Joint Committee on Public Service Oversight and Petitions debate -
Thursday, 18 Jul 2013

Employment Appeals Tribunal: Public Petition No. P00027/12

Chairman

The committee is meeting to consider public petition No. P00027/12 from Mr. John O'Sullivan, concerning the Employment Appeals Tribunal process. The committee will deliberate on the general policy aspects of the process informed by the petitioner's experience rather than the specific details of Mr. O'Sullivan's individual case. The committee will take evidence from Mr. John O'Sullivan, the petitioner; Mr. John Douglas, Mandate general secretary; Ms Rhona Murphy, head of employment law services at IBEC; Mr. Loughlin Deegan, solicitor and senior adviser on rights and pensions, also from IBEC; Ms Esther Lynch, ICTU legal and legislative affairs officer; Mr. Vernon Hegarty, and Ms Deirdre Canty, SIPTU advocates; Mr. Niall McCutcheon, Assistant Secretary General, Department of Jobs, Enterprise and Innovation, who has responsibility for the Workplace Relations Bill; Ms Elaine Cassidy, principal officer with responsibility for the Companies Bill; Mr. Padraig Dooley, principal officer, National Employment Rights Authority; Ms Frances Gaynor, assistant principal officer, Employment Appeals Tribunal; Mr. Enda Murphy, assistant principal officer, workplace relations liaison unit; Ms Dearbhail Nic Giolla Mhicíl, Department of Social Protection, who will answer questions about the operation of the Social Insurance Fund.

I thank everyone for their attendance. I remind everyone, including those in the Visitors Gallery, to ensure all mobile telephones are switched off for the duration of the meeting as they interfere with the broadcasting equipment even when in silent mode.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give this committee. If a witness is directed by the committee to cease giving evidence in relation to a particular matter and the witness continues to so do, the witness is entitled thereafter only to a qualified privilege in respect of his or her evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and witnesses are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable.

I invite Mr. John O'Sullivan to make his opening statement to the committee.

Mr. John O'Sullivan

I thank the committee for giving me this opportunity to address it. I have been there, done that. I was so disappointed in the whole process that it took me four years to get a resolution. Some people say that I have been lucky it only took that long. I have seven headings in my submission. I am nervous because this is my first opportunity to address such a gathering.

My first point is about the length of time it takes for a hearing to be heard. It took 16 months to get to an appointment with the Employment Appeals Tribunal. As a result, I was under severe stress. It was nearly impossible to apply for a job or to get a job during that period because if I was asked at an interview to talk about my situation I would have to say I was waiting for a hearing with the Employment Appeals Tribunal. I know how people react when they hear this and that was the reaction I got. This created further stress. All efforts should be made to reduce the waiting time for a hearing.

My second point is about costs. The system says that it is an informal, efficient and inexpensive means of getting a resolution to one's situation. The people I had to fight against were in a position to employ HR people and big legal advisers. I felt that if I was to go into the ring with these people with my hands hanging I would not have a hope of making my case. The system says that every effort and assistance will be given by the Employment Appeals Tribunal people to assist a person but, unfortunately, it is very difficult for an ordinary layperson to understand legal jargon and rules and regulations. As a result, I had to employ legal people to defend me. The cost in my situation was just short of €2,000, which was just slightly less than half the award I received. So far as I am concerned, winners in particular are usually awarded costs in all court and tribunal cases. I think that reasonable costs should be allocated to the claimant in cases before the Employment Appeals Tribunal and in particular to the winner of the claim.

My next heading is costs to the State. If a person loses his or her job, their first action is to go the social welfare office. If one makes a claim while waiting for an appointment for an Employment Appeals Tribunal - which could be 12 months or 16 months - this will cost the State approximately €18,000 for a married man. In my view if the claimant wins the case the employer should be responsible for that loss to the State and it should be included in the award against the employer.

My next heading is the standard formula for awards. It appears there is no set standard formula for making an award as it is at the discretion of the panel to decide the amount of the award. I suggest that a standard set of calculations for awards should be implemented. For example, if a claimant is out of work for 12 months and his previous earnings were €650 per week, the calculation should be 48 weeks at €650, which is just short of €32,000. Less the social welfare payment of €18,000, the award would be €14,000 or €13,500 to the claimant, plus, at the discretion of the panel, a payment for stress, hardship or other expenses.

If a person is unfairly dismissed - as happened in my case - the employer should be held responsible for the payments the State was obliged to make in the interim. That is my opinion and I believe consideration should be given to it.

The next issue is power of enforcement. I have studied this matter and I am aware that when the award was made, the employer was given six weeks to appeal. When those six weeks had elapsed, we spent a further two trying to track him down. When we located him, he stated that he would be appealing the case. We were then obliged to return to the Department to discover if an appeal had been lodged. It emerged that one had not been lodged. When I eventually tracked down the employer again, he had closed up shop, started up business in a different shed and walked away from his responsibilities. The tribunal has no powers of enforcement and neither it nor anyone else is in a position to obtain payment from the employer in question. I am of the view that the legislation should make provision for some power of enforcement which will allow for people to be held responsible if awards are made against them and which will ensure that they will be obliged to pay up within a short period.

In order that problems such as that to which I refer might be overcome, I suggest that employers who wish to contest claims relating to unfair dismissal, redundancy or whatever should be obliged to lodge bonds. The use of bonds would mean that if an employer acts the cowboy and runs away, there will be something in place against which claims could be made. These bonds would not require the lodgement of thousands of euro, rather they would take the same form as bail or court bonds. Essentially, one or two people could guarantee that in the event of a claim being made against a particular employer the bond could be brought into force. Another option would be for companies to put in place insurance policies to protect themselves and employees against claims of this nature. It is possible for insurance companies to offer such policies in order that employees and the companies for which they work can be protected. Again, I believe some form of provision should be made in this regard.

The final matter to which I wish to refer is the appointment of liquidators. During the course of my pursuit of my claim, I discovered that when the company was liquidated the person appointed as liquidator possessed no qualifications or affiliations. That person was extremely difficult to contact but I eventually tracked him down by picketing his premises and making life awkward for him by making telephone calls to him and some of his associates. I obtained the information I required from the Office of Corporate Enforcement and discovered what was happening as a result. Ultimately, I obtained my reward through the insolvency fund. However, I felt that this was wrong because the director of the company involved was more or less going around and giving people the fingers. He walked away from his responsibilities and there was no one there to force him to face up to them. He continues to be a director of companies and to operate the same type of business in a different building. What he has basically done is to give the fingers to the Employment Appeals Tribunal. He went through the entire process and he messed me, my family and everyone else involved around. I spent four years trying to have my claim honoured.

In the end, I was not concerned with obtaining money but rather with getting justice. That is why I wanted to express my opinions to the committee. I have been there and done that and I hate to see what I endured happening to other people. I know that some individuals would not have perseverance and tenacity to track down and persecute someone such as the employer for whom I worked. Again, I felt it was wrong that the State was obliged to pay my claim from the insolvency fund, that the directors in question walked away scot free and continue to serve as the directors of big companies and that they have not been held responsible. If a situation such as mine arose in the future, these people would do the same thing again. For that reason, I am of the view that the Employment Appeals Tribunal should be given powers of enforcement.

Chairman

I thank Mr. O'Sullivan and call Mr. John Douglas, general secretary of Mandate and president of the ICTU.

Mr. John Douglas

I thank the committee for the opportunity to appear before it to outline our views on this very important issue. I compliment Mr. O'Sullivan on having the tenacity to continue his fight for justice in respect of his award. We have a number of members who were employed by Connolly Shoes in Dún Laoghaire, who had over 100 years' collective service between them and who have been on the streets since 2010 trying to obtain justice against all the odds. We will continue to pursue their case in the strongest possible manner.

As members are aware, Mandate is a union which organises workers in the retail and bar sectors. The type of problem under discussion is not unfamiliar to us, particularly in view of the myriad of small businesses and limited companies which operate in both sectors. Members will also be aware that the Unfair Dismissals Acts offer a system of redress for workers against unfair dismissal, that the Employment Appeals Tribunal - on finding a dismissal unfair - may award reinstatement, re-engagement and or compensation to the employee, group of employees or a combination of both. Hearings are quite formal, with all evidence taken under oath, and parties are permitted to cross-examine each other's witnesses. While the tribunal was originally set up as a quick and informal route for workers to process claims relating to alleged unfair dismissals, it is clear that in recent years it has become increasingly legal in nature, with parties - particularly employers - often represented by senior counsel and solicitors. This makes hearings of the tribunal altogether more daunting for workers, particularly those without union or legal representation. We understand that the relevant Minister is in the process of introducing measures to simplify the process and that these will lead to the Labour Court taking over the function of the tribunal. Nonetheless, serious concerns remain in respect of a number of matters covered by the legislation.

