Vol. 630 No. 3
127 Mr. McGinley asked the Minister for Enterprise, Trade and Employment the efforts being made to replace jobs lost in the Donegal town, south Donegal region as a result of the closure of a company (details supplied) with the loss of almost 200 jobs; and if he will make a statement on the matter. [2704/07]
149 Mr. McGinley asked the Minister for Enterprise, Trade and Employment his plans to address the continuing unemployment crisis in County Donegal which is four times the national unemployment average; and if he will make a statement on the matter. [2703/07]
I propose to take Questions Nos. 127 and 149 together.
Since Hospira made its announcement in respect of its Donegal plant, IDA Ireland had been working closely with the company to secure a replacement for the facility. In March 2006, Abbott, one of the world's largest health care companies, announced that it was acquiring the facility from Hospira and that it planned to make a €36 million investment, with the support of IDA Ireland, to establish a manufacturing facility for its diabetes care products in Donegal town. This new investment will create 155 high quality jobs at full production. Abbott has now taken possession of the plant and recruitment of key executives is under way along with the redevelopment of the site to meet the needs of the new company.
As regards employment generally in Donegal I published the report of the interdepartmental group on Donegal in July 2006. I established the group at the request of the Government following a number of major job losses in the county in recent years. I asked the interdepartmental group to focus on the progress being made on infrastructural requirements to make Donegal a more attractive location for enterprise creation, particularly as it makes the transition from traditional to more modern and higher value-added industries. The report showed that Donegal has no shortage of advantages and opportunities in so far as the promise of a brighter future for its inhabitants is concerned. A dynamic combination of State development agencies is active in Donegal, committed to enhancing the attractiveness of the county for business. These agencies have demonstrated the ability to provide a clear vision and focus for future economic development. IDA Ireland will pursue more knowledge-based greenfield FDI sites for Donegal and convince existing IDA clients to transform their current operations to higher value activities. Enterprise Ireland will encourage and assist more innovative, technology-led companies and promote a greater level of start-up activity. These actions are a recognition of the challenges facing traditional industry and both agencies are responding, as is Údarás na Gaeltachta. The county enterprise board will continue to provide existing and new supports to microenterprises complementing the work of both IDA Ireland and Enterprise Ireland.
The provision of much needed infrastructure has been highlighted as an obstacle to job creation in Donegal over a number of years. I was pleased that the report identified much good news in terms of developments under way or planned in the areas of roads, air, water supply and treatment, broadband, energy and education. These have been solidified and strengthened in the National Development Plan 2007-2013 just launched. Particular emphasis has also been placed in the NDP on North-South co-operation and developments which will be of direct benefit to Donegal.
I also believe that what has already been achieved in terms of job creation in the past year is largely as a result of the ongoing commitment to Donegal of the State development agencies, the infrastructural developments recently completed and the commitment to ongoing and planned developments. In addition to the Abbott announcement, recent major job announcements include SITA, ZEUS, PowerBoard and AssetCo.
I assure the Deputy that the Government and the State development agencies are fully committed to fostering the environment for job creation in Donegal.
The Minister will understand why Deputy McGinley and I are concerned about the level of unemployment in County Donegal, which stands at 14%, significantly above the national average. It requires special attention because, notwithstanding the Minister's reply, County Donegal feels isolated from the rest of the country. Not enough has been done in recent development plans to ensure infrastructure such as broadband, access to roads and other services which the Minister mentioned are delivered to Donegal. There is a willingness to provide this infrastructure in the current plan but implementation is what matters. Despite several national development plans, Donegal has lost competitiveness in both traditional and other industries. I welcome what the Minister said on announcements in the past year but he will realise that Donegal is starting from a low base in terms of employment opportunities.
When will the Government be in a position to announce further infrastructural developments for Donegal, particularly those with a North-South dimension? The economic well-being of Donegal is often intertwined with the economic activities of Northern Ireland.
A significant investment package was announced for the North in the national development plan, which will be of direct benefit to Donegal. I am not sure 14% is an accurate figure for unemployment in the county.
The figure is high, in any event.
There have been job losses in traditional industries in Donegal, such as textiles, creating considerable difficulties for those affected. However, the number of people on the live register has been reduced from 9,900 in 2002 to 8,774 in December 2006, although we would like there to be a more rapid decline. Significant companies supported by the IDA such as PacifiCare, Pramerica Systems, SITA and others have announced the creation of an extra 1,200 jobs. Enterprise Ireland has also worked hard in the area, leading to AssetCo relocating from the UK to Donegal. Companies such as PowerBar and PowerBoard are other companies to have set up in Donegal.
