have made the case on Second Stage, clearly stating to you, a Cheann Comhairle, and the Leas-Cheann Comhairle, our understanding of events regarding the workers at Comerama.

An Ceann Comhairle

Perhaps I should clarify a point regarding the Leas-Cheann Comhairle in fairness to him. As Members are aware, the Leas-Cheann Comhairle cannot make a contribution in a debate on the floor of the House any more than the Ceann Comhairle. The Leas-Cheann Comhairle makes his contribution in his capacity as an ordinary Member, as he is entitled, and it would not be in order to attribute actions to any Leas-Cheann Comhairle when he was clearly acting in his capacity as an ordinary Member of the House.

Mr. Hogan

I would never have known, if you had not told me, that Deputy Pattison was not the Leas-Cheann Comhairle, but I acknowledge—

An Ceann Comhairle

He is not in that capacity any more than the present incumbent was when he was Leas-Cheann Comhairle. One does not speak in the House as an officer of it.

Mr. Hogan

I want to oppose section 17 on the basis that the Government has failed to include a commitment given by the Minister arising from a meeting on 12 December 2002 to workers of Comerama, Castlecomer, County Kilkenny, to include those workers in the benefits of Sustaining Progress, the national partnership agreement.

This will have a knock-on effect for other workers who have been made redundant since 28 November 2002. I do not accept the legal advice outlined by the Tánaiste in her Second Stage contribution as sufficient reason to turn down this request. There have been precedents in the past where ex gratia payments have been made, for example, the Talbot workers were effectively nationalised by the then Taoiseach, Charles J. Haughey, because it suited him politically to do so. If the Government has the political will to implement the word of the Tánaiste in the context of this legislation it can be done. The legal advice has indicated that it is the legal charge on the employers that is causing the difficulty. This has nothing whatsoever to do with the obligation on the Government to include as an ex gratia payment its portion of the payment from the social insurance fund to the workers of Comerama, Castlecomer and other workers who have been affected. In justice I appeal to the Government and the Minister to reconsider this matter given the solemn undertaking they have received and to take on board the genuine contributions made by Members who were present at that meeting and the letters read into the record from workers' representatives who were also present at that meeting. It appears the only person out of step in regard to what happened at that meeting is the Tánaiste. That is regrettable and I shall oppose the section on that basis.

Mr. Howlin

I too oppose this section. I am disquieted by the way the Government has responded to the debate today. A serious issue has arisen about a commitment made. We have established, prime facie,that a commitment was made by the Tánaiste to a group of workers and the Tánaiste has denied such a commitment. It is incumbent on her to come into the House and answer it. I am not allowed refer to the office of the Leas-Ceann Comhairle but I refer to the father of this House, one of its most revered Members, who does not lightly make clear assertions in the House. I have never heard such a clear assertion that he was present when a commitment was made.

This morning I referred to the meeting that took place on 12 December 2002 and I now refer to a second meeting which took place on 15 January 2003 attended by at least 12 people, including SIPTU representatives, politicians and representatives of Enterprise Ireland. That meeting was presided over by the Minister of State, Deputy Aylward. I am advised his opening remarks referred to the good news that statutory redundancy improvements had been agreed at the pay talks and he referred to the Tánaiste's promise to extend these to the Comerama workers. Everybody could not be out of step, everybody could not have misheard, everybody could not be wrong except the Tánaiste. I accept that whatever commitment was made was made in good faith. It has been established, prime facie, that a commitment was made. A document which has been circulated this week has been referred to as a minute. A minute is an agreed account of a meeting. One side does not produce a minute. That document was not put to anybody else for agreement except, I understand, the Tánaiste and her staff. It is incumbent on the Tánaiste to honour the commitment given. If she cannot do it in the way she had hoped, that is, by making the provisions of this enactment retrospective she should be clever enough to provide an alternative device, perhaps by way of an ex gratia payment to those workers who acted in good faith and accepted her word in good faith.