Mr. O'Sullivan referred to delays in the processing of claims. It is not unusual for workers to wait 12 months or more for their claims to be heard. This results in extended economic hardship on workers and their families, particularly at a time when the level of unemployment is high and when there is little alternative employment available. As Mr. O'Sullivan pointed out, these delays also impact on the employability of the claimants in that many employers will not hire a worker who has a claim in progress or in the system. We hold, therefore, that serious claims such as those relating to unfair dismissals must be heard within a reasonable period in order that claimants will not be penalised twice. The workers at Connolly Shoes to whom I refer were unfairly dismissed in March 2010. They received a favourable award against their employer in December 2011 and they have still not received one cent of this money. Over €100,000 is due to these four workers who, collectively, gave over 100 years' service to the same employer. They continue to chase said employer, who has established and closed myriad companies in the interim and changed the names and places of business of these on an almost monthly basis. He has done all of this in a effort to avoid his responsibilities. He is protected under the limited liability status relating to directors but our members have been forced onto the dole.

The enforeability of awards is a serious issue. On the making of an award by the tribunal, parties have six weeks to decide whether to appeal the decision to the Circuit Court. Should either party exercise their right of appeal, the matter will then be referred to the Circuit Court. Again, this will involve further delays and costs. In the case of Connolly Shoes, the matter was not appealed and we were obliged, on behalf of our members, to seek an enforcement order in the Circuit Court. If an employer refuses to pay or ignores an award of the tribunal, the claimant or claimants must go to the Circuit Court to seek such an order and bear the resultant costs that arise. The order is then given to the sheriff to enforce, either by securing the award or by ceasing goods to the value of the award. If an award is reinstatement, it is extremely difficult to cease goods to the value thereof. However, this is what the law dictates at present. The real problem arises in cases where the employer is a limited company, either in dormant status - that is, it is not filing returns to the Companies Registration Office - or has no assets. Named directors are protected by limited status and this allows them to place their assets beyond the reach of workers. This means that the rights of workers whose claims have been adjudicated upon by a tribunal of this State cannot be vindicated.

In such cases the sheriff acting on behalf of the worker will have nothing to cease and no recourse against the directors.

The case of Connolly Shoes in Dún Laoghaire is a typical example of such a case, where four workers with more than 100 years' service who were unfairly dismissed were awarded over €100,000 in compensation against their employer - MACOW Limited, which later changed to MACOW & Associates Limited, neither of which companies have any assets whatsoever, but the company still continues to file returns to the Companies Registration Office. The sheriff attended at the trading address of Connolly Shoes in Dún Laoghaire, only to be informed that MACOW Limited does not own the stock on the shelves nor the premises, which is held by a separate company.

The situation becomes even more stark in cases of dormant limited companies which are abandoned by their directors and it is not possible to enforce orders against them. In many cases these companies are struck off by the Companies Registration Office for failing to make returns. It is impossible to enforce an Employment Appeals Tribunal, EAT, award against a company that is struck off as it no longer legally exists. That means workers who have been adjudged as having their rights infringed by a tribunal of the State are tunnelled down a cul-de-sac with no prospect of achieving the redress awarded.

The final option left to such workers is to petition the High Court to have the said company wound up. Those costs, on top of the costs of the tribunal and the Circuit Court are in the vast majority of cases prohibitive, as by definition the workers are now unemployed and in many cases unemployable. In the unlikely event of the workers having the means to seek a High Court petition and eventually succeed in winding up the limited company, the awards of the original tribunal can be met by the insolvency fund. The time and the expense of this process are prohibitive in the vast majority of cases. Therefore, it would appear from the current enforcement regime that workers who have been either unfairly dismissed or had other labour rights abused have no recourse to enforcement. Delinquent employers who have infringed the most basic rights of a workers, namely, to earn a living, can hide behind the veil of limited company status. In the hierarchy of things, a director's rights to the protection of his or her personal assets are put ahead of the worker's rights against unfair and unjust treatment. The State has clearly taken the side of business over workers.

The situation is most serious and it has become a growing problem across the service sector with which we deal. Currently, a total of 2,521 companies are tagged for strike-off. Behind each of those tags lie thousands of workers who will not be able to process their rights and the awards that have been made by a State tribunal. The matter requires immediate attention.

Chairman

I now invite Ms Rhona Murphy and Mr. Loughlin Deegan to make their opening statement on behalf of IBEC.

Ms Rhona Murphy

We are grateful to be invited to make submissions to the committee this morning. We will confine the submission to the matters referred to in the invitation from the committee to IBEC. They do not relate to all of IBEC's concerns on the operation of the employment rights bodies. We are feeding into the Department of Jobs, Enterprise and Innovation separately on those matters.

We have been provided by the committee with a summary of the petitioner's complaints and suggestions on the EAT. Unfortunately, it appears that the petitioner is under several misapprehensions regarding the EAT and its operation. Several of his assertions furnished to us appear to be factually incorrect and several of his suggestions for change would lead to what we perceive as a significant injustice for employers who are already struggling in the current climate. We deal with the complaints in the sequence provided in the letter we received.

In response to assertion No. 1, that the cost of bringing a complaint to the tribunal has to be paid by the complainant, that is not correct. There is no cost to bringing a complaint to the tribunal. It is free. It is also free to bring a complaint to a rights commissioner, the Labour Relations Commission, the Labour Court and the Equality Tribunal. That causes a significant problem for employers and a large waste of money for the State because many employees take frivolous and vexatious claims against their employers and then do not bother to show up to the hearing. I do not refer to the case presented by Mr. O'Sullivan but it is our general experience. It happens hundreds of times each year, especially at the rights commissioner hearings, causing enormous waste of taxpayers' money.

The jurisdiction of the EAT in unfair dismissal cases is two years' worth of the claimant's salary. In most cases, that greatly exceeds €38,000, which is the jurisdiction of the High Court. If a person wants to bring proceedings in the High Court, they must pay a fee of €138. If they want to bring proceedings in the Circuit Court, they must pay stamp duty of €68. If they want to bring proceedings to the Small Claims Court, they must pay €25. In the latter court the cap on awards is in the region of €1,000.

IBEC has consistently submitted that it should cost the same, at a minimum, to bring a claim to the EAT that it costs to bring one to the Small Claims Court. We have made representations to that effect as part of the employment rights bodies' reform consultation process initiated by the Department of Jobs, Enterprise and Innovation. The introduction of this measure would raise a small amount of money for the State and would reduce the number of frivolous claims by people who have no intention of attending a hearing. Ireland is an outlier in this regard compared with other countries. In the UK there is a proposal to introduce staggering of fees to have a hearing before the employment tribunal. To have a claim heard before the tribunal will cost £1,200 and there will be an issuing fee of £400. The fee we propose is modest but it would go some way towards reducing what we have experienced as a number of frivolous and vexatious claims, which cause an inordinate amount of trouble for an employer who still has to prepare the case, bring witnesses out of the workplace and defend the proceedings.

Assertion No. 2 is that the employer is under no obligation to pay the award. That is not the case. An employer has a legal obligation to pay an award ordered by the EAT. That obligation can be enforced through the Circuit Court, which can require interest to be paid on the award. It is similar to any other legal rights that are exercised in the courts. That is the process that is universally applied. Only a tiny number of enforcement proceedings are brought each year, because the great majority of employers comply promptly with EAT awards. The kind of case which we heard about today is very much in the minority. It is relatively rare that employees are forced to proceed to enforcement proceedings or to recover from the insolvency fund.

Assertion No. 3 is that the claimant must then pursue the employer through the courts for payment. An award by the EAT is the equivalent of a debt which the employer owes to the claimant. The only appropriate way to pursue unpaid debts is through the courts. It is the same for a contract debt or any other kind of debt.

On assertion No. 4, the need for engagement of a legal team by the claimant, neither claimants nor employers need to engage legal teams in the EAT. From my experience of it I find that where a party appears unrepresented the tribunal makes every effort to facilitate him or her in the running of the case. The EAT was designed to be "lawyer free" but many claimants and employers choose to represent themselves in proceedings. The EAT is very supportive of unrepresented parties. The procedures of the EAT are flexible, and particular flexibility is shown to unrepresented parties. From our observations based on looking at the previous annual report of the Employment Appeals Tribunal it would appear to us that legal representation is used in approximately 50% of cases. The use of legal representation is approximately the same split between employers and employees, or at least the differentiation is negligible.

The EAT also facilitates representation of claimants by trade unions, and of employers by employer organisations such as IBEC. The quality of representation is excellent and such parties do not have to pay for such representation, as it is included as part of their membership subscription. Some parties choose to retain their own legal representation at the EAT. That is their absolute right, but if they want such representation, they have to pay for it themselves.

On assertion No. 5, that there is a lack of power on the part of the tribunal to enforce its judgments, as I mentioned previously, an award by the EAT is the equivalent of a debt which the employer owes to the claimant and the only way to recover that is through the courts. In terms of the suggestion that an employer should be required to lodge a bond as security, we would fear that would be a charter for employees to bankrupt employers by lodging unlimited numbers of spurious claims. It would penalise employers before any award had been made against them. It would be completely unjust and entirely unconstitutional. Such an approach would render their work almost impossible, in particular in the difficult trading circumstances in which most employers operate at the moment.