The Letterkenny business park has now been completed and construction, involving Donegal County Council, to extend the Letterkenny ring road to the park is nearing completion. Work has commenced on an office building of 2,300 sq. m at Windyhall and work is under way on the development of technology units and an additional advance office building at Lisnenan. In Donegal town, IDA Ireland has commissioned architects to design a 1,000 sq. m office building in Lurganboy and has applied for planning permission. Also, IDA Ireland has taken on a significant amount of site development work in Ballyshannon, which is now complete, and land has been purchased in Buncrana and planning permission obtained for a factory of 2,000 sq. m. The IDA is working with a local private developer in the provision of additional buildings on the estate.
Regarding the interdepartmental report alluded to, my Department was the main catalyst and brought other Departments into the process. We managed to accelerate a range of infrastructural developments, including roads, transport, water and so on. Electricity continues to need a push. When I met members of the council at the publication of the report, I told them it is important to have consensus in the community and society on the provision of badly needed infrastructure, including electricity. There have been planning issues and campaigns against the development, but the continued attraction of big industrial players will require power generation infrastructure and electricity transmission capacity. This issue requires political consensus and a collective endeavour among all political parties and groups that are anxious to see County Donegal advance industrially and economically.
Is anyone against the development?
Yes.
128 Mr. M. Brady asked the Minister for Enterprise, Trade and Employment the reason Irish Ferries received the €4.3 million rebate; the further reason that under the Redundancy Payments Act 2003, the staff were deemed to be made redundant; the amount of the total redundancy package; the average amount each worker received; and if he will make a statement on the matter. [2574/07]
141 Mr. Eamon Ryan asked the Minister for Enterprise, Trade and Employment the cost to the State of the redundancy rebate to Irish Ferries; and the reason that informed the decision, with specific reference to the Redundancy Payments Act 1967. [2718/07]
159 Mr. Ferris asked the Minister for Enterprise, Trade and Employment the contacts, written or verbal, his office has had with Irish Ferries in the past three months; and if he will make a statement on the matter. [2616/07]
196 Caoimhghín Ó Caoláin asked the Minister for Enterprise, Trade and Employment the cost to the State of contributing to the cost of making redundant 500 Irish seafarers employed by Irish Ferries. [2610/07]
I propose to take Questions Nos. 128, 141, 159 and 196 together.
In December 2005, agreement was reached between SIPTU, the Seamen's Union of Ireland and Irish Ferries on the number of redundancies to be effected, voluntary severance packages to those workers taking redundancy, the terms and conditions of those workers opting to remain with Irish Ferries, the terms and conditions of agency workers for a specified period and the maintenance of existing arrangements. Following this agreement, 447 employees were made redundant. Irish Ferries applied for a rebate under the statutory redundancy scheme on 17 February 2006.
The first point to note is that the Redundancy Payments Acts 1967-2003 provide for entitlements for workers whose jobs are lost in certain circumstances and corresponding obligations on employers to pay statutory redundancy to the workers. When employers pay statutory redundancy to their workers in accordance with the Acts, they are entitled to rebates from the social insurance fund. All decisions to pay a redundancy rebate must be based on the facts of the case and the Acts. There is no room for the exercise of ministerial preference or the consideration of matters extraneous to the redundancy legislation.
When the rebate application was received in my Department it was, as is the usual practice, examined thoroughly. This gave rise to doubts as to the eligibility of the application under section 7 of the Acts. The issue of eligibility was referred to the Office of the Attorney General for legal advice. A number of complex legal issues requiring further information from Irish Ferries arose at several stages during consideration of the matter.
The issue was considered in detail on the basis of the legal advice received and the facts of the case and it was determined that Irish Ferries was legally entitled to receive a rebate in accordance with the Acts. As yet, no payments have been made, but extensive work on checking all claims has commenced. It is anticipated that a rebate in the order of €4.3 million will be paid to Irish Ferries by the end of February.
It is not possible at this stage to provide average statutory redundancy amounts received by the employees, as all claims have not been checked in my Department. Payment of statutory redundancy is a matter for the employer in the first instance, under which each employee is entitled to two weeks' pay per year of service up to a maximum of €600 plus a bonus week. Ex gratia payments are a matter for the employer and employee and my Department has no involvement in such arrangements.
There has been no written or verbal contact between Irish Ferries and my office or that of my colleague the Minister of State with special responsibility for trade and commerce, Deputy Michael Ahern. Searches of my diary and the representations tracking system in my office have not revealed any record of contacts between the Minister's office and Irish Ferries in the past three months.