I said previously the Tánaiste had indicated that the unions knew at this time that it would be legally impossible to make it retrospective. That is what she told us on 8 May in response to Deputy Rabbitte's question. Why did she say then she would do her best if she knew already that it was legally impossible? Either she was being disingenuous or perpetrating a con. That is the reality. I am deeply sorry the Tánaiste is not present to clarify this matter. What is required now is that this problem will be addressed in good faith and in honour for those who have got, what is acknowledged by everyone in the House as inadequate statutory redundancy under a system that will exist up to the enactment of this provision, which it is hoped will be on 25 May. I hope the Minister of State will indicate that he will do that.

Will the Minister of State indicate exactly when this provision will come into effect? Will RPIs returned between now and 25 May be processed by his Department? Will the people concerned receive the letter payments currently operative? Those who are now redundant and who are in the process of returning RPIs should have clarity of their position.

Mr. Morgan

I am concerned the Tánaiste is not here to give an explanation on her position in regard to the meeting and the commitment that was apparently given. I say "apparently", but it is not fair to use that word because that over qualifies it given the number of Deputies who were present, all of whom were unanimous on it. The word "apparent" is nearly an insult to them, given their numbers and their powerful recall in terms of the detail. There is no "ifs", "buts", "maybes", or doubts on their part. I recall a presidential election a few years ago where one of the candidates had a difficulty with a memory issue and it cost him the election. On that basis alone, the Tánaiste should be here to answer this charge and to clarify matters still further.

On the substantive issue of the section and given the restrictions imposed on the amendments by virtue of the Standing Orders I would have no problem with shuffling these amendments across the floor to the Minister of State to move them and I do not mind if my name is not associated with them. I am sure the workers in this part of the State would be enamoured by him and he would probably get significant support from them. Certainly they are entitled to that consideration from the Minister of State. I am sure other Deputies would do likewise.

Mr. Pattison

I made my position clear this morning. To be consistent, I could not support this section and will have to oppose it. It is a pity the Tánaiste is not here to inform the House if she will consider other ways of compensating the workers. We could support the section if the Tánaiste indicated to the House that she was prepared to remedy this problem under, say, a separate Estimate under her Department, as was done in the case of the Talbot workers, or by some other means. I cannot expect the Minister of State to give us those assurances. In the light of that I support the opposition to section 17.

Mr. S. Ryan

It is a sad day for workers particularly those who have lost their jobs, many of whom have given 30 to 35 years service to particular employers, in the context of the Social Partnership Agreement, Sustaining Progress, the vote on which was close. Many people voted on the understanding that an enhanced redundancy payment scheme would be introduced. Apart altogether from a commitment given by the Tánaiste and other Government Ministers throughout the country—

Mr. M. Ahern

Alleged commitments.

Mr. S. Ryan

I am clear about the commitments made. Since the national agreement was finalised, many workers have indicated that they will require redundancy payments at the agreed enhanced rate. I do not accept the advice on retrospective payments.

Mr. M. Ahern

That was the decision.

Mr. S. Ryan

The issue is centred on employers on the basis that it would be unfair to ask them to make retrospective payments. We are also concerned with redundancies arising from insolvency, where payments will be made under the insolvency payments scheme. That does not involve retrospective payment. There is, therefore, a mechanism to meet the needs of employees who have been made redundant. If employers are not prepared to accept the legitimate points made by the Opposition it is for the Government to propose an alternative mechanism that will do justice to employees who have given years of service and who look to this Bill for a proper recompense.

Mr. M. Ahern

The new rates will come into effect for employees who are issued with notice of redundancy on or after Sunday, 25 May 2003.

Mr. Howlin

What about those who have not returned their RP1 forms?

Mr. M. Ahern

The date will be at the bottom of the RP1 form and it must be 25 May or subsequently.

Mr. Howlin

I ask the Minister of State to send me a note on that.

Mr. M. Ahern

On the question of overcoming the legal difficulties with retrospection, statutory redundancy is an employment right and involves a corresponding obligation on employers. The State, through the social insurance fund, gives a rebate to the employers who fulfil their statutory redundancy obligations. In exceptional circumstances only, such as liquidation, the State pays the entire statutory amount to the employees who would not otherwise receive payment. The State then seeks to recover these payments from the assets of the business.