The procedure at the EAT, Employment Appeals Tribunal, is already weighted against employers. Unlike most civil proceedings where the burden is on the plaintiff to prove his or her case, the EAT operates under a statutory requirement that employers are considered guilty until proven innocent. This arises from section 6 of the Unfair Dismissals Act 1977, which requires employer to prove that they did not unfairly dismiss the claimant.

In any case, there is already legislation in place for some time in the form of the Protection of Employees (Employers’ Insolvency) Act 1984 which protects employees in the event of the insolvency of their employer. The legislation requires that a fund be retained which guarantees payments of outstanding claims of employees in the event of insolvency. The fund, referred to as the Social Insurance Fund, is financed by employers’ and employees’ PRSI. Employees are entitled to access the fund where there is a debt owed to them arising from one or more of a range of claims specified in the Acts, including those pursued under the Unfair Dismissals Act, the Redundancy Payments Act, the Employment Equality Act, the Payment of Wages Act, the National Minimum Wage Act, the Maternity Protection Act and the Parental Leave Act.

Based on the Dáil debates at the time of the passing of the Act, the definition of insolvency was deliberately broad so as to ensure no worker would be excluded from the protection of the legislation. IBEC respectfully submits the scheme underpinned by the employers insolvency legislation provides a reliable redress mechanism to employees who find that they are otherwise unable to recover the moneys owed by their employer.

We have no opinion on the appointment of liquidators and their qualifications.

Mr. Vernon Hegarty

The Irish Congress of Trade Unions, ICTU, thanks the Joint Committee on Public Service Oversight and Petitions for the opportunity to provide observations on the issue of costs associated with taking a case through the EAT.

There has been much discussion about the shortcomings of the tribunal. However, it is important to remember from where it came. It was set out to be a relatively informal and inexpensive way for employees to vindicate their employment rights in certain areas of employment law. With its transformation from the redundancy tribunal to the EAT, it has, as rightly described by the petitioner, become not all together a friendly place. As a trade union advocate I know many individual workers who are not members of a trade union being dissuaded from taking their cases to the EAT because the other side has access to better legal resources. This is very far from what the tribunal was intended to be at its inception. It was to allow ordinary working people access to a forum without the requirement of legal or, indeed, trade union representation. As an advocate with the Citizens Information Board, I have seen it turn into a forum with senior counsels and solicitors with stacks of files on the other side of the table. This might be addressed in the legislation.

The petitioner has raised his experience of appearing at a tribunal. There are no costs to workers in accessing the EAT. Representation costs for trade union members have been paid for through their trade union subscriptions. The Minister has suggested the possibility of costs attaching to complaints or where referrals or applications are being made to the tribunal into the future, along with the possibility that provision for cost may be included in the workplace reform Bill. SIPTU, along with other trade union colleagues, is opposed to the introduction of such costs. We consider such a move anti-worker as it would have the effect of placing unnecessary hardship on workers and act as a deterrent in the vindication of employment rights. Such a move has been mooted in the UK with fees ranging from £250 to £950 for unfair dismissal cases and £350 for unpaid wages cases. These are retrograde steps and inconsistent with the tribunal’s purpose.

The cost of enforcing a decision or determination handed down in favour of a worker by the EAT is also met by his or her trade union. In this regard, the Minister’s proposal that enforcement may be possible through the District Court, as opposed to the Circuit Court, is a welcome move in bringing enforcement costs down. Any measure the Minister introduces to bring costs down brings us closer to the original purpose of the EAT, namely easy access to the vindication of employment rights. We would like to see the Labour Court playing a role in this in an effort to drive costs down further.

The retrieval of debts owed and the enforcement of determinations in decisions by third parties against employers who are technically but not legally insolvent remains an issue of grave concern to our members. Ever since the introduction of the Protection of Employees (Employers' Insolvency) Act 1984, there is a gap in this regard.

In the normal course of events, in order to enforce against any employer who has not paid our member such debt or third party award, we undertake a CRO search to determine that it is the correct legal entity against which we are enforcing, as is required by law. As a result, we determine not only the correct legal entity but the solvency or otherwise of the company, its annual returns and trading status, as well as that of any associated companies. This is vital to establish in bringing any such case. Where there is little or no difficulty with the company's solvency, we are in general successful in enforcing against the company. My colleague, Ms Deirdre Canty and I and others serve in the membership information support centre in SIPTU which deals with individual cases like this all the time. Establishing the status of that employer is vital because it can have implications for the prosecution of their case and, more importantly, in realising any award that is made by whatever forum we have been to.

Should we discover that a company has ceased trading and in effect walked away from its outstanding debts to employees, there is no solution available to the workers. Those may be debts that have accrued in terms of back wages or holiday entitlements. All those matters are covered under the 1984 Act, as amended. I beg to differ from the submission made by IBEC. The 1984 Act, as amended, establishes very narrow criteria against which insolvency can be established for the purposes of accessing the insolvency fund to make good on those debts. It is a very narrow piece of legislation in that respect. While the company will technically be insolvent, workers who have paid their social insurance contributions towards the State insolvency fund are not entitled to claim from this fund as the definition of insolvency under the Act, while being capable of, does not cover them for this situation.

That is a gap in the law that has never been closed. It has been observed to have been a problem for many years. I recall dealing with a specific company in Donegal in the 1990s on a voluntary basis as the employees were not trade union members. They came into difficulty. The company was in the Ballymoon industrial estate in Kilcar in south-west Donegal. It was a Swedish-owned company that had been grant aided by Údarás na Gaeltachta. These employees had been left at arm's length in the operation and there was a distanced management. Employees continued to work without getting paid for a protracted period. They had been used to periods like this where they might have worked for two or three weeks and some absentee manager would come by and pay them their back wages that had accrued. There came a point where no manager ever came back either to collect product or to do anything else and no wages were paid. Due to the fact that the Irish-registered aspect or associate company of the Swedish parent had not been rendered insolvent under the descriptions in the definitions of the 1984 Act, those individuals had no access to recovery of that debt of lost wages, accrued holiday entitlement or anything else. They tried to continue the business in the good faith that it would continue and were just abandoned. The Protection of Employees (Employers' Insolvency) Act 1984 had no application because the parent company in Sweden was not insolvent in line with its legislation so there was no place to go. This has been happening for decades, has never been addressed and is a great disservice to those individuals who find themselves in that situation because they are simply abandoned. I can understand the type of situation described by our colleague in Mandate based on his experience where the individual might then set up an alternative business in the same town.

Deputy Richard Boyd Barrett

In the same building.

Mr. Vernon Hegarty

It flies in the face of those with outstanding debts that cannot be accessed and who have no recourse in law to recover those debts. That is particularly aggravating and degrading to the employees involved.

Understandably, this comes as a great surprise to workers affected. The cost of pursuing a company which effectively only exists on paper is prohibitive when balanced against the award they will have received from a third party in respect of unpaid wages - minimum notice, unfair dismissal claims, etc., as outlined. Many members will also be aggrieved that their employer can start up another company somewhere else, very close by or even in the same building, as has been pointed out. This contrasts sharply with the situation for redundancy payments as well as for insolvency situations provided for in the Act. On receiving a payment from the State in these situations, the State stands in the shoes of the worker and can pursue the company for moneys owed. The Protection of Employees (Employers' Insolvency) Act 1984 and the European directive to which the Act give effect both envisage insolvency situations other than those currently provided for under the Act, that is, liquidation, receivership or the death of the employer. As the Act also provides for the pursuance of employers and companies by the State in an insolvency situation, there does not appear to be an insurmountable barrier in dealing with a company that is insolvent in these situations thereby protecting workers against such behaviour by employers and placing the debt back on the employer where it should properly reside. We submit that this is the just amendment that needs to be made. It has been suggested prior to this by ICTU that section 4(2) of the Act empowers the Minister to make just such an amendment by regulation. That would be the swiftest means by which these workers who have remained without these protections many years could be helped. If members have any further questions, I would happy to take them.

Chairman

I now invite Mr. Niall McCutcheon, assistant secretary, to make his opening statement on behalf of the Department of Jobs, Enterprise and Innovation.

Mr. Niall McCutcheon

I thank the committee for the invitation to attend this meeting to address the issues raised in Mr. O'Sullivan's petition and for the opportunity to provide an update in respect of the ongoing reform programme currently being undertaken by the Minister for Jobs, Enterprise and Innovation to reform the State's existing employment rights and industrial relations structures, to which reference has already been made.

The Department has already forwarded a submission to the committee prior to this meeting which addresses the specific issues raised by the petitioner and provides an update in respect of the workplace relations reform programme. In the circumstances, I do not propose to address the issues in such great detail in my opening statement. However, both I and the other members of the Department's delegation would be happy to address any questions or issues which the committee may wish to raise in respect of the matter. I will deal with the broader issues raised in this petition which relate to the delays and costs of bringing a complaint before the EAT, the need to employ a legal team, the difficulty of enforcing an award of the tribunal and the qualifications of liquidators.

