I move: "That the Bill be now read a Second Time."
As a result of the recent partnership talks on Towards 2016, it was agreed that this Bill should be enacted to provide for the establishment of a redundancy panel for the reference to it of certain proposed collective redundancies and for related action by the Minister for Enterprise, Trade and Employment. Members will recollect that the controversy surrounding the Irish Ferries case gave rise to this provision.
The opening up of the Irish labour market arising from the decision to permit direct access by citizens of the new EU member states has given rise to concerns about the possibility of the collective compulsory replacement of workers by lower paid workers from those states or elsewhere either directly or through the use of other replacement workers within the jurisdiction. In Towards 2016, there was agreement that this practice has the potential in certain circumstances to be harmful to the maintenance of good industrial relations. At the same time, there was full agreement on the need for co-operation with ongoing change in response to competitive pressures, as well as the need for adaptation and flexibility when market conditions require, since they will underpin sustainable employment and conditions in enterprises.
There is full recognition and acceptance that all parties to this agreement carry a responsibility to ensure their conduct is reasonable and that they act in good faith in dealing with the timely development, processing and implementation of competitive measures that may arise, as a consequence of which the best possible levels of employment and conditions can be assured.
The Bill provides for the removal of the upper age limit for entitlement to redundancy payments. It will also give effect to the judgment of the European Court of Justice in the Junkv. Kuhnel case regarding consultation with employees as required under Directive 98/59/EC being completed before notice of dismissal in given. The Bill makes consequential amendments to a number of items of legislation.
It is the Government's intention that the Bill be enacted quickly so that the protection it contains can be made available at the earliest opportunity. The Secretary General of the Department of Enterprise, Trade and Employment shall arrange for the provision to the redundancy panel of all secretarial and other services necessary for its efficient operation. The fees and expenses of the panel are expected to be minimal and are provided for in section 5. The costs to the social insurance fund of including over 66 year olds under the Redundancy Payments Acts is estimated to be in the region of €2.4 million per annum.
I would like to outline in detail the main provisions of the Bill. Sections 1 and 2 provide the Short Title and definitions of terms used. The definition of "industrial action" combines the content of the definition of "strike" in section 8 of the Industrial Relations Act 1946 and that of "lock-out" in section 6 of the Redundancy Payments Act 1967. The definitions of "Minister" and "Secretary General" are self-explanatory.
Section 3 provides for the duration of the panel and related matters. Under this section, the panel has effect only for the period of three years from the commencement of this legislation. The Minister may, by order made before the expiration of that period or of any extension of it, extend that period for a further period of three years if both the Irish Congress of Trade Unions and the Irish Business and Employers Confederation have requested the extension and the Minister is satisfied that the continued operation of the panel would be conducive to the continued orderly conduct of industrial relations.
Section 4 sets out what constitutes exceptional collective redundancies for the purposes of this Bill by reference to the Redundancy Payments Act 1967. Section 5 provides for the establishment of the redundancy panel, procedures to be followed in appointing its members and their re-appointment. The conditions of membership are also set out in this section.
Section 6 provides for referral of cases to the panel by employee representatives or the employer concerned by notice given in writing and addressed to the panel's chairman. The panel shall invite affected parties to make submissions to it in respect of the proposal. It shall give notice in writing to the Minister that either requests him or her to seek an opinion from the Labour Court on whether the proposal is a proposal to create exceptional collective redundancies or else states that the panel is of the opinion that the conditions for the making of such a request have not been satisfied. The panel must give a copy of that notice to the party from which the reference was received and other affected parties.
The redundancy panel may not make a request to the Minister unless it appears to the panel that the proposed collective redundancies are "exceptional" collective redundancies and the panel is satisfied that, in respect of the proposal, the party from which the reference was received has unsuccessfully sought to resolve the matter through local engagement. The panel must also be satisfied that the party from which the reference was received has acted reasonably, has not acted in a manner which has frustrated the possibility of reaching agreement to restructuring or other changes which may be deemed necessary to secure the viability of the business of the employer and has not had recourse to industrial action since the proposal was referred to it.