There is no logistical provision whereby the State can make additional redundancy payments to employees. Accordingly, for the State to make additional payments to employees, legislative authority would be required. In effect, a new scheme would be required to make additional payments. The cost involved would depend on the parameters of any such hypothetical scheme. There is no intention to devise such a scheme, which would inevitably be both complex and costly. The projected annual cost of the Redundancy Payments Bill, at €149 million, gives an idea of the magnitude of the cost that could be involved.

It was clearly understood by all parties during the negotiations leading up to Sustaining Progress that retrospection was not possible. The swift passage of this Bill means new redundancy provisions agreed in Sustaining Progress will be implemented in the shortest possible time frame.

Mr. Morgan

There is no need for a vote on this because it would only take some mature reflection on the part of the Minister to resolve the outstanding issues.

Question put.

Tá

Ahern, Michael.Ahern, Noel.Andrews, Barry.Ardagh, Seán.Aylward, Liam.Brady, Johnny.Brady, Martin.Browne, John.Callanan, Joe.Carty, John.Cassidy, Donie.Collins, Michael.Cooper-Flynn, Beverley.Coughlan, Mary.Cregan, John.Curran, John.Davern, Noel.Dempsey, Tony.

Dennehy, John.Devins, Jimmy.Ellis, John.Fahey, Frank.Finneran, Michael.Fitzpatrick, Dermot.Fleming, Seán.Glennon, Jim.Grealish, Noel.Hanafin, Mary.Harney, Mary.Haughey, Seán.Hoctor, Máire.Jacob, Joe.Keaveney, Cecilia.Kelleher, Billy.Kelly, Peter. Killeen, Tony.

Tá–continued

Kirk, Seamus.Lenihan, Brian.Lenihan, Conor.McCreevy, Charlie.McDowell, Michael.McEllistrim, Thomas.McGuinness, John.Moynihan, Donal.Moynihan, Michael.Mulcahy, Michael.Ó Cuív, Éamon.Ó Fearghaíl, Seán.O'Connor, Charlie.O'Dea, Willie.

O'Donnell, Liz.O'Donovan, Denis.O'Keeffe, Batt.Power, Peter.Power, Seán.Sexton, Mae.Smith, Brendan.Smith, Michael.Wallace, Dan.Walsh, Joe.Wilkinson, Ollie.Woods, Michael.Wright, G. V.

Níl

Boyle, Dan.Breen, Pat.Broughan, Thomas P.Bruton, Richard.Burton, Joan.Connolly, Paudge.Costello, Joe.Cowley, Jerry.Crawford, Seymour.Cuffe, Ciarán.Deasy, John.English, Damien.Gilmore, Eamon.Gogarty, Paul.Gormley, John.Gregory, Tony.Harkin, Marian.Healy, Seamus.Higgins, Joe.Higgins, Michael D.Hogan, Phil.Howlin, Brendan.Kehoe, Paul.Lynch, Kathleen.McCormack, Padraic.McGinley, Dinny.McGrath, Finian.

McManus, Liz.Mitchell, Gay.Mitchell, Olivia.Morgan, Arthur.Murphy, Gerard.Naughten, Denis.Neville, Dan.Noonan, Michael.Ó Caoláin, Caoimhghín.Ó Snodaigh, Aengus.O'Shea, Brian.O'Sullivan, Jan.Pattison, Seamus.Perry, John.Quinn, Ruairi.Rabbitte, Pat.Ring, Michael.Ryan, Eamon.Ryan, Seán.Sherlock, Joe.Shortall, Róisín.Stagg, Emmet.Stanton, David.Timmins, Billy.Upton, Mary.Wall, Jack.

Tellers: Tá, Deputies Hanafin and Kelleher; Níl, Deputies Kehoe and Stagg.

Question declared carried.

An Ceann Comhairle

In accordance with an order of the Dáil of this day I am required to put the following question: "That the Title is hereby agreed to, that the Bill is accordingly reported to the House without amendment, that Report Stage is hereby completed and the Bill is hereby passed."

Question put and agreed to.