JOINT COMMITTEE ON ENTERPRISE AND SMALL BUSINESS debate -
Tuesday, 13 Sep 2005

Non-Payment of Redundancy Moneys: Presentation.

Chairman

We shall move to item No. 2 on the agenda, a discussion with the Department of Enterprise, Trade and Employment on the non-payment of redundancy moneys to workers at Tullybeg Retirement Village, also known as Rahan Nursing Home, located in County Offaly. I ask members to bear with us for five minutes.

I welcome Mr. Seán Ward, principal officer, and Ms Margaret Burns, assistant principal officer, from the Department of Enterprise, Trade and Employment. The joint committee agreed to Deputy Olwyn Enright's request to discuss this matter. I joined the Deputy in her request because many of my constituents are caught in this dilemma in County Offaly. I am sure the representatives heard earlier that members enjoy a privilege that they do not. I ask Mr. Ward to make his presentation to the committee.

Mr. Seán Ward

I should state in advance that redundancy is an employment right and that if somebody is made redundant, the employer is obliged to pay the statutory redundancy amount to the worker concerned. When the employer does so, he or she then claims a rebate from the Department of Enterprise, Trade and Employment from the social insurance fund.

When we first heard about the situation at Tullybeg Retirement Village, two officials of the Department of Enterprise, Trade and Employment travelled, by request, to an off-site venue in Rahan, Tullamore, to meet groups of employees of the Tullybeg nursing home. They met relays of approximately four people at a time. A total of 65 employees were made redundant but not all of these are entitled to statutory redundancy as they do not have the required service of a minimum of two years. The main provisions of the Redundancy Payments Acts 1967 to 2003 were explained to the workers by the officials.

When the employer pays the statutory redundancy to the employees, he or she then claims a 60% rebate from the social insurance fund. Where the employer is, for some reason, unable to pay, he or she completes and signs the statutory forms which means the employees can claim the money directly from the fund. Where neither of these situations occurs, the employees must refer the matter to the Employment Appeals Tribunal which makes a determination in the matter. If the employees receive a favourable decision from the tribunal, payment will be made direct to them by the Department of Enterprise, Trade and Employment.

I have given members a note on which the legislative background is explained, with a general note on the redundancy scheme. Further leaflets are available and we are available to answer any questions.

Deputy Hogan

I thank the officials for their attendance. This matter has caused a considerable amount of unease and people are picketing Tullybeg nursing home. They do not want to be there but feel that wages, entitlements and redundancy for a considerable time are due to them. It does not make sense that the owners would claim an inability to pay as land with a price tag of approximately €6.5 million is for sale. What quick action could be taken to ensure that people were not left in limbo as they are in Tullybeg but get their wages and entitlements? What powers and resources can be made available to resolve this quickly in the interests of the employees?

Chairman

I support Deputy Hogan in this regard. It is a neighbouring constituency to mine and some of my constituents are involved in this unfortunate predicament. How many of the 65 employees are not entitled to the statutory redundancy? Mr. Ward has mentioned that there are 65 employees affected but not all of them are entitled to redundancy.

Ms Margaret Burns

Approximately 55 people would be entitled to a redundancy payment. Others do not have the requisite two years of service and are not entitled to redundancy. They are aware of this and it is not at issue.

Chairman

What happens to the ten people concerned in that regard? Will they receive no payment whatsoever?

Ms Burns

No.

Mr. Ward

The issue will be resolved most speedily if the employer is willing to sign the forms for the employees, regardless of whether he owns land or is able to pay. We can then address the redundancy issues later. If we pay the workers the full amount, based on the employers inability or unwillingness to pay, we then put a priority debt against that employer which will be claimed when the land is sold. We do not ask workers to wait upon that particular scenario or for the land to be sold. We merely want the employer to sign the forms, thus admitting to the employees entitlements without paying them any money. In such a situation, our customer service target is to provide payment within four weeks and sometimes we improve upon this. If the employer will not sign the form, a dispute between worker and employer ensues. Appearance before the Employment Appeals Tribunal is the statutory means set out in the redundancy Acts to address such an issue.