I will firstly provide an update in respect of the ongoing reform of the State's existing employment rights and industrial relations structures and will then briefly address the specific issues raised in the petition. It is essential that we have efficient and effective mechanisms to develop harmonious and productive workplaces and to assist employers and employees to avoid and resolve disputes. It is clear that the system which has evolved over the past number of decades did not achieve this. The system was frustrating for employers, employees and professionals representing them. Notwithstanding the efforts of the EAT and others to reduce backlogs, the Minister believes the delays that users of the service are experiencing are unacceptable.

It is for these reasons that the Minister is undertaking a root-and-branch reform of all five workplace relations bodies. The reform programme that has commenced aims to deliver a world-class workplace relations structure. The Minister proposes to establish a two-tier workplace relations structure which means that upon establishment of the new structures, two statutorily independent bodies will replace the current five. We will have a new single body of first instance to be called the workplace relations commission, WRC, and a separate appeals body, which will effectively be an expanded Labour Court. All complaints will be dealt with by a single body of first instance where the aim will be to have a hearing within three months from the time the case is lodged.

The activities of the Labour Relations Commission, the National Employment Rights Authority, the Equality Tribunal and the first instance functions of the Employment Appeals Tribunal, EAT, and the Labour Court will be merged into the new Workplace Relations Commission, WRC. The appellate functions of the EAT will be incorporated into an expanded Labour Court.

The Minister has already undertaken two public consultation processes and, as the committee will be aware, in July 2012 he submitted the policy document, Legislating for a World-Class Workplace Relations Service, to the Oireachtas Committee on Jobs, Enterprise and Innovation. This document sets out in detailed narrative format the core principles that will be incorporated into the proposed new structures and processes. The Minister had a positive and very useful engagement with the committee on the proposals, which incorporate many of the positive suggestions and contributions made as part of the consultations.

The purpose of the reform programme is to provide a more efficient and effective system of resolving employment disputes. Substantial progress has already been made in this regard. Since the Minister announced his reform proposals we have undertaken two public consultation processes, published two policy documents, created a new website; introduced a single complaint form and single contact portal, and commenced delivery of an early resolution service.

A significant amount of work has also been completed on the legislative programme required to deliver the reform. The general scheme of Bill has been approved by Government for priority drafting and it was included on the "A" list for the Government's summer legislative programme 2013. Drafting of the Bill has commenced and the Minister is committed to the enactment of the legislation at an early stage with a view to having the proposed new structures in place from 2014. The Minister intends to progress the reform programme to the next stage with the same determination that has delivered results to date and he intends to continue to progress the reform and bring about further enhancements for users of the services on an administrative basis in the coming months before the enactment of the legislation.

I will briefly address the issues raised in Mr. O'Sullivan's petition which relate to the delays and costs of bringing a complaint before the EAT, the need to employ a legal team, the difficulty of enforcing an award of the tribunal and the qualifications of liquidators. The EAT was originally designed as a relatively inexpensive and informal forum for dealing with employee-employer complaints. No fees are charged to any of the parties. Legal representation is not a requirement of the EAT and efforts are made to ensure that the level of informality is such that representation is not necessary. Members of the EAT will in practice give any assistance they can to parties appearing before them who are not legally represented.

Some parties engage legal representation and despite the efforts of the members to compensate for this, it is acknowledged that there may be a perception that it may be an advantage to be legally represented and a disadvantage not to be legally represented. This is one of the reasons why the Minister proposes, in the reformed structure, to provide for a single adjudicator to hold hearings in private, similar to the Equality Tribunal and Rights Commissioner Service rather than the EAT model of a three-person tribunal held in public. It is the Minister's aim that parties, while retaining the right to be legally represented, will have the confidence to represent themselves should they so wish.

The idea of introducing fees and a bond has been raised in the petition. Having considered various suggestions on charging fees or putting in place bonds, the Minister does not propose, with one exception, to introduce fees or bonds. It is the Minister's view that a bond as proposed, binding only one side, the employer, at the initial stage of a case would have the appearance of prejudicing the view of the neutrality and parity of esteem that the opposing sides would expect from the members in carrying out their duties. The exception the Minister proposes is to charge a fee where a party appealing a decision of a WRC adjudicator failed to attend or be represented at the initial WRC adjudication hearing. This can be refunded if the person can demonstrate to the Labour Court a valid reason for not attending. This is based on experience where complaints are taken at a preliminary stage, are not contested, an award is made in favour of the complainant and at that stage the respondent lodges an appeal to the Labour Court. The aim is to ensure the process is cleared, as far as possible, at the lowest tier.

On waiting times, the EAT, like other tribunals, has seen a significant increase in its case load in recent years, as it is one of the front-line services directly impacted upon by the economic downturn. The largest increase in claims has been in redundancy appeals but other types of claims have also increased. Regrettably, this has increased the time it takes for a claimant to have his or her case heard. All appeals are listed for hearing in accordance with their date of lodgment with the tribunal. The tribunal has been active in ensuring the resources allocated to it are used in an efficient manner and there is an ongoing review of how this is best done. For example, divisions of the tribunal are sitting longer, hearing more cases per hearing and seeking to manage the case load to maximise efficiency. This is reflected directly in the increase in the number of cases finalised by the tribunal over the last three years.

The tribunal is actively working to meet this challenge, notwithstanding the high level of claims in recent years and the administrative resources available. However, as I have already stated, these waiting times are not acceptable and the Minister proposes that the WRC will put in place a target period of three months from the time a complaint is lodged until a hearing date in the new system.

On the enforcement or payment of awards made by the EAT, the tribunal has no role in the enforcement of its own awards. Such awards may eventually fall to the civil courts for enforcement and in certain circumstances this process may be carried out on behalf of the Minister by the National Employment Rights Authority, NERA. It is accepted that individuals who have had awards made in their favour by employment rights bodies, including the EAT, can experience difficulties in enforcing those awards where employers fail or refuse to pay such awards. The Minister believes that any system of employment rights adjudication which is not backed up by an efficient and effective enforcement regime for successful complainants lacks credibility. If employees who have been denied their statutory entitlements, and their representatives, are to have faith in the proposed new system, an effective, inexpensive and easily-navigated process must be put in place.

For this reason, the Minister is proposing, subject to advice from the Attorney General, to make provision in the workplace relations Bill for a new mechanism for enforcing awards of the WRC adjudicators and Labour Court determinations. These measures will provide for more proportionate, efficient and effective enforcement of employment law. If the decision of a WRC adjudication officer at first instance, or a determination of the Labour Court on appeal, remains unimplemented, the complainant may apply, in the former case to the WRC or, in the latter case, to the Labour Court, for a binding and enforceable determination order directing the respondent to comply within a specified period. A determination order made by the WRC or Labour Court may be enforced by civil proceedings or criminal prosecution, or both.

Civil enforcement proceedings may be brought in the District Court by the employee concerned, his or her trade union or the director of the WRC. They may apply to the District Court for an order directing the non-compliant employer to comply with the determination order. If the applicant is granted the order sought by the District Court but the employer concerned continues to fail to comply, it will be open to the applicant - the employee or the director - to apply for an order of attachment and committal of the employer, plus an order for costs. Criminal prosecutions may be brought by the director of the WRC in the District Court. A successful conviction should carry an appropriate maximum fine and-or period of imprisonment. In addition to securing the criminal prosecution, where an amount of money is owed by the non-compliant employer, the director will have the power to seek a compensation order in respect of the moneys due. Finally, the legislation will make it mandatory, other than in specific exceptional circumstances, for the District Court to award the director’s costs in bringing the prosecution. The Minister is hopeful that the measures he proposes to introduce will provide successful complainants with an accessible and inexpensive means whereby recalcitrant respondents can be compelled to honour the award of the WRC adjudication service or of the Labour Court.

The petitioner has queried whether persons holding themselves out to be liquidators in Ireland are required to hold a particular qualification. While there are certain disqualification provisions in the existing Companies Acts that apply to persons seeking to be appointed as liquidators, there are no requirements to hold particular professional qualifications or to have previous experience in this field to be appointed. This unsatisfactory situation will be remedied in the Companies Bill 2012. The Bill introduces a new qualification regime for liquidators.

Its introduction is pursuant to the recommendations of the Company Law Review Group, CLRG, in this context, which noted that the intention of this proposed regime was to ensure that, to qualify to act as a liquidator, a person must be appropriately knowledgeable, experienced and generally fit and proper.

The qualification regime envisages five main categories of persons who will be qualified to act as liquidators. Such a person may be described briefly as a practising member of a prescribed accountancy body; a solicitor holding a practising certificate; a member of a professional body recognised by the Irish Auditing and Accounting Supervisory Authority, IAASA; a person entitled to act as liquidator in another European state; and a person who makes a successful application to the IAASA within two years of the Bill's commencement. In order to qualify under the final category, the person must demonstrate adequate relevant experience of the winding up of companies, previous employment in relevant work or previous practice in another European state as a liquidator, and be a person who, in the opinion of IAASA after consultation with the Director of the Office of Corporate Enforcement, is fit and proper to act as a liquidator. When these provisions in the Bill become law, a person who acts as a liquidator without being qualified as I have outlined will be guilty of a criminal offence. The Bill also requires liquidators to hold appropriate professional indemnity cover, in such terms as prescribed, before they can act as liquidators.

