Topical Issue Debate

Employment Rights

Deputy Jerry Buttimer

This is an extremely important matter which relates to the rights of workers in general and those of 32 employees at the Vita Cortex plant in Cork in particular. They have been exploited and denied those rights by their employer. This is the 27th day of their sit-in at the plant. These are dignified, decent men and women who have in many cases given more than 40 years' service to the company. The dispute in which they are engaged is centred on their being denied their entitlement to redundancy payments. I welcome the intervention of the Labour Relations Commission in respect of this matter earlier today. The commission has agreed to engage in discussions with the management of Vita Cortex and with officials from SIPTU to explore the possibility of obtaining a solution in respect of this matter.

It is important that a resolution which favours the workers should be arrived at because this matter relates to them and to ordinary people in general. There is an onus and an obligation on everyone, whether the Government, NAMA, the trade union movement and especially the owners and directors of Vita Cortex, to engage in this process and reach a resolution that ensures this group of people are paid the redundancy to which they are entitled.

There has been a restructuring of the company, asset stripping and a changing of the whole game plan regarding the directors and shareholders in what is, to me, a group of related companies in the same business. The workers in the sit-in have not interfered in any shape or form with the other companies in the Cork plant. Yesterday, I visited the workers, as I have done over the period. Vita Clean is working and operating, so it is important to put on the record of the House that the workers have not stopped the work going on in other parts of the company. It appears that assets have been taken out of the Cork company, including valuable equipment that has been moved to other sites. Despite all of this, it seems there has been a deliberate policy to wind down, close and deprive the people, in this case the Cork people, of their money and compensation. I look forward to hearing the Minister of State's reply and I will come back again with a supplementary question.

Deputy Micheál Martin

I thank the Ceann Comhairle for facilitating the raising of this issue this afternoon which is of significant importance to many people in the Cork area, especially to the 32 workers at Vita Cortex. All of us representing the area have met the workers and have been to the plant. The manner in which the workers have been treated is absolutely unacceptable and the overwhelming responsibility lies with the management of the company to meet its obligations to the workers. It is important that there is an interdepartmental response from the Government involving the Minister for Finance, the Minister for Social Protection and the Minister for Jobs, Enterprise and Innovation. There should be a more proactive response to this dispute. While I welcome the news today that the Labour Relations Commission, LRC, is to hold a fact-finding hearing next Tuesday, this should have taken place earlier and I call on the Minister for Jobs, Enterprise and Innovation to meet the workers and management on this issue.

The workers must continue to occupy and sit-in to try to get their rights. They were assured up to 16 December that they would get 2.9 weeks redundancy which, in the context of recent redundancy settlements and over recent years, is a modest and reasonable request from the workers. I call on the Minister for Jobs, Enterprise and Innovation to meet the workers and the management of the company. I call for a cross-governmental response because although the expedition of the application to the social fund will not solve the issue since it only deals with the statutory element, none the less it will be an important dimension to help the situation in which the workers find themselves.

I do not place the ultimate responsibility on NAMA, but none the less workers are watching bigger fish in the NAMA field, much bigger deals are being done in terms of hundreds of millions of euro and they are at a loss to understand how €2.5 million is frozen. They believe even a part of this could be released to meet their needs. It is difficult for workers in such situations on modest wages to understand the contrast in their perception of how others are being treated in the NAMA field compared with themselves. Will the Minister of State clarify today on the record of the House or, if he cannot, will he send me documentation relating to the legal basis upon which NAMA has made its decision? Is it the case that it is illegal for NAMA to intervene or is it the case that NAMA believes it could create an undesirable precedent to take steps to make a contribution to resolve this issue? The contributions must come from all sides and people must be imaginative and creative to try to find a way to realise the 2.9 weeks of redundancy payment that the workers seek.

Deputy Ciarán Lynch

I thank the Ceann Comhairle for granting me the opportunity to debate this matter along with the other Cork Deputies this afternoon. In September last year, the employer, Jack Ronan, and Vita Cortex informed the employees of the plant that he would make them redundant in December. At the time, the discussions indicated that the employees would receive 2.9 weeks for each year worked, and in some instances this is up to 40 years. During the period from September to December he said that he was in discussion with NAMA with regard to paying out the sum of money which, in total, came to €1.2 million. With redundancy payments having tax relief, this comes in at approximately €480,000. Jack Ronan's liability is less than €500,000 in this case. During that period he said that he was in ongoing discussions with NAMA and the workers. I came to the Dáil on 14 December and exposed this ruse. At no stage did NAMA state it would meet these payments because they were held in a separate account. No one knows better than Jack Ronan that NAMA is not a liable organisation in this case because Jack Ronan employed a financial company some years ago to restructure his companies and in such a way that liability would not travel from one company to another. No one knows better than Jack Ronan that the NAMA claim is a ruse. The fact is that Jack Ronan and his company must fork out the money and pay the €480,000.