Section 7 provides that the Minister may, within seven days of receiving a request from the redundancy panel to do so, ask the Labour Court to issue an opinion on whether the collective redundancies proposed by an employer constitute "exceptional" collective redundancies. The Minister may also make a request the Labour Court on his own initiative if it appears to him that the proposed collective redundancies are "exceptional" collective redundancies. The time limit in this latter case will vary depending on whether the matter has been referred to the redundancy panel.
Section 8 provides for a hearing and the giving of an opinion to the Minister by the Labour Court that the proposed collective redundancies are "exceptional" collective redundancies or that it is unable to issue an opinion. The Labour Court may not issue an opinion unless it is satisfied that the party from which the reference was received was unable to resolve the matter through local engagement and has not frustrated the possibility of agreement to restructuring, and that no industrial action on the part of that party is current. No appeal shall result from an opinion given by the Labour Court under this section. The Employment Appeals Tribunal can make a decision on any question referred to it under section 39 of the Redundancy Payments Act 1967.
Section 9 provides that if the Labour Court issues an opinion that the collective redundancies proposed by an employer are exceptional collective redundancies and, having proceeded with the dismissals on the same basis as in the relevant proposal the employer applies to the Minister for a rebate under the Redundancy Payments Act 1967, the Minister shall have regard to the opinion of the Labour Court when considering the application for the rebate. If the Minister refuses to pay the rebate on the basis of the Labour Court's opinion, the exemption from income tax provided by section 203 of the Taxes Consolidation Act 1997 will not apply to lump sum payments made by the employer to employees who have been dismissed. Section 7 of the Unfair Dismissals Act 1977 has effect, with modifications, in the case of a dismissal that is one of a number of dismissals included in a collective redundancy that is determined by the Labour Court to be an "exceptional" collective redundancy. The compensation payable will be such amount as is just and equitable, but it may not exceed pay for 208 weeks in the case of an employee who had not more than 20 years of continuous service, or pay for more than 260 weeks in the case of an employee who had more than 20 years of continuous service.
Section 10 sets out the time limits before which dismissals may not take effect. An employer who effects a dismissal before the expiration of the period specified in section 10(1) of this Bill, or sections 9(3) or 12(1) of the Protection of Employment Act 1977, as the case requires, will be deemed to be guilty of an offence and liable on conviction on indictment to a fine up to €250,000. Sections 11 and 14 provide for the amendment of section 2 of the Protection of Employment Act 1977 to update the definition of "Minister", while section 22 does the same in the case of the Redundancy Payments Act 1979, as does section 24 in the case of the Unfair Dismissals Act 1977. Section 12 provides for the amendment of section 9(3) of the Protection of Employment Act 1977 to reflect the decision of the European Court of Justice in the case of Junkv. Kuhnel. Section 13 provides for the updating of penalties in the Protection of Employment Act 1977. Section 15 provides for the amendment of section 4 of the Redundancy Payments Act 1967 to entitle employees who have reached the age of 66 years to statutory redundancy.
Section 16 provides for the amendment of section 7 of the Redundancy Payments Act 1967. A new subsection 7(2A) will be inserted in the 1967 Act to ensure that the dismissal of employees will not be taken to be a dismissal by reason of redundancy if the dismissal is collective and is effected on a compulsory basis, and the dismissed employees are to be replaced at the same location or elsewhere in the State by other employees who are directly employed by the employer or other people whose services are to be provided to that employer in pursuance of other arrangements where those other people perform, or are to perform, essentially the same functions as the dismissed employees, and the terms and conditions of employment of those other people are, or are to be, materially inferior to those of the dismissed employees.