Deputy Hogan

When does Mr. Ward think it will be heard?

Mr. Ward

That will represent a difficulty for the workers. The national waiting period is approximately 35 weeks.

Chairman

In the meantime, nothing can be done.

Mr. Ward

In terms of statutory redundancy entitlements, nothing can be done.

Deputy Hogan

That is an unsatisfactory state of affairs. Can the Minister for Enterprise, Trade and Employment or his Department intervene with the Employment Appeals Tribunal to determine whether this matter may be treated urgently? The owners of the property rather than the workers are at fault.

Mr. Ward

The Employment Appeals Tribunal is under the aegis of the Department but it is independent. I cannot provide any assurances for the committee.

Deputy Hogan

Will Mr. Ward make representations to Minister on the basis of the committee's view?

Mr. Ward

We will certainly report back to the Employment Appeals Tribunal.

Chairman

Other than the appeals tribunal, is any avenue open to the workers? May a short-term financial allocation be provided by the Department until their appeals are heard? Is there a precedent to provide one?

Mr. Ward

There is no precedent. It is not possible under the legislation. If we were to make such payments——

Chairman

Is it not even possible in hardship cases?

Mr. Ward

No, hardship does not come into it.

Chairman

Assistance from other Departments, such as medical cards and other essential items, are needed in order that people can continue. Such cases cause high levels of stress.

Mr. Ward

Absolutely. The Department of Social and Family Affairs deals with such supports, which include supplementary welfare allowances. We are bound by current legislation with regard to the payment of money from the social insurance fund under the statutory redundancy scheme.

Deputy Hogan

I ask Mr. Ward to ensure that, whatever agencies are involved, workers are dealt with sympathetically in terms of wages and entitlements pending the outcome of the case. If he has no other powers, he could at least liaise with other Departments to ensure supports are put in place.

Mr. Ward

I expect such contacts have already been made.

Ms Burns

Such contacts have already taken place. Representatives of the Department of Social and Family Affairs met the workers at the outset of this dispute.

Chairman

Did the 35 weeks commence when the problem arose? Did the clock start ticking on the day the hospital closed?

Mr. Ward

The clock starts ticking from the date on which the workers submit a claim to the Employment Appeals Tribunal. They join the queue, which happens to be 35 weeks long.

Chairman

Has that started?

Mr. Ward

I am not sure.

Ms Burns

We do not know whether the workers have taken action before the Employment Appeals Tribunal.

Deputy Hogan

We advise them to do so immediately.

Ms Burns

They were advised that if the employer failed to sign the forms, the option remained to go to the Employment Appeals Tribunal.

Deputy Hogan

Is there no power to force the employer to sign the forms?

Chairman

Has he, in the representatives' knowledge, refused to sign the forms?

Ms Burns

As I understand it, some forms were signed for incorrect amounts. The workers were unwilling and unable to take a much smaller sum of money than they are entitled to under statute.

Chairman

Yes.

Ms Burns

Many of the workers did not get their forms signed. Moreover, there was a problem with funding, with the employers stating from week to week that the money would be available and that arrangements would be put in place, but the money has not yet been paid.

Deputy Hogan

This shows a gap in the legislation which means that an employer can do as it likes and the workers have to wait.

Chairman

The issue must be addressed but it will unfortunately not help the people at Rahan. I thank Mr. Ward and Ms Burns for assisting the committee on behalf of Deputies Enright and Cowen who, along with myself, have an interest in the issue. The committee notes the representatives' contribution and will pass it on to relevant authorities.

Mr. Ward

We will bring this discussion to the attention of the Employment Appeals Tribunal.

Chairman

I again thank the representatives.The committee needs to produce an agreed statement to be released to the press, which might be read to members first.

The joint committee went into private session at 1.16 p.m. and resumed in public session at 1.17 p.m.

Chairman

The committee will issue a statement through the press officer when it is ready. The recommendation of the committee, which is unchanged, will also be issued to the Minister. Is that agreed? Agreed.

The joint committee adjourned at 1.20 p.m. sine die.