There should also be a corporate examination of how this company restructured itself. One aspect of the company, Vita Cortex Cork, claims an inability to pay at present. However, there is also Vita Cortex Dublin, Vita Cortex Athlone and Vita Cortex Belfast and a host of other companies of which the same directors are in charge. It seems the shareholders and directors are the same for all of these separate companies.

It could be that the Department of Social Protection will have to pay the two weeks statutory redundancy to these workers and the Department will meet its obligations if it arrives in that place. Regardless of who pays the money, there should be a forensic examination of the company carried out to establish the interconnectivity between the different aspects of Vita Cortex holdings to ensure that if the taxpayer must pony up, it is the last court of recourse. A corporate structure aspect arises in this case and I am keen to know whether at any time there was any correspondence either from the Department, the union or any other entity to the Director of Corporate Enforcement to examine the corporate governance of this company. I welcome what the LRC has said as well. If Jack Ronan gets off the hook because of the way the company restructured its finances, we will see other companies taking the same model on board to escape their liabilities and the State will have to pony up in more circumstances. It is critical, therefore, that such an examination is carried out. Following such an examination we must consider whether legislation is required to ensure that the practice carried out legally by Jack Ronan in terms of corporate governance is changed. We must ensure that the laws are changed to ensure we do not see the type of skulduggery engaged in by his company to renege on payments to his employees.

Minister of State at the Department of Jobs, Enterprise and Innovation (Deputy Sean Sherlock)

I thank the Deputies for raising this issue. A number of points have been raised in each of the contributions. I thank the Deputies for raising this important matter and I thank the Ceann Comhairle for the opportunity to respond. I am concerned at the continuing situation at the Vita Cortex factory in Cork which has involved workers at the plant engaging in a sit-in since 16 December last arising from a dispute with their employer over redundancy payments. The workers involved in the Vita Cortex sit-in are seeking severance terms of 2.9 weeks per year of service, inclusive of statutory redundancy, in line with previous redundancy deals at the company, and they maintain this will amount to a total of €1.2 million. We know that the workers had been offered a paltry sum of €1,500 to leave the premises over the Christmas period and they rightly rejected this offer claiming that the company would use their absence to remove important machinery and stock.

The company stated that it informed workers that their redundancy would have to come from the State's social insurance fund unless NAMA agreed to release €2.5 million held on deposit by another Vita Cortex firm on foot of an Allied Irish Banks, AIB, loan taken over by NAMA. However, NAMA issued a statement that these funds were put out of reach of the Vita Cortex group not by NAMA but by AIB two and a half years ago when they were pledged as security for loans. While NAMA has stated that it empathises with the Vita Cortex workers, it has stated that: "unfortunately legally it cannot simply use charged deposit funds pledged against loans of one company to meet costs incurred by a separate legal entity". NAMA also stated that it is the responsibility of the owners and shareholders of Vita Cortex to resolve this situation. It is difficult to disagree with that contention. In the interests of achieving a resolution in this dispute, the Minister, Deputy Bruton, urged both parties to avail of the State's industrial relations machinery as soon as possible with a view to exploring ways of resolving the issues in dispute.

Officials from my Department were in contact with the workers' union representatives over the holiday period, in an effort to clarify the issues involved and to make them aware that the industrial relations machinery of the State is available to help them resolve the dispute. I understand that the Labour Relations Commission has today invited both parties to meet in Cork next Tuesday to clarify the facts and to explore with the parties the potential for moving forward. I welcome the initiative by the LRC and urge both parties to engage constructively in the process. Engagement with the State's industrial relations machinery offers the best way at this stage.

Deputy Jerry Buttimer

Thank you, a Ceann Comhairle for allowing me to raise this. No employer should be allowed to turn its back on its workers, or to strip away a company so that it can ride scot free into the sunset. It cannot ignore its legal responsibilities.

I know the previous Government restructured NAMA and we are now seeing that the way it was restructured is wrong. NAMA has much to answer for in the wider spectrum, but also in this case. I would like to see NAMA representatives explain their role better. I e-mailed NAMA three times, and while I got a reply the first time, on two further occasions I received no reply.

The bottom line is that I want to see a group of decent ordinary people getting their money and being told they will get their correct entitlement. A whole web of inter-company transactions has effectively stripped the assets from the Cork company, and we cannot allow this to continue.