Section 17 provides for the amendment of section 38 of the Redundancy Payments Act 1967 to delete references in paragraphs (a) to (c) to certain powers which are no longer required to be exercised and to authorise deciding officers to make decisions under sections 29 and 32 in respect of certain payments from the social insurance fund. Section 18 provides for the amendment of section 39(16) of the Redundancy Payments Act 1967 to eliminate the requirement that the reference of appeals to the Employment Appeals Tribunal by deciding officers be made in a particular prescribed manner. Section 19 provides for the updating of penalties under the Redundancy Payments Act 1967, while section 21 will have a similar effect under the 1971 Act. Section 20 provides for the repeal of section 3 of the Redundancy Payments Act 1971, which imposes an upper age limit for entitlement to redundancy payments and section 23 repeals section 5 of the 1979 Act.
Section 25 provides for a technical amendment to be made to section 2 of the Unfair Dismissals Act 1977. It reconstructs a proviso, which was inserted into section 2(2) of the 1977 Act by the Unfair Dismissals (Amendment) Act 1993, within the new sections 2(2A) and 2(2B). The proviso relates to exceptions in certain circumstances to the general non-applicability of the Unfair Dismissal Acts 1977 to 2005 to fixed-term and specified-purpose contracts. The purpose of the amendment is to make it clear that the exception stated in the proviso covers all the types of fixed-term and specified-purpose contracts described in section 2(2) of the 1977 Act and not simply those referred to in paragraphs (a) and (b).
Section 26 provides for the amendment of section 5 of the Unfair Dismissals Act 1977 by providing that, in cases in which all the employees who are involved in a lock-out, strike or industrial action situation are dismissed, the reasonableness or otherwise of the actions of the parties is to be taken into account in determining whether the dismissals were unfair. Section 27 provides for the amendment of section 17 of the Employment Equality Act 1998. Section 27(1) is a technical provision that will overcome the misdescription of an amendment that was made in 2004 and section 27(2) will insert a new section 17(4) in the 1998 Act to reflect the abolition of the upper age limit for redundancy payments.
This Bill passed all Stages in the Seanad on 21 March last. I thank the Senators for their support and their comments. Some Senators, when speaking about the Irish Ferries situation, expressed their hope that this Bill will help prevent similar circumstances from developing on land. The Government intends to ensure that this Bill will give an enhanced measure of protection to workers who are compulsorily made redundant in circumstances in which they are replaced by workers on lower pay or worse terms and conditions of employment. It was pointed out in the Seanad that the payments which were made as part of the rebate paid to Irish Ferries were made on the basis of existing legislation.
Specific reference was made in the Seanad to the workers at the Castlemahon plant in County Limerick who wish to claim the 40% due to the social insurance fund from the liquidation. The Minister hopes to receive a payment as part of a preferential claim following the winding up of the company. As he has no discretion regarding the 40% that is due to the social insurance fund, he has no legal power to divert any of the money to the employees concerned if funds are recovered. A specific question was asked about the amount of funds currently held in the social insurance fund. The total amount of money spent by the fund in 2006 was €6.4 billion, of which approximately €165 million was paid in respect of statutory redundancy. Concern was expressed about the three-year term for the redundancy panel. The Minister may extend the duration of the redundancy panel if he or she is asked to do so by the Irish Congress of Trade Unions and the Irish Business and Employers Confederation. A warm welcome was given in the Seanad to the decision to take the opportunity afforded by this Bill to remove the age cap of 66 years for statutory redundancy payments.
I propose to make a small number of amendments to the text of the Bill on Committee Stage, mainly to reflect more accurately the wording of the agreement reached in Towards 2016. I acknowledge the work of the social partners in addressing the problems that arise in exceptional collective redundancy situations. The ability of the social partners to reach consensus shows the strength of the social partnership process. I thank the officials in the Department of Enterprise, Trade and Employment for the work they did in preparing the Bill, which I am pleased to bring before the House today. I hope we will be able to progress it through the House expeditiously. I look forward to hearing Members' views on the legislation.