The Companies Bill 2012 passed Second Stage in the Dáil on 25 April 2013 and is due to proceed to Committee Stage in autumn of this year.

I thank the committee for allowing me the opportunity to make this presentation, which I hope has been of assistance. The other members of the Department's delegation and I will be happy to answer whatever questions that members have on these matters.

Chairman

I thank the witnesses for their contributions. I will open the meeting up to questions from members.

Senator Susan O'Keeffe

I apologise, but there is a vote in the Seanad.

Chairman

Senators will need to leave now. There will probably be a vote in the Dáil as well. I propose that we suspend for 15 minutes, although it may need to be 20 minutes. I apologise to the witnesses in advance. Is that agreed? Agreed.

Sitting suspended at 11.25 a.m. and resumed at 12.07 p.m.

Acting Chairman (Deputy Michelle Mulherin)

We now resume in public session.

Deputy Richard Boyd Barrett

I apologise in advance because I may have to leave immediately after this to attend a debate on the situation in Syria. I thank everybody for their contributions and submissions to this discussion, particularly John O’Sullivan. When his petition came before us it rang bells for many of us because we had seen similar situations occurring elsewhere. As John Douglas has said, it rang bells for me in respect of the situation in Connolly Shoes in Dún Laoghaire where, like Mr. O’Sullivan, people have been fighting this unacceptable situation in which employers seem to be able, with a large degree of impunity, to ignore the decisions made by the Employment Appeals Tribunal at the expense of workers. Something has to be done about this.

The big question for me is what precisely can we do and I would like the people who have made proposals to flesh out their suggestions. On the issue of the bond that Mr. O'Sullivan has proposed, how does he respond to the suggestion that this could become an unfair burden on employers as it creates a presumption of guilt on their part, or an unfair burden, because that is what IBEC seems to be saying? I would like to hear IBEC respond to this point because I do not believe that there are huge numbers of vexatious complaints. I do not think that people take complaints willy-nilly, for no reason at all. Mr. O'Sullivan might give us some evidence to back that up.

I ask Mr. Hegarty to give the committee some supporting evidence. I would like to hear the opinions of the trade unions on Mr. O'Sullivan's proposal about the bond or the insurance scheme as against what I think Mr. Hegarty seems to be suggesting that amendments should be made to the Companies Bill.

Mr. Vernon Hegarty

No. The Protection of Employees (Employers Insolvency) Act, deals with those specific situations where individual workers - or groups of workers sometimes - fall without the narrow restrictive definitions of what constitutes an insolvency for the purposes of the application of that Act. There are so many people outside of that. There was a specific recommendation that had to do with amending and affording those people to come within the ambit of the Act. The Deputy's question is how does one address access. SIPTU and the Irish Congress of Trade Unions have proposed that anything in the reformed Bill that adds costs associated to access - whether it be an enforcement or in prosecuting those cases through the various fora - is contrary to the entire premise under which these fora were set up. As Mr. O'Sullivan rightly pointed out, these are to do with accessibility and its association with costs. We raise costs at our peril. We differ from IBEC in that regard and, indeed, with respect, from Mr. O'Sullivan. We argue against any associated costs because they are a dissuasion from accessibility. The move to hearing at a District Court level has been mooted and is progressive. The costs associated with attendance at the District Court are less than a hearing at the Circuit Court. Referring those enforcement procedures to the Labour Court would be a step better again in achieving the most complete accessibility and that is what we have proposed.

Deputy Richard Boyd Barrett

I am interested to hear Mr. O'Sullivan's views on that point.

Acting Chairman (Deputy Michelle Mulherin)

I propose to take a few questions together before the responses. I suggest Deputy Boyd Barrett puts all his questions now. Rather than having a conversation we will take all the questions together followed by the responses.

Deputy Richard Boyd Barrett

That is different procedure from the way I work in other committees but I will abide by the Chair.

The response given by Mr. Hegarty does not deal with another point raised by Mr. O'Sullivan. Connolly Shoes workers have also raised the point with me. We change the legislation dealing with the insolvency fund so that means - if I understand Mr. Hegarty correctly - that workers can at least get compensation quickly and it stops that blockage. However, what about the employers who are getting away with murder? Should there not be a way to chase them up? We need to address that point also because it really grates with people. It is not just a question of money, as Mr. O'Sullivan has said. I know John Mulpetre from Connolly Shoes would make the same point that it is also about justice and the injustice of the public having to pick up the tab for an employer who just ignores the rules, plays fast and loose with the rules and shows complete contempt for the processes. We need to look at how to address that and how to deal with companies or directors hiding behind limited liability and using shelf companies. It is an absolute scandal. What changes are needed in company law in order to address this situation? If I remember correctly, the situation is similar to the Vita Cortex case with that boss hiding behind different corporate identities in order to evade his responsibilities.

I have a question for the representative from the Department of Jobs, Enterprise and Innovation. Have we a slight reason to be concerned that the Department's reforms are just more cuts dressed up as reforms? That might be my suspicious mind. It is proposed to merge various bodies. Like most people I am in favour of streamlining the process. However, the proposal is that the waiting time will be three months as against the current 12 months and a move from three-person public hearings to one-person, one-to-one, private hearings. It is proposed that this will be more efficient and a better system and that it will deal with a lot of these problems. However, I am not quite sure how it could be. Will it mean fewer resources will be allocated? How can we be sure the targets will be achieved? What is the reason for believing the one-to-one hearing is preferable? I would like to hear more details about the proposals.

How does the Minister's Department propose to deal with companies hiding behind limited liability and shelf companies? This cannot continue. It is utterly unacceptable and it is happening all over the country. In the current climate it will continue and something has to be done about it.

Senator David Cullinane

I commend Mr. John O'Sullivan for lodging the petition which means the committee can have a discussion on all of the issues. I do not have a difficulty with a streamlining of the employment rights bodies and making them more effective for the employee and for the employer. The new single body of first instance and the new appeals body can work well if properly structured.

When will that Bill be before the Houses of the Oireachtas? Workers and employers need to have certainty.

I wish to make some observations and to ask questions arising from Mr. O'Sullivan's contribution and those of the witnesses. The first three questions relate to penalties for employers who breach employment law sanctions currently in place or perhaps sanctions which are not in place, and the enforcement of awards. Mr. Niall McCutcheon painted a picture of a service which is very easy to work with and is very worker-friendly. That is not everyone's experience. For example, it is not a level playing field for a young worker or any worker in a vulnerable position who takes a court case and is up against an employer's legal team.

I can give a personal example. When I was 20 years of age I took a case to one of the employment rights bodies. I won my case and an award was made. I had to go to the Circuit Court twice to have the award enforced. I never received one single penny, despite the fact that the sheriff served notice on the employer. I was not a member of a trade union at the time, which was my mistake. I was a victim of that system and nothing much has changed in the past 20 years for the many people who find themselves in a similar situation. I found it difficult to listen to the contribution from IBEC which referred to frivolous claims by workers. Perhaps the representatives can give the committee a definition of what is a frivolous claim.

On the question of costs, there may not be a cost involved in taking a case to an employment body as such, but there is a cost involved in terms of time off work. Even if the claimant is represented by a trade union this is at a cost to the trade union which is passed on to the members through their subscriptions. People who are not members of trade unions will feel the need to have legal representation. These are the associated costs. I hope the new regime will correct some of those points. The sanctions are certainly not strong enough for some employers who blatantly disregard employment rights law.

On many occasions, unscrupulous employers simply do not pay their workers overtime, holiday pay, redundancy entitlements or whatever. They do so in the full knowledge that the worst that can happen to them is that they will be brought before an employment rights body and asked to pay. That is not good enough. The sanctions are just not adequate and they do not encourage employers to do the right thing. I hope this matter will be contemplated by the review that is taking place. My experience in this regard is that the sanctions are not strong enough. The enforcement measures certainly are not strong enough because in many instances awards have been made but these were not binding and were never enforced.

I brought forward a Private Members' Bill on informal insolvency. The legislation in question was very straightforward in nature and would have allowed - in circumstances where a company is, to all intents and purposes, insolvent but where a liquidator has not been appointed - employees to access the insolvency fund. At present, employees can take cases under the provisions of the Organisation of Working Time Act, they can be given awards and they know exactly that to which they are entitled. However, they cannot apply for moneys under the insolvency fund and, as such, they find themselves in a legal limbo. That is grossly unfair. There is an opportunity, whether by means of the budget, the companies legislation or the proposed workplace relations Bill, to resolve this anomaly. It simply cannot be allowed to be left unresolved. If we do not use the budget or the legislation to which I refer in order to deal with this matter, it will be a major mistake on our part.