Deputy Micheál Martin

I thank the Minister of State for his reply. I rang the Minister for Finance before Christmas and he got the Chairman of NAMA to ring me and he said that it would be ultra vires of NAMA to become involved. I would like to get the precise legal basis under the Act upon which it cannot get involved. Having said that, the responsibility lies with the employer. Getting a solution to this for the workers is my primary concern, and I know the Labour Relations Commission is now going to have a hearing. Does the Minister of State have any indication of the pathway to be pursued by the LRC with a view to resolving this? What issues will it raise with management and unions to get a satisfactory conclusion? I know the hearing is about clarifying the facts, but is there a mechanism that can derive a contribution from the employer and a resolution of the issue?

Deputy Ciarán Lynch

I thank the Minister of State for coming into the Chamber and giving us a response this evening. The principal point is that the primary person with responsibility to his workers is Mr. Jack Ronan, as the major shareholder in Vita Cortex. Before any suggestion is made that the State should cover these costs, every stone should be turned over to make sure that he cannot avoid those costs. Regrettably, Mr. Ronan has restructured the company in such a fashion that the liability might not actually be realised. However, on the week the factory closed, a significant piece of machinery was moved from the plant in Cork to Athlone. It is still hard to establish how that machinery travelled up the road. I understand that the plant in Athlone is a separate company, but I do not know if an invoice or some charge was put on the transfer of that machinery. If that machinery was transferred to another plant, it means there is a cost arising from it. I believe the company wants to transfer more machinery up the road to Athlone as well. The moneys accrued from the transfer of that machinery can meet the cost of the redundancy payments. Any income that Mr. Ronan derives from stripping the plant on the Kinsale Road should be ring fenced.

I welcome the LRC's announcement today. The LRC should engage the Office of the Director of Corporate Enforcement, because there are serious concerns regarding corporate governance in this country, and regarding employers' actions in the future that will enable them to avoid their payments in a similar manner to what Vita Cortex is currently doing.

Deputy Sean Sherlock

The ultimate aim is to ensure that the rights of workers are vindicated. We all have that interest at heart. The second aim is to ensure that corporate social responsibility is adhered to and that there is some degree of corporate governance. I agree with the Deputies on the perceived Byzantine structures of Vita Cortex. We must also remember that Vita Cortex was a recipient of State funding. It would be in the interests of this State to ensure that we can shine a light on those companies in some way. If there is a mechanism through which a query can be made to the Director of Corporate Enforcement about the company structure, then I actively encourage people to use it.

It is impossible to say at this stage what the premise of the discussions will be. The LRC extended the invitation just today and I hope that both parties will agree to engage in that process. We should see where we can go from there. Other points were raised in respect of the Minister for Jobs, Enterprise and Innovation meeting with both sides and with company management. I will take back those points to the Minister.

We need to ensure that the State will use its force in a positive sense to ensure that workers' rights are vindicated. We are not going to rest on that-----

An Ceann Comhairle

If Members wish to raise this matter again after the other discussions have taken place, I will consider it favourably.

Deputy Micheál Martin

Thank you.

Deputy Sean Sherlock

I acknowledge the point made by Deputy Martin about the legal basis of NAMA's position. I will also bring that to the Minister.

Job Losses

Deputy Joanna Tuffy

I raise the issue of the rights and entitlements of the La Senza workers. I ask the Minister about the treatment of the workers and the way the issue has been dealt with by their employers. The employees got virtually no notice that they are about to be made unemployed. Some people were phoned and told not to turn up for work the next morning. The Liffey Valley workers turned up for work on Monday and were told to help the removal men who were there to pack up the store's contents. They were not given any written notice that they were being made redundant. There was no attempt to engage them, as there should have been under the terms of the redundancy. An issue arises out of that. People have no documentation and they have not been paid their wages for the month of January, including overtime and Sunday payments, but they are not able to sign on and get social protection.

How can a company get away with this? It knew this was coming down the line. It might not have told its employees, but there were reports of the company going into administration at the end of December on the BBC. The company gave the workers the impression that they would be told what was happening, that they would be given notice and so on. It got them to come in and work long hours. The workers came in and worked in good faith, but they got no pay for that work. As a result, the company has made huge profits over the past month. It has taken that money out of the country, while stating that it will not pay redundancy for the workers and that the State will have to pick up the tab. What is being done about that?

The parent company, Lion Capital, is hugely profitable and has large amounts of money at its disposal. Other stores in the La Senza chain have been sold off and will continue to trade, so this should be examined.