I thank the Minister for his reply. Did the Minister have any discretion in respect of declaring the redundancy a voluntary severance scheme? If the Attorney General had not declared the matter a collective redundancy, we could have avoided paying the rebate to Irish Ferries. If the matter had not been declared a redundancy, could the former employees have received their compensation tax-free? How much was the average redundancy worth?
Does the Minister have information on how many Irish Ferries workers have found employment elsewhere and is he aware that the replacement crews are mainly non-nationals whose working conditions are unacceptable? Do we intend to take action or investigate this matter?
We do not have discretion and must follow the law. We received legal advice in this regard. We have published the heads of new legislation to address such situations and will publish the Bill, which will deal with collective redundancies, to prevent a repeat of the Irish Ferries case on land shortly. It was a major part of the social partnership talks.
On taxation status, if they were not declared to be redundancies under the Acts or the rebate was unpaid, I understand the workers would have been liable for tax on the payments they received. It would have been a different tax arrangement.
Is that an explanation for the mystery?
No. I am responding to a question asked of me and putting the information on the record. I am not entirely happy with the conditions that pertain in the maritime world because they are a cause for considerable concern. Given our labour laws and conditions, what pertains in the maritime world seems to be a retreat from what we would accept in developed economies.
The Government facilitated the retreat.
No. The matter must be resolved internationally because it leads to competitive pressures if people——
Extend land labour laws to European seas.
I recall that when the Cork-Swansea ferry service was set up ten or 15 years ago with council involvement, the rates earned by crews were not similar to those of traditional B&I crews. It has been a trend in the international maritime sector that we do not want applied to Irish domestic conditions. In the context of the proposed domestic legislation that has emanated from our discussion with the social partners, we are trying to close off opportunities for this type of——
It should be European-wide.
——undermining of basic pay standards and conditions. Everyone in the House would aspire to such.
Is the Minister satisfied that every legitimate obstacle was put in the way of the deal made by Irish Ferries when it ripped off taxpayers and hoodwinked its workers? If not preventable, could the deal have been slowed, thereby discouraging others from following suit?
A more robust interpretation of the law would have established the answer.
If the Deputy can recollect, we managed to involve the Labour Relations Commission contrary to the initial wishes of some of the parties, particularly the employers. The commission played a significant role in trying to resolve the issues at the time. A variety of sources pressured the commission and some pressed for a resolution.
The scale of the redundancy payment created its own momentum towards resolving the issue. Deputy Quinn used other language to describe the situation, but the reality is that the payment was probably higher than the scale of normal redundancies. This led to pressure on representative bodies to accept the deal. We managed to keep events inside the labour relations process and to have both parties engage with the labour relations machinery of the State, which we were anxious to achieve. It was the best we could do in the context of the law that applies, outside of which the Government cannot go.
Most people would understand that the job is made redundant, not the worker, so it is hard to get one's head around the fact that the workers were replaced in exactly the same jobs. That is why it is difficult to reconcile the redundancy payments. The Minister said complex legal questions arose and that he has his own views on the matter but it is hard to reconcile the payments in the absence of an understanding of those legal questions. It would be in all our interests if we could see the legal advice because otherwise we are speaking in a vacuum and there is a deficit of information.
Does the Minister expect the legislation to address this matter to be passed before the general election?
It is our intention that the legislation will be passed before the election; we will publish the Bill shortly. It is not normal procedure, however, to publish the advice of the Attorney General. We were conscious of this and that is why we want to introduce the legislation. We have consulted social partners on it and we will now move ahead. We want to close off any other potential opportunities. We do not want to see this replicated on land in Ireland.
Will the Minister explain again the taxation treatment of this redundancy payment? Why is it tax free?
It is called redundancy.
Deputy Martin Brady asked whether, if it was not declared to be redundancy in conformity with the Act, people would be liable to taxation, and I understand that they would be. I can get the details for the Deputy but that is the implication for the workers. If a decision was taken that the payment was not in accordance with the Redundancy Payment Acts, that would be the position. It is understood by all concerned.
Can I take it from the Minister's replies to Deputies Martin Brady and Catherine Murphy that extra, unusual representations were made by representative bodies in the context of this redundancy package because of the numbers involved? Could one deduce from that reply that a certain interpretation of the law, and the opinion given on it, which the Attorney General took 12 months to deliver and which remains secret, was such that the most benign interpretation of the legal advice was taken in respect of this package because of pressure of an exceptional nature being brought to bear?
That is not what I said.
It sounded like that to me.
Deputy Morgan asked if, at the time of the controversy, when Irish Ferries announced its decision, obstacles could have been put in the way then. In response I said that at the time, when the Labour Relations Commission was overseeing the negotiations between the two trade unions and the employer, there were different pressures on the participating parties. It would be wrong to take from that that representations were made to us in the context of the decision. This decision was based on the legal advice we received. We did not have any representations from the unions. The unions would not be happy with the determination made and they have articulated that. IBEC was anxious that the process would be speeded up one way or another.
Am I wrong in saying that a redundancy was described as not a redundancy to ensure the payments made by the company, Irish Ferries, to the 447 workers who agreed reluctantly to sell their jobs for a sum of money were not liable for income tax? Am I off the wall in saying that?
The Deputy is wrong. We should not read this and spin it out the wrong way.
That was the outcome.
Deputy Martin Brady asked a question seeking clarity on the tax status of a lump sum paid to workers which would not be in conformity with the Acts and I gave him a simple, straight answer to that.
If it was not a redundancy, it would be taxed.
Nothing can be deduced from that in the context of the motivation or rationale behind the decision that was taken. As I said, it is not a matter for personal preference. We must look at the law as it is, take the advice we are given and make a decision.
129 Mr. Howlin asked the Minister for Enterprise, Trade and Employment if he will report on his Department’s work towards the implementation of Towards 2016 to date; and if he will make a statement on the matter. [2523/07]
I am happy to report that my Department is making significant progress on commitments in Towards 2016. Work on the preparation of the necessary legislation to give effect to the comprehensive package of measures contained in the agreement concerning employment standards is being progressed as a matter of urgency. In addition, the additional resources identified under the agreement for compliance enforcement, adjudication and redress have been approved.
Preparation of the employment law compliance Bill is well advanced. Early consultation with the social partners and other interested parties is proposed as a prelude to seeking Government approval for drafting the Bill. I am committed to publishing the Bill in 2007.
The Director of the National Employment Rights Authority has been appointed and will take up duty on 12 February 2007. The advisory board will be established on an interim basis early in 2007. The headquarters management has been selected — some of them are already in place and the rest, including a legal adviser and accountant, will take up duty in the coming weeks. Recruitment and assignment of the remainder of the NERA staff will be progressed in the context of decentralisation arrangements with a view to the additional posts being filled from the second quarter of 2007. It is my intention that the trebling of Labour Inspectorate staff will be completed in 2007.
The protection of employment — exceptional collective redundancies — Bill is at an advanced stage of drafting. It will address cases of collective redundancies where specific situations apply and provide for the extension of unfair dismissals protection in situations where all employees are involved in dismissal following a strike. It is expected that the Bill will be published in a couple of weeks.
Draft legislative proposals to give effect to the commitments set out in Towards 2016 for the regulation of employment agencies and agency workers are at present the subject of discussion with the social partners. These discussions are nearing conclusion and it is intended that specific proposals will be considered by the Government during February. Subject to the Government's agreement, the proposals will then be sent to the Office of the Attorney General for drafting.
The Labour Relations Commission is finalising its work on the preparation of a code of practice for people working in other people's homes and it is expected that its work will be finalised within the next few weeks.
The Government is committed to preparing and publishing this year a Green Paper on pensions policy which will take account of the views of the social partners. There will be further consultations following publication and the Government is committed to respond to these within 12 months of ratification of Towards 2016 by developing a framework for comprehensively addressing the pensions agenda over the longer term.
The Government has agreed in principle in Towards 2016 to the transposition into Irish law of the optional pensions provision of the Transfer of Undertakings Directive and is committed to finalising its consideration of the issue by the end of 2007 following consultation with IBEC and ICTU on the implications of the options for transposition.
Work has commenced on the Green Paper and the issues arising in the context of transfer of undertakings. A partnership pensions review group, chaired by the Department of the Taoiseach and including the social partners and the Pensions Board, has been established to progress the issue.
On 29 November 2006, the Labour Court recommended that the minimum hourly rate of pay should be increased to €8.30 with effect from 1 January 2007 and to €8.65 with effect from 1 July 2007. By order signed on 20 December 2006, the Minister of State at the Department of Enterprise, Trade and Employment with responsibility for labour affairs gave effect to the court's recommendation.
New employment permit arrangements will come into effect on 1 February. The Employment Permits Act passed by the Oireachtas last year provides the statutory basis for the new schemes. The four new types of employment permit are the green card scheme, the work permit, the intra-company transfer permit and spousal and dependant permits. Workers under the new arrangements may apply and reapply for their own permits, with the exception of the intra-company transfer scheme.
Consultations took place with the social partners prior to the introduction of the new arrangements. The new arrangements provide that employment permit applications will not be approved for wages below the REA-ERO rate or the national minimum wage, whichever is appropriate.
New employment permits will contain a statement on the principal employment rights of the employee, including a prohibition from making any deductions from remuneration or seeking to recover any charge, fee or expense relating to the application for the permit. The new employment permit arrangements, in particular those relating to contracts for service supplied, will include provisions to ensure adequate safeguards to protect employment rights, including, in most cases, the requirement for employment by an Irish-based employer. Employment permit holders will be facilitated in transferring to another employment in cases of unfair treatment. The employment of non-EEA students will be made subject to employment permits in 2007. Work is under way to draw up a scheme to implement this.
Significant progress has also been made by my Department of other non-legislative workplace issues. In March 2005 a high level group was established to oversee implementation of the national workplace strategy. The first report of the implementation group which was sent to Government, was published on 3 August 2006. The report outlined the group's progress since its establishment. Achievements were noted under the strategy's five priority themes: promoting workplace innovation, promoting capacity for change, developing future skills, access to opportunities and quality of working life. Towards 2016 provides for the establishment of a three-year workplace innovation fund to enable the parties to the agreement and the NCPP to build a stronger commitment to workplace innovation by encouraging the development of new ways of working. On 10 January 2007, the Taoiseach announced that a sum of €9 million would be available to the fund. The fund comprises three strands as follows — promotion of innovation at enterprise level, support for capacity building among social partners and a public awareness campaign.
The research required to develop the national skills strategy provided for in Towards 2016 has been completed and will be published shortly. The review of the workplace learning and upskilling offerings available from the point of view of user friendliness-modularisation and future skills requirements among other things, is scheduled for 2007 and it may take the form of a number of sub-reviews. Towards 2016 also provides for the need to examine the availability of workplace learning and upskilling to lower skilled and vulnerable workers including in manufacturing as well as to workers from overseas. During the year my Department will invest nearly €70 million to train those already in employment. In addition, €130 million, a significant increase on last year's provision, has been made available to fund apprenticeship training programmes to cater for historically high numbers of apprentices. Under the NDP overall €2.8 billion in public funds will be invested in training people in employment, new skills for those affected by industrial restructuring, expansion and enlargement of the apprenticeship system and school leavers. Both FÁS and Skillnets have been asked to bring forward proposals to target low-skilled workers.
The high level group on manufacturing provided for under Towards 2016 has been established. Progress has been so rapid and extensive that I could go on forever. The first formal meeting of the group is scheduled to take place on 9 February 2007. The seventh framework programme, FP7, commenced on 1 January 2007. A new national support structure has been put in place to give practical effect to the stated Government priority on FP7. A key feature of the strengthened support structure was the appointment of a national director for FP7 who heads up a dedicated FP7 office based in Enterprise Ireland. The national director will ensure a co-ordinated approach is adopted in the provision of support to researchers and companies across all of the components of FP7.
Following the enactment of the Competition (Amendment) Act 2006, which revoked the Restrictive Practices (Groceries) Order 1987, I asked the Competition Authority to review and monitor developments in the grocery sector in light of the new regulatory environment. Since the removal of the order, the Competition Authority has received no complaints of anti-competitive behaviour in the sector, nor has it seen any evidence of such behaviour. The authority is currently putting its grocery monitor project in place. In April 2007 one year of post-groceries order data will be available for analysis. Later in 2007 the authority intends to publish an analysis of developments in the sector focusing on pricing trends, market structures and barriers to entry.
After ten years in office.
I refer to the labour inspectorate and the new national employment regulation authority, which is a key element of Towards 2016 because of the many concerns about abuses in the labour market. A total of 2.028 million are employed, which is a wonderful statistic, but fewer than 30 labour inspectors are in place to ensure workers and their employers comply with health and safety legislation and labour market regulation. When will the additional 60 labour inspectors be hired and deployed?
I am putting considerable pressure on the Department to move on this issue as quickly as possible. We are looking at putting the bulk of the staff in place in the second quarter of the year. The Deputy will appreciate recruitment processes must be engaged in but I am determined that the 60 additional inspectors will be appointed in 2007. The management team is almost in place. The director has been appointed and a legal adviser and accountant will be appointed in the coming weeks.
Where will they be based?
Carlow was the original location for the employment rights division of the Department but regional bases are also anticipated. That process has been completed and we are in a position to move on that. Inspectors will be recruited not only to the centralised agency but also to regional locations.
Written Answers follow Adjournment Debate.