Ms Rhona Murphy

I will address the point relating to frivolous and vexatious claims, which has been raised on a number of occasions. This is an acknowledged problem and it is referenced in pretty much all employment legislation dating back to the Unfair Dismissals Act 1977. More recently, the Department of Jobs, Enterprise and Innovation referred to it in its Blueprint to Deliver A World-Class Workplace Relations Service. In this document, the Department acknowledges that there are cases which are brought where, for whatever reason, the claimant chooses not to show up and prosecute the claim. The employer is generally not on notice of this and shows up ready to defend the claim with witnesses in tow and he or she may also have retained legal representation at some expense. In most cases there is no redress for them. There are also instances where proceedings are brought and where the claimant shows up but where the actual claim is frivolous and vexatious. I refer, for example, to a claim for a written statement of terms and conditions of employment where such a statement has already been provided. Anecdotally, I can inform the committee that I have had that experience on a number of occasions. That to which I refer does happen. However, I would not state that it happens in the majority of cases but it does happen in a significant minority of them. It happens often enough that it causes a problem for employers and needs to be addressed. The point we made in our submission is that if employers are going to be forced to pay bonds prior to going before the EAT or some other forum, this could potentially lock them into an unenviable and invidious financial situation in respect of claims which ultimately will not even proceed.

Mr. John Douglas

On vexatious cases, it has been my experience that the vast majority of no-shows are on the employers side. Any workers who have ever attended the Employment Appeals Tribunal will be aware that it is a very daunting experience. People do not submit claims lightly. Rather they do so out of pure desperation in order to try to vindicate their rights, which have been abused. There are huge human and social costs for people who lose their jobs as a result of unfair dismissal. In the context of cases brought before the Employment Appeals Tribunal under the Unfair Dismissals Acts, there are very few no-shows from the point of view of employees and, for all sorts of reasons, quite a number on the employers side.

Deputy Boyd Barrett referred to the moral hazard of opening the gates to the insolvency fund. There may very well be a moral hazard in that regard in that bad behaviour on the part of bad employers would be rewarded. Ultimately, however, both employers and employees contribute to the fund. If an employer or an employee fails to appeal an award within six weeks - or whatever period is specified - and if the employer fails to honour the award, we are of the view that the employee should not be disadvantaged or penalised any further and that he or she should have direct access to the social fund. The State should prosecute employers who fail to honour awards. Limited companies give rise to particular problems. I refer not only to companies which are dormant and still on the books but also to those which are not dormant but which just refuse to pay. The State should seek attachment orders in respect of these companies or perhaps it should even consider lifting the veil of limited liability away from their directors and making them personally liable for the payment of awards. The latter might force directors to wind up their affairs in an orderly way. In the case of companies which are insolvent, a carrot-and-stick approach must be used to encourage directors to wind them up in this way.

The books kept by the Companies Registration Office are littered with companies that are dormant. When these companies do not make returns, they are eventually struck off. Essentially, this involves directors failing to wind up their business affairs in an orderly fashion and it can cause ongoing problems for employees in the context of vindicating their rights and obtaining awards. I suggest that when the six-week appeal period has ended and an appeal has not been lodged by an employer and in the event of the employer or the limited company involved not paying the award which has been adjudicated on by the tribunal, the worker should have access to the insolvency fund. The State should then step in on behalf of the worker and the taxpayer and pursue the directors personally in respect of the matter. Such directors should have the veil of limited liability lifted away from them. In such circumstances, directors would think twice about not paying awards or not winding up their business affairs - in the context of liquidations or receiverships - in an orderly manner. I am of the view that what I have outlined would lead to a big improvement.

Ms Esther Lynch

In the context of the points raised by Deputy Boyd Barrett, I am of the view that there is not one single solution. This is because the problem has different characteristics at different stages when an employee takes his or her complaint forward. The petitioner is absolutely correct: there are 101 ways in which an employer can frustrate an employee in the context of his or her seeking justice. In particular, an employer can make navigating the process such a stressful, expensive and difficult experience that the person involved will give up. Even worse, the experience of such an individual can act as a warning to all other employees of what they will be obliged to face should they come forward to vindicate their employment rights.

In the context of the expense involved, if a person is not a member of a trade union then he or she will be obliged to retain a legal representative. The petitioner is again correct in this regard. An ordinary person facing questions from a senior counsel sometimes 18 months to two years after the event can quite easily be tripped up and can lose his or her case on a technicality. Provision must be made in order that people who are not represented by trade unions can obtain justice. Where we differ from the petitioner is that the solution is not to offer costs against the losing party. If the petitioner had lost his case, he would have been obliged to pay not only €2,000 to his solicitor but also all of the costs incurred by the employer. Imagine the chilling effect this could have on people, particularly if their dispute relates to one day's non-payment of force majeure leave. While we would differ in terms of the solution, I am of the view that the petitioner is absolutely right in that the worst that will happen to an employer is that he, she or it will be obliged to do what should have been done in the first instance. He was also right to state that compensation should be paid to the person taking the case in respect of the amount of stress he or she endured in pursing the matter. The latter should be capable of being taken into account.

The petitioner's idea with regard to a bond is a good one. This goes to the second part of the problem, namely, the ease-of-doing-business regime which obtains in Ireland. There are many benefits to this because it makes it really easy to establish companies. However, the drawback is that it makes it very easy to establish companies. Under the regime to which I refer, I could own a small shop on a street in some small town but I might be operating four different companies out of the premises. These would be completely invisible to the naked eye. A worker might be of the view that the person for whom he or she is working is his or her employer but this would not actually be the case because that individual is operating four separate companies.

There are already bond regimes in place, for example, for holiday firms. If one is bringing people away on holiday one must have a bond should one not be able to bring them home. Similarly, if one is a company employing people, one is holding onto a month's unpaid wages, so that surely a bond similar to that type is not unreasonable if the company has no assets. If a firm chooses not to have any assets to substantiate its liabilities against its employees I suggest it is not a ridiculous idea that a bond would be in place similar to the system that exists for holiday companies where people are at risk of having to fund themselves to return home. A month’s unpaid wages could result in someone losing his or her home. There is a lot in the petitioner’s suggestion to look at in terms of the bond.

I will not say much about insolvency because my two colleagues have covered it very well, only to say that the committee could make a suggestion to the Minister for Social Protection to introduce the changes in budget 2014. She can already do it by means of changing the rules governing access to the fund. Not allowing access to the fund is contrary to our responsibilities under the relevant EU directive. I have provided a written note on the matter.

I agree with the petitioner that it is not a fair system that allows an employer to undertake all of this in order to cause frustration over a long period when the only thing they have to do is what they should have done two years previously.

Mr. John O'Sullivan

I thank everyone for their kind comments about the petition. I submitted the petition and got involved in the Employment Appeals Tribunal due to frustration. I went into the process with the belief that it was an informal, efficient and inexpensive means of finding a solution to my problem and I ended up with four years of total frustration, not on my behalf but on behalf of the employer. I felt that there were many deficiencies in the system and so many doors closed against my getting justice at the end of the day. The person who was responsible walked away and gave me, the Employment Appeals Tribunal and the country, the fingers. The person more or less said that having brought me through the process they were walking away and having a bloody good laugh at me. That was my reason for making the petition, to try to highlight some of the inefficiencies and inadequacies in the system.

Our friend from IBEC said an award could be made of two years’ salary. The wording is that one “may be” awarded. I have rarely seen a case of such an award. The other issue is the time delay involved. Going through the process has put enormous stress on my life and that of my family. Only for my own ability and determination I would never have got a resolution. At the end of the day the Department co-operated with me to find a solution but it was mainly due to the frustration caused by the system and my own ability and belief that I could get a resolution. I said earlier that it was not about money, it was about justice. I do not want to see other people going through the same process without having a door open for them. The system is not in place for them to get a resolution in a quick and efficient way.

It was said that I could have gone through the courts. I did go through the courts but the person involved had moved from one door to another and when the sheriff arrived at his door he was told the man did not live there anymore, that he was no longer involved and he could not be touched. That resulted in more frustration. I had gone through the legal system. I could have gone further but did not due to the stress involved and the cost, which is not within the ability of the ordinary person to pay. The person who has lost a job having been employed for 20 years or 30 years who is fighting such a battle does not have either the finance or, with respect, the intelligence, to pursue the issue. For that reason I made this representation in the hope that there could be changes in the law so that the onus would be put back on the person who is responsible at the end of the day - let it be the claimant or the employer. In most cases if an employee is going to fight a case then he or she believes in all honesty that he or she is right. There has been an insinuation that people do not turn up for cases but if they have genuine cases and believe they will get a quick and efficient response they will go through the process. However, I hope they will not have to go through what I experienced, namely, four years, to get a solution and at the end of the day the person responsible took no responsibility and was not punished in any way and it ended up that the Government had to pay me my insolvency.

Chairman

I thank Mr. O'Sullivan. The Department wishes to respond. Before that I wish to advise that there will be another vote in approximately 20 minutes. We will try to get through matters as efficiently as we can but I suspect we might have to adjourn again. This time it will be for ten minutes to allow for a vote if that arises.

Mr. John O'Sullivan

I wish to make one comment about bonds.

Chairman

Yes.

Mr. John O'Sullivan

I suggest that it does not need to involve a physical lump sum being put on the counter. It could amount to two signatures by responsible people that they will honour the debt of the Employment Appeals Tribunal. That is all I want. Let it be an insurance policy or similar to a travel insurance bond but it would be something that could be produced to the Employment Appeals Tribunal so that in the event of a finding that it would be honoured. That is my suggestion.

Deputy Peter Mathews

A valuable and operable guarantee.

Mr. John O'Sullivan

Basically, that is all I am looking for, so that I or another person does not have to spend two years chasing a liquidator, fly-away director or other person and that the commitment would be honoured.

Mr. Niall McCutcheon

I will ask my colleagues to answer the specific questions on company law and enforcement. Deputy Boyd Barrett questioned me on the reason for the exercise and whether it was an exercise in cuts in disguise. The initiative came very much from those who are involved in dealing with employment rights claims. Five organisations have overlapping and sometimes completely separate objectives and operations. Even experienced legal practitioners found the system difficult to comprehend. Claims were often referred to the wrong forum or under the wrong statute. Sometimes the claims became statute barred due to the delay. There is a lack of consistency in some cases between the bodies and sometimes within the bodies regarding the procedures to be followed.

The system is overly legalistic. A set of circumstances may arise in respect of a single relationship between an employer and an employee which could give rise to claims within up to four different fora. The idea is to try to pool the resources we have and to provide a service in which one hearing can dispose of all the disputes between a single employer and an employee. That in itself is a good thing. If one pools resources the situation would be more efficient and cost effective but the focus is not on saving money, as such. The focus is on providing a better service for people such as the petitioner and employers and employees generally.

Senator Cullinane inquired about the legislation. I am currently in discussion with the parliamentary draftsman on the legislation and we hope to be in a position to publish the Bill in October of this year. In the meantime, steps are being taken within the existing legal framework to improve efficiency.

There are no backlogs with the rights commissioner service of the Labour Relations Commission or the Labour Court. The delay in the Equality Tribunal for mediation of cases is down to three months. Serious delays remain at the Employment Appeals Tribunal, EAT, and the Equality Tribunal in the investigation of actual hearings and can go on in excess of a year. We have asked the Minister for Public Expenditure and Reform to allow rights commissioners to be appointed as equality officers so they can hear equality cases as well.

Ms Elaine Cassidy

The Companies Bill which has passed Second Stage increases and codifies responsibilities on directors. The penalties for breaches of these in many cases have increased too. The ODCE, Office of the Director of Corporate Enforcement, has also been given additional powers, such as the power to wind up a company with a courts’ permission.

On the point made by ICTU of companies acting as a group and hiving off assets to another to avoid paying creditors and employees, section 600 will cover that. It is specifically designed to deal with cases where assets are split. The Bill provides a creditor can petition the courts to take moneys from the other related company to pay the debt of the insolvent one. The current legislation provides the amount for defining a creditor is one to whom a company is indebted in a sum exceeding €12,600. This has now been reduced to €10,000, a lower onus on the employee, accordingly.

The Companies Bill has been ten years in drafting. It has been a collaborative work with the Law Society, IBEC and the trade unions, as well as other interested parties. Considerable attempts have been made to balance the requirements to encourage enterprise with the strengthening of directors’ duties. Although the Bill is on Second Stage, the Department is still welcoming suggestions from interested parties. Since it was published in December, we have had hundreds of suggested amendments. All suggestions will be considered on Committee Stage in the autumn.

Mr. Padraig Dooley

Current enforcement is done by civil enforcement. Normally, an individual, a union or ourselves, on behalf of the Minister, can take a case to the Circuit Court. It is not a successful method. In 2011, there were over 800,000 in awards referred to us between the EAT and the Labour Court. We collected 88,000 of these. In 2012, there 453,000 in awards referred to us, of which we received 105,000.

Normally what happens is a complainant asks us to take a case on their behalf. We generally have a look at the insolvency of the case because in many cases the business has ceased or the employer is on social welfare. We have problems when it is in the limbo area of being abandoned. The proposed legislation provides for civil enforcement, which works in some cases, and criminal prosecution. In certain areas, we are provided with the powers to go after directors. Section 37(3) of the National Minimum Wage Act 2000 is one such provision.

Senator Susan O'Keeffe

Like other members, I thank Mr. John O'Sullivan for attending today. I can only imagine the perseverance and the effort on his part. I know what it takes to pit oneself against the expertise of everyone else. Many people who have lost their job have probably never heard of the EAT and the apparatus around it. Those who face it can lose their confidence in the system when jargon and acronyms are used at a session. We can all fool ourselves that we are trying to create a system that is easy and accessible when in fact it is a difficult task. I welcome the proposals on the establishment of a workplace relations commission.

It is unfair of IBEC to suggest employees are confident in defending themselves. It is risible to suggest that someone could become an expert in employment law immediately. The argument it does not cost anything is also risible. Of course, it costs the minute someone loses their job and has to take advice on how they might take on the apparatus of the State and their employer. I am disappointed IBEC claimed frivolous and vexatious claims are made. Of course, there will always be people who will try it on. This is not the point of this exercise. Mr. O’Sullivan was saying he did not want what happened to him to happen to others. We can also get into the frivolous and vexatious behaviour on the part of employers. I am very disappointed by the tone IBEC took. This is about progressing and making the system better.

However, I would make the point that we will always be limited by that case.

The key thing in any new legislation must be how an individual - a Mr. O'Sullivan or a Ms O'Keeffe - faces the establishment and the employer without that kind of knowledge, how can we genuinely expect them to do that and whether it is it fair to say that this is going to be an accessible, easier and friendly apparatus. I am not convinced that can be the case. Not unlike Deputy Boyd Barrett, I worry when I hear language about establishing something that is world-class. I believe in great aspirations but over all of last year, we have seen the establishment of SUSI for-----

Chairman

Student grants.

Senator Susan O'Keeffe

Thank you. We have seen how SUSI was clearly set up in good faith to make that system better. I am not saying the Department's system is the same but sometimes when people start bringing things together and amalgamating them with language about making it better or world-class, some things that were there get lost in the rush of enthusiasm that takes over. I would be very concerned, as the expression goes, that they would have the confidence to represent themselves. I am not convinced that what we have seen in respect of this legislation will provide that. The three months' waiting time is, again, a great aspiration. Given what representatives from the Department have said about the great backlog for the EAT, without a serious effort to put something in place that would really take on that acknowledged backlog, I am not entirely convinced that we will see any improvement. I suspect that if there are a number of cases arising, it is because people are becoming more educated, interested, able and willing to take people on in a way they perhaps did not do before. I am not sure whether we are not just moving the chairs and tables around on the deck.

The representatives from IBEC say that frivolous and vexatious claims happen hundreds of times, particularly at the rights commissioner hearing. I do not know the figures but if one was to take the rights commissioner hearings out of it, is IBEC really saying that this is also the case with regard to the EAT? Sometimes, I find people put in one thing to confound another and to make us feel that there is a lot of waste going on.

In respect of the bond, I take the point made by the Department that it has examined this. It says there is a difficulty with it. I wonder about the suggestion made by Mr. O'Sullivan about a guarantee. Is there a point possibly after the first part at which a bond could be paid? I feel we could be more creative rather than just ruling it out and saying "No" to a bond. In its review and drafting of the legislation, could the Department commit to going back to see if there is another version of the bond or bond system? While IBEC is very keen for employees to pay up-front, it is not so keen for employers to do anything in that regard. It is encouraging a system whereby employees have to pay for the service. I am happy that Ireland is an outlier in that matter and believe it should remain so and not charge people to take a case given all the problems that already exist for employees.

I am very welcoming of the procedure. It is a very complex case and perhaps the lesson for us is that we need a full day for everyone to have their say. I genuinely welcome the exchange here. It is extremely useful in respect of Mr. O'Sullivan's case and drills down in a way we do not often get the chance to do because he has been brave enough to let us do so.

Chairman

Unfortunately, another vote has come up. Does Ms Murphy wish to make a quick point? We have two minutes.

Ms Rhona Murphy

I would like to make a quick point because I think we were criticised in pretty stern terms there and our arguments were referred to as risible. At all times, we have been respectful to Mr. O'Sullivan. At no time did I suggest that his claim was frivolous or vexatious. This is not my language. It is language that is reflected in the legislation. It is acknowledged as a problem by the Department of Jobs, Enterprise and Innovation and has happened to me as a representative in attending cases.

In terms of people representing themselves, unfortunately, the only thing that will create an atmosphere where that can be done is by simplifying the legislation. That is something that IBEC would very much welcome because employers suffer from the complexity of the law just as much as employees. This suggestion that employers are rolling in money with endless resources to pay for legal representation is a fallacy, particularly at the moment. What we require here is a little balance. The ongoing work in the Department is very welcome to that extent. It is trying to simplify what has become a very unwieldy and complex system.

Chairman

Deputies, Senators and the representatives here will all have their different perspectives and nuances on the issues but it is particularly valuable for Department officials because it will help them in terms of the preparation of legislation. The dynamic we have today means that people will have different views and leave this room with different views but the hope is that Department officials will be able to chisel their way through the arguments and sharpen up the legislation. It is all right to disagree. We will have more of that. I will suspend the meeting for about six or seven minutes and I apologise for the disruption caused.

Sitting suspended at 12.55 p.m. and resumed at 1.10 p.m.

Chairman

I cut Ms Murphy short by two minutes. Did she have anything further to add?

Ms Rhona Murphy

No.

Deputy Peter Mathews

I welcome everyone. As Senator O'Keeffe mentioned, there is one individual as well as the representatives of institutions and associations. This sets out the playing pitch atmosphere of much of what happens at employment appeal tribunals and elsewhere.

Since our second last break, I have been present with a different status - I have been ejected from formal membership of the committee. I am here under sufferance of the Oireachtas as a Member who can float around, but I have no committee membership responsibilities. Perhaps there should be an Oireachtas committee membership appeals tribunal, but there is none currently.

I thank and salute Mr. O'Sullivan. A four-year odyssey is a long time.

Mr. John O'Sullivan

Until retirement.

Deputy Peter Mathews

It is four fifths or two thirds of the time one spends in secondary school. It is a long dent in the family, given one's preoccupation with an effort to achieve justice rather than law.

I do not buy the claim about frivolous or nuisance appeals. For example, companies often boast about getting 1,000 applications for one job, none of which are frivolous or nuisances. People do not always follow up but unless they have submitted their applications, there is no chance of reaching the next step of a just and fair consideration. I have first-hand experience, as do other members in their wider families, not just of employment appeal tribunals, but of annual assessments of jobs, particularly among trainees in professional services who may spend three or four years on trainee contracts. Dysfunctional human behaviour in large organisations can be taken out on trainees. In theory, there is an opportunity to get human relations managers to listen to reports of whatever has transpired. In reality, the HR departments of large organisations are sanitising divisions for coercive-type behaviour. I am telling the raw, truthful facts. I have no ideological position on this matter.

As organisations grow bigger, the chasm between justice and law grows wider. We all know in our hearts and souls where justice lies, that being, in principles, not in law. If principles are clearly set out, as in a family, we know that there is a better chance of having fairness in behaviour. If there is a plethora of complex, preconditional and post-conditional rules, one will not get much fairness. It is an illusion that the more complex the rules become by way of legislation, the greater the need for qualified experts to advocate various potential or theoretical positions. We have seen this in the Dáil in the past few weeks and now in the Seanad in the context of the Protection of Life During Pregnancy Bill. We all know the principles involved, but they are getting lost in the maze of legislation. If I was on a surgical table for a brain transplant - which my enemies would say I needed anyway - a heart operation or neurosurgery, the last aspect that I would want to insist on would be clarity by way of legislation for the surgeons involved. Provided the surgeon is well trained, well principled and has the patient's best interests at heart, I am happy. That is life.

Similar to law and employment, most of the medicine practised is iatrogenic medicine. Most people wonder what that is. It is the medicine that clears up the misdiagnoses and earlier medical procedures of a doctor who dealt with the same patient. The figure in America is 25%.

Chairman

Deputy Mathews has gone off topic.

Deputy Peter Mathews

The same principles apply to employment situations. We have a world class workplace relations service. We would all vote for that, just as everyone is in favour of Santa Claus at Christmas. However, employers are usually better resourced unless they have entered into difficulty. Fairness and principles can still be achieved through just people listening to the facts of cases and eliminating delays.

I commend Mr. O'Sullivan on his clear, concrete, seven-section document. It addresses the realities. With institutions and establishments, the danger is that people get lost in theories and hypothetical, abstract language. I have nothing against certain personalities. It is the way that language works. This is like Leaders' Questions, as the Chairman knows. Questions are asked in obtuse, obfuscated language in the third person and using the passive tense. The answers are the same. There is no engagement on ideas or communication. Imagine if we used this language across the dinner table at home. We would get nowhere and there would be rows, resentments, etc.

The objective is to declutter. If there are five establishments or institutions, we should knock heads and bring them together. The people involved are well trained and well qualified. Some of them have masters, PhDs or professional qualifications. We should simplify. For example, there are seven headings in this document. What are the practical experiences under these?

My experience was with the insurance ombudsman years ago. It related to an endowment policy that had substantially been missold.

Chairman

I am sorry to interrupt the Deputy, but we are now three hours into the session and the witnesses have been present for three hours and 20 minutes. We must move on with questions. They have been disrupted a number of times.

Deputy Peter Mathews

I am not just referring to cases of employment. I mean job loss, employment appeal or tribunal situations and other areas of annual appraisals. For instance, the young doctors whom we saw on television. It is absurd that they must work 24-hour non-stop stints. I would be worried entering an accident and emergency unit if the doctor treating me had worked 24 hours. Doctors are also under pressure to supply the middle management of the HSE with head count budgets of this and that procedure. That is wrong, plain and simple.

With regard to the establishment, I salute Mr. John O'Sullivan who has done his bit. We must take a leaf from his doggedness, determination, honesty and fairness in what he did. I know what it is like because I have fought those battles. It is only when people realise that one is not going to give up and will continue to talk in true and fair terms that eventually turns the heavy iron door of the establishment and one is allowed enter. Determination, etc., does not always work though in situations that can be replicated in large numbers, for example, making a claim with 25,000 people in similar circumstances. In that instance the wagons form a circle and the establishment rejects the case until it becomes a major bomb or keg of dynamite with an ever shortening fuse.

With regard to the defined benefit pension funds, we must be brave and courageous. We must step up to the plate and describe the material in easily measured categories that are simple to understand. Every picture of the people can be divided into 12 sections like a jigsaw which is put together to make a picture. We can do the same for employment, training, appraisals and all of that. There are everyday ways of making it sensible to measure, describe, discuss and reach agreements. We should slim down the lever arch files to just six page documents with charts, pictures and bars in order to get a handle on what must be agreed, in principle, and then send the instructions and directions around to put the measures into effect.

We must remember that the single person represents justice. The establishment has multiple layers of professional qualifications and multi-head-counts so there will be huge case law. That means that people will go around and build up costs. The single individual can, in principle, just show the facts. They are obvious to people who want to see them but that does not always happen. There are always obstacles along the way. The first could be a cost of entry. There should not be a cost of entry. One could think that a case did not become a formal complaint and, therefore, the first stage was nuisance, vexatious or frivolous but that would not be the case. I would expect that way of thinking because people will learn that a claim is a bigger mountain to climb and he or she may have other things to do. He or she might have had a new baby and will not want to waste four years of their lives banging their heads against the establishment.

Also, when people exist in this limbo of uncertainty, with questions all over the place, their peers begin to doubt them, and think they are odd and have a problem. That is not fair either. Sometimes there are twisted malevolent people in powerful middle management positions in the public service, private industry or whatever. Those people are not nice and they are very hard to deal with. They are malevolent and destructive. I have outlined the things to watch out for and that is my full contribution with my new status.

Chairman

I must cut the Deputy short and call Deputy Charles Flanagan.

Deputy Peter Mathews

The vote I left the meeting to attend was turfing me out of the committee. It was like turkeys voting for Christmas.

Deputy Charles Flanagan: I, too, commend the courage and tenacity of Mr. O'Sullivan. We will only do him a service if we conclude the hearing, if not today, or on a future occasion by seeing what progress we can make within the frame of the seven points as raised by Mr. O'Sullivan.

I wish to bring the debate back to discussing remedies that the committee might pursue or provide for him. I missed the start of Deputy Boyd Barrett's contribution and he may have raised the following matter. It is essential that we examine statistics.

I listened to the exchange between Ms Murphy and Mr. Douglas on frivolous claims, no-shows and non-compliance. Surely the Department has a list of all of the cases and is in a position to say how many of them have been frivolous. I do not mean those that are lodged with a frivolous objective. I mean cases that have been ruled frivolous by a commissioner or a hearing conducted by the employment appeals tribunal. We should also know the percentage of no-shows. Are there no-shows on the part of the employer? Are there no-shows on the part of the employee? I am surprised that people have speculated about them and adopted positions. We should know whether it was the employer or the employee. These are matters of fact so lets have the details.

I wish to comment briefly on the difficult matter of costs. I am anxious to see how the Department handles costs under the new regime. It seems to me, in spite of what Ms Murphy has said, an employee may go to a hearing and be met by a senior counsel with tomes of law books and case law so he or she just does not stand a chance. In the District Court one does not have a senior counsel so it seems bizarre for senior counsel to appear at an employment appeals tribunal. Does it happen? I would say not. However, the delegation is engaged in such appeals and has told me that it does happen. It is a pretty poor