Deputy Richard Boyd Barrett

On Monday, 114 workers in the La Senza lingerie chain were informed by either e-mail or phone call in curt notifications that their jobs were gone. They were not given information about the work they did over Christmas. There were no P45s given out, so they are unable to sign on. It is outrageous and shameful treatment of these mostly young women workers, single mums, people with mortgages and students who have been left high and dry by the company, La Senza, and by the administrators, KPMG, who must have known this was coming and allowed these workers to continue to work over Christmas in good faith believing they would be treated properly and receive proper notification of any change in their position.

They cannot sign on and they do not know about redundancy. If it must be paid by the State it could be a year before they receive it and they have no idea when they might be paid the moneys they are owed for Christmas. It is bad enough to treat workers like this at any time, but to do it just after Christmas is absolutely horrendous. Yesterday, some of the workers at the occupation were in tears telling me about their plight.

We do not just want a condemnation of La Senza, although it is roundly deserved. We want the Government to use its influence and contact KPMG to demand it immediately appoint an administrator and that the workers' wages are immediately paid. The Minister should move to urgently fast-track social welfare applications so the State provides assistance to these workers and they can sign on.

This speaks to a bigger problem. La Senza is just the latest victim of the retail collapse in the country and the latest of the tens of thousands of victims of the austerity which is crippling the economy. At the very least, if the Government is to continue with austerity it should put in place legislation or some type of insurance fund to protect workers who are left high and dry by unscrupulous employers.

Deputy Seán Crowe

I welcome some of the La Senza workers who are in the Visitors' Gallery. My colleague, Mr. Eoin Ó Broin, and I were at the Liffey Valley store this morning. There is much support from local people. People are shocked by what has happened. Is it not right that an employee who has worked for a company for nine and a half years is told on a Monday morning by seven heavies that her job is gone with no communication, phone call or e-mail? She still has not been officially told whether her job is gone, but the stores are closed.

This company is making fools not only of the staff but of Irish taxpayers and of the legislation on workers' rights. Will we allow the company to get away with this? This is the real question people want to ask. Is there any way to stop this? Other people have spoken about the fact that the workers have no proof they have lost their jobs and this is a difficulty in itself. The only way the workers can prove it is that the trade union in which some of them are involved can provide a letter of comfort to the Department of Social Protection. It highlights the difficulties in this regard and the importance of being members of a trade union.

In a number of cases people have taken slices of companies and the only people left without their payments are the workers. There is something wrong with the legislation if it allows this to happen. A portion of the company has already been sold off and €6.5 million in profits was sent to Britain after December. All of the workers in the Visitors' Gallery worked overtime and have not been paid. When will they be paid? We can go through tribunals but how long will this take with a waiting list of 35,000 people? It could be two years before these people are paid. Something is wrong and we need to fix it.

Deputy Mary Lou McDonald

I also welcome the workers and their trade union representatives. I commend them for standing their ground. A very important message needs to go from this Chamber to unscrupulous employers - we previously heard about the situation in Vita Cortex in Cork - that there is no free-for-all and that things being tough and being in recession are not a green light for every dodger and chancer to trample all over the rights of workers.

There are probably not sufficient words to describe the contempt with which the employers have held the staff of La Senza. Their behaviour has been utterly despicable with wages not being paid and overtime and bonuses being owed. In many cases, they did not even have the simple courtesy to phone people to tell them their jobs were gone.

The workers have taken their stand and they are quite correct to do so. They want to know whether they have our support. For our part in Sinn Féin they absolutely do. The question is whether they have the support of the Government. What does the State propose to do to vindicate the rights of this group of workers? If we do not take a stand in this case and in respect of Vita Cortex we can fairly predict an onslaught on workers in the retail sector and other sectors the like of which has never been seen. This is not acceptable and we need to state this loudly and clearly I ask the Minister of State to tell us what the Government proposes to do and to articulate in the clearest terms his absolute support for the workers and their action.

Deputy Joe Higgins

I welcome the representatives of the La Senza workers to the Visitors' Gallery and I am in solidarity with the Vita Cortex workers suffering from similar high-handed disgusting treatment. It is breathtaking in its arrogance and disrespect towards the up to 120 mainly female workers in the La Senza lingerie stores in Dublin and Cork that the company waited until the workers had left work on Monday evening to inform them by random phone calls - through the agency of KPMG doing the dirty work for the company - that they need not come in on Tuesday morning. It is beneath contempt that ordinary workers were told the company did not have the phone numbers of their colleagues and were asked to phone and tell them, including a manageress who worked loyally for the company for eight or nine years. It is absolutely incredible.

The workers are victims of the private equity vulture company, Lion Capital, which in the most callous way planned to walk away from its workforce to maximise its profit, handing it over to another company which will be equally ruthless, and treating these workers in the most disgusting fashion. This is capitalism red in tooth and claw and must be challenged.

Fine Gael and Labour Party Deputies come here and champion workers. They are the people who make and stand over the laws. For a change, let us have emergency laws to allow workers to receive their rights and to stop these gangsters behaving in this gangster-like fashion.

I call on the Irish Congress of Trade Unions and its leaders to come out of hiding and meet fire with fire. They should mobilise the power of working people in the country to stand together with the Vita Cortex and La Senza workers. Workers standing together will show the power they have, forcing the Government to act and these companies to pay what they should.

Deputy Derek Keating

The company made a profit of €100 million last year.

Deputy Sean Sherlock

No one political entity in the House has a monopoly on the rights of workers. I spoke with regard to the Vita Cortex case, in which there is a serious breach of corporate social responsibility and corporate governance, and the same applies in respect of this case. There is no question but that the rights of workers have not been vindicated and have been trampled upon. Under legislation from 1977 to 2007 governing the protection of employees, a number of provisions deal with an information and consultation process that must be entered into prior to any redundancies being implemented and the provision of information to employees and to the Minister for Jobs, Enterprise and Innovation. In this case, the Minister has not received any statutory notice of such redundancies. That is a serious breach in the first instance. There is a need for my Department to engage with Mr. Meegan and others of Mandate who, it is reported met KPMG today. I would like to get an assessment of what transpired at that meeting because the points raised on this and the previous Topical Issue matter go to the heart of industrial relations policy and vindicating the rights of workers. As a Government, we must ensure there are no precedents set and the legislation is adhered to by corporate entities, individuals and citizens. There is no question that we support the rights of workers as set down in legislation and will seek to do so.

By way of being helpful, I express my willingness to meet workers representatives on this issue in order that we can provide some degree of assistance where possible. I am keeping my statement brief because I realise Members will wish to make further submissions.

Deputy Joanna Tuffy

I welcome the points the Minister of State has made. In my previous submission I said that some of the La Senza stores were sold to a company, Alshaya, under a prepack deal in respect of administration whereby it was allowed to buy up the assets and the debts are written off. Given that some companies are opportunist, it is important to ensure they are not allowed to speculate when it comes to people's jobs and rights. If this is a new phenomenon, it needs to be nipped in the bud. I join others in commending the workers on taking a stand because these are important issues for all workers.

Deputy Richard Boyd Barrett

It is a welcome step forward that the Minister of State has indicated his concern for the workers' plight and is willing to meet them, but what the workers want to hear is concrete commitments to deal with their situation. Will the Minister of State contact KPMG and tell it to pay the workers the moneys, salaries and bonuses owed? Will the Minister for Social Protection fast-track their social welfare applications and ensure they have immediate financial assistance given that they have not been paid their wages? Will the Government introduce emergency legislation to ensure employers cannot do this and that an insurance fund is set up for workers who are left high and dry by employers? What the workers want is concrete action, not just words of concern.

Deputy Seán Crowe

There is a need for stronger legislation in this area. I do not know if anything is being done at EU level on this issue given that the company is spread across a number of frontiers. The issue is what support can be provided for the workers. If workers are summarily dismissed without wages or redundancy, something is wrong. It means there is a need to strengthen the legislation in this area.

Deputy Mary Lou McDonald

The Minister of State has added another piece to the puzzle, that is, that the employers have thumbed their nose at the Minister, Deputy Richard Bruton. Clearly, they have a disregard not only for the workforce but the law of the land. What is required is not simply sympathetic words. While I acknowledge the Minister of State's sincerity in that regard, the workers need to know he will be proactive by getting in touch with KPMG or anyone else as required and that the will pursue this matter vigorously. Today it is the La Senza workers; tomorrow it could be any other group of workers. The law has been broken. Will the Government intervene in a proactive manner to ensure the law is respected and the rights of the workers are vindicated?

Deputy Joe Higgins

There are many precedents in this area. Several years ago, Thomas Cook workers were in the same situation and left in the same disgusting and disgraceful fashion. When they correctly occupied the premises, the Garda was sent in with battering rams to break down the doors. The Thomas Cook workers were paraded in front of their lordships at the High Court and threatened with Mountjoy jail if they persisted to fight for their rights. I am afraid the law, on balance, is on the side of the bosses, employers and the unscrupulous vulture capital companies. The workers in the La Senza case are chasing their statutory entitlements from the taxpayer while Lion Capital walks off with massive profits. This is not a matter for dreaming about but in which action needs to be taken now. We want to know what the Minister of State will do today and tomorrow.

Deputy Sean Sherlock

I acknowledge the points made by the Deputies and I am not one to pay lip service to issues such as this. With respect, I have indicated that I want to meet the workers' representatives on this issue. I am concerned, as Deputy McDonald has pointed out, that there is a perceived breach of legislation. There is a perceived breach of legislation in respect of sections 9 and 10 of the Protection of Employment Act 1977 and Regulation 6 of the European Communities (Protection of Employment) Regulations whereby employees, whose employer has not complied with sections 9 and 10 of the Protection of Employment Act 1977, may refer complaints to a rights commissioner. There are issues around the mandatory notice to employers. Please allow me that mode of communication and let us see how we can proceed.

Tax Collection

Deputy Barry Cowen

The budget announced by the Minister for Finance, Deputy Michael Noonan, on 7 December provided for additional taxation receipts from the targeting of pensioners by the Revenue Commissioners, even though the initiative only emerged last week following demand letters being received by pensioners.

Fine Gael and Labour promised the people they would be upfront and honest with them at all times. In this case, the simple truth is that Fine Gael and Labour factored revenue into the budget a month ago from a planned tax compliance initiative aimed at 115,000 pensioners but failed to inform the pensioners of what was in the pipeline in the hope that their party political interests would be protected.

In the budget documents produced alongside the budget last month, the Department of Finance estimated that an extra €45 million would be collected in 2012 and €55 million in a full year arising from additional enforcement and compliance measures by the Revenue. I quote from the summary of the Estimates:

In recent years the Revenue Commissioners have sought and obtained an increase in their ability to obtain information on payments made by Government bodies and others to third parties. In addition, the Commissioners have continuously upgraded and extended the range of information they receive from the Department of Social Protection. This additional compliance activity from these new enhanced information sources allows the Commissioners to improve its collections.

While the Government has sought to hide behind the Revenue since news emerged of this initiative targeted at pensioners, the truth is that the Government factored into its budget a month ago the expected yield from the initiative. The Government made a political choice not to reveal the details of the initiative at budget time and, instead, allowed the Revenue to scare the living daylights out of thousands of pensioners around the country.

While every citizen has a duty to be fully tax compliant, the manner in which this initiative has been handled has caused widespread confusion and unnecessary fear among pensioners. The Government could have put the full information on the compliance initiative in the public domain as part of the budget to allay concerns of pensioners. That would have allowed them to be fully informed. Instead the Government decided pensioners would receive out of the blue an alarming letter from Revenue; it watched their reaction and then hid behind the same Revenue officials. The chairman of the Revenue Commissioners apologised at today's meeting of the finance committee. He acknowledged that many things could have been done differently by Revenue in its correspondence with pensioners. In recent days Revenue has met various representative bodies of those affected. We welcome this and the clarity it has brought to the matter.

It is now time to ask questions of the Government on the matter. Who in the Government thought it would be a good idea to land just after Christmas a letter on the doorsteps of 115,000 pensioners to inform them that they were not tax compliant? This was done without warning or an explanation or clarity on the approach to be taken. Who in the Government knew that this letter was coming and why did they not insist on there being a proper public information campaign before any such letters were issued? At a time when people are already concerned about how they will manage in the year ahead, terrifying them with the label "tax defaulter" shows a complete lack of empathy and understanding. Did the Revenue Commissioners inform the Minister for Finance, Deputy Michael Noonan, that the mailshot was about to be issued? If so, why did he not believe it was necessary to inform those who would be affected and if not, why not?

Deputy Minister of State at the Department of Agriculture, Food and the Marine ( Shane McEntee)

I am replying on behalf of the Minister for Social Protection, Deputy Joan Burton.

In recent years the Department of Social Protection has been actively engaged in data matching with other Departments and public bodies for control purposes. To this end, an extensive legal structure is in place to support the sharing of data for the purposes of controlling the entitlement to and payment of benefits. The legislative provisions that allow for the specific sharing of data with the Revenue Commissioners and other Departments and agencies are contained in section 261 of the Social Welfare (Consolidation) Act 2005. In exercising these functions the Department also operates in accordance with the relevant data protection legislation.

One of the Department's primary relationships in data sharing is with the Revenue Commissioners. In recent years bilateral liaison with Revenue has been improved through the establishment of a high level group at management board level, the purpose of which is to ensure ongoing collaboration and interaction between the two bodies, including on social welfare fraud and tax non-compliance issues. The two organisations are working together with a view to aligning expertise and information across their operations. In this context, a number of working groups have been established which are looking at a range of specifics issues, including that of social welfare fraud and tax compliance. In this context, it is important to emphasise that data exchange operates on a two-way basis between the Revenue Commissioners and the Department and has been ongoing for many years.

On the information provided by my Department for Revenue, data relating to short-term benefits such as illness benefit, occupational injury benefit and jobseeker's benefit have been provided for some time on a weekly basis. Information on some other long-term schemes, including long-term disability-illness benefit, child benefit, carer's allowance and one-parent family payment, is provided for Revenue on an annual basis.

On foot of a specific data matching exercise carried out by the Department in late 2011, following work done by one of the high level group's sub-groups, as outlined, some 563,800 records of pensioners were provided for the Revenue Commissioners in early December. The data in question related to customers in receipt of five social welfare payments, namely, State pension,contributory State pension, transition State pension, non-contributory State pension, widow's-widower's-surviving civil partner's pension and invalidity pension. The data provided contained the customer's PPS number, name, pension type and rate of payment. Although data in respect of this customer group were provided occasionally in the past, they were not previously given on a bulk basis. However, the development of new technology in the Department has facilitated the provision of this data in a complete and continuous manner.

It is important to recognise that this is all part of an ongoing policy to enhance data sharing between the Department of Social Protection and other public service bodies. As technology develops in the Department and elsewhere, it is expected that the exchange of data with other organisations will continue to be improved. The Department has been sharing data with other Departments and agencies for many years. Since 1997 it obtains commencement of employment data from Revenue which are matched against social welfare claims and relevant cases are investigated, where necessary. Information is also received on a daily basis on PRSI collection and, on a more ad hoc basis, certain tax exemptions and other tax heads. Other examples of ongoing co-operation include data matching and sharing of information with the Irish Prison Service which provides data for my Department on a weekly basis; the Department of Education and Skills which provides student data; the Commission on Taxi Regulation which provides data on taxi and hackney licences; the Probate Office; the Private Residential Tenancies Board; and the Health Service Executive.

The taxation of pensioners and all citizens is primarily a matter for the Revenue Commissioners. However, in the case of social welfare payments which are subject to tax, my Department notifies its customers that their payments are taxable and that they should contact their local tax office in this regard. A notice to this effect is contained in the award letter issued by the Department to the customer. The information leaflets for each of the relevant schemes also contain a reference to potential tax liability.

Deputy Barry Cowen

I thank the Minister of State for his response, despite the fact that it does not deal with the substantive question put to him.

An Ceann Comhairle

I am sorry but the request concerned the transfer of information on pensioners' tax liability from the Department of Social Protection to the Revenue Commissioners.

Deputy Barry Cowen

Yes. There has been an exchange of data between Departments for a number of years and the transfer of information was enhanced in the recent budget. That is what was said, but, unfortunately, it did not go much further and tell us what exactly had been enhanced and for what reason.

The question to which I hoped the Minister of State would respond was related to the fact that 115,000 pensioners had essentially been labelled as tax cheats, despite the fact that the vast majority of them had no idea that their liabilities had been miscalculated. This has caused great distress and confusion for many of the most vulnerable and older people. We acknowledge that the chairman of the Revenue Commissioners appeared before the finance committee today and apologised for Revenue's role and the manner in which people had been notified. What role did the Government play in this fiasco? Who in the Government thought it would be a good idea to land such a letter on the doorsteps of the people concerned immediately after Christmas without giving any warning, an explanation or there being clarity on the approach to be taken? Who in the Government knew that the letters were being sent and why did they not insist on there being a proper public information campaign before the letters were issued? Did the Revenue Commissioners inform the Minister for Finance that the mailshot was about to be issued and, if so, why did he not believe it was necessary to inform those about to be affected and if not, why not?

An Ceann Comhairle

Thank you, Deputy.

Deputy Barry Cowen

The Taoiseach said yesterday that the approach to be taken by the Revenue Commissioners would have to be improved. What role did he and the Cabinet play? When was the issue discussed and agreed to by the Cabinet? Was it last November? When the budget was announced, the measure on the enhanced transfer of information was sneaked in.

An Ceann Comhairle

We are over time.

Deputy Barry Cowen

The reality is that it came home to roost in January.

The Taoiseach

It was not a Cabinet decision.

Deputy Barry Cowen

If not, why not?

An Ceann Comhairle

It would be helpful if Deputies were to state clearly the information they are seeking when applying to raise a topical issue. This request related to the transfer of information.

Deputy Shane McEntee

It has been made clear that in the transfer of information and data there is co-ordination between various institutions and the Department. I have given a reasonable reply to the question asked. Everyone regrets that 115,000 letters were issued without warning, but that is the way it is. I have outlined what happened and the issue has been addressed by way of people apologising earlier today for the manner in which the letters had been sent. The matter had to be dealt with and was dealt with. If the previous Government had been working on such measures and Ministers had been in control of their Departments, there might not have been such a scenario.

Deputy Billy Kelleher

For how long will the Government blame the previous tenants for the state of its dirty kitchen?

Local Authority Charges

Deputy Alan Farrell

As the Topical Issue matter suggests, I am looking for an exemption under section 4.4 of the household charge legislation to grant exemptions for homes affected by the pyrite epidemic that has befallen a large number of home owners, in Leinster primarily, over recent years, estimated at 20,000 homes across north Dublin, Meath, Kildare and parts of Louth. This also presents a significant health and safety risk to home owners because of the pyrite swell in the floor slab which can cause problems opening and closing doors and in itself requires considerable remedial work. I know from my experience with my own home that this work can take a number of weeks. I ask that the Minister of State would entertain the possibility of including these homes in the list of properties exempted from the household charge. The homes affected could be termed as being in unfinished estates because these in turn will become building sites to resolve the issue. My personal experience is that the work took eight weeks and I have heard of other cases where it has taken several months to complete the work. This means the estate is in fact a building site and is therefore unfinished. I ask the Minister of State to recognise that fact.

I wish to acknowledge the establishment of the pyrite panel which will allow the individuals in question to deliberate on the possibilities for dealing in future with properties affected by pyrite. I hope the advice given to the Minister of State by the pyrite panel would include a gesture by the Government to exempt these properties. In recent months, the Government which I support has taken considerable steps in recognising pyrite. We have done more in nine months than the previous Government did since the problem came to light in July 2007. This problem affects the constituencies of the two Ministers of State present in the Chamber and at least two of my colleagues beside me who represent constituencies where this issue is very prevalent. As a home owner living in an estate with this issue, I would welcome the Minister of State's recognition of that fact by a granting of this exemption.

Minister of State at the Department of the Environment, Community and Local Government (Deputy Fergus O’Dowd)

I thank Deputy Farrell for raising this important issue. As he has made clear, the Minister, Deputy Phil Hogan, has already taken appropriate measures to address problems arising from the presence of pyrite in hard core material under the concrete ground floor slabs in housing developments.

In September 2011, the Minister established an independent panel with the remit of seeking to facilitate a resolution of pyrite contamination in private housing. This panel is chaired by Mr. Brendan Tuohy, a former Secretary General at the Department of Communications, Energy and Natural Resources. Other members are Mr. Noel Carroll, a former senior housing adviser in the Department of the Environment, Community and Local Government, and Mr. Malcolm Edger, a civil engineer. All three members have engineering backgrounds which is essential to the understanding of the complexities of the pyrite problem and they also bring a broad range of other skills to the panel. The panel is currently engaged in a broad-ranging consultation process with key stakeholders, including public representatives, industry representatives, including quarries and their representative bodies, local authorities, representative bodies of the insurance and banking industries, regulatory bodies and representatives of home owners affected by pyrite. The Minister has asked the chairperson of the panel to ensure its task is completed in as short a time as possible and to submit a report to him early this year. The Minister has indicated he will place this report in the public domain.

However, it must be understood that responsibility for compliance with the building regulations rests with the owner of a building and-or the builder or developer who carries out the work. The State bears no liability, a position supported by the outcome of the recent High Court case in which the quarry which supplied the hard core for a construction project was found liable for the supply of defective pyrite material. The case is currently under appeal to the Supreme Court.

As regards the household charge, the Minister will give further consideration to the position of owners of certain pyrite affected houses upon receipt of the report of the panel. The Minister will also need to consider issues surrounding the identification of relevant problematic properties.

The Local Government (Household Charge) Regulations 2012 contain the list of unfinished estates to which a waiver of payment of the household charge will apply in 2012. This list is also available from the website, www.householdcharge.ie. Some estates which are in Deputy Farrell’s constituency may be included in that list.

Deputy Alan Farrell

I thank the Minister of State for his response. I am delighted to note that the response does not dismiss my suggestion of the possibility that the Minister and the pyrite panel might take on board the suggestion. Through no fault of the home owners, considerable expense will be required to rectify this problem. I would welcome the opportunity to speak to the pyrite panel members as I understand they will finalise their deliberations soon. Perhaps the members of the pyrite panel and the Minister might attend the Joint Committee on Environment, Transport, Culture and the Gaeltacht to discuss this matter further. I thank the Minister of State for his comments.

Deputy Fergus O’Dowd

I will ensure the Minister, Deputy Phil Hogan, is informed of the Deputy's views and suggestions and that he will respond directly to Deputy Farrell as soon as possible.

Dáil Éireann debate - Wednesday, 11 Jan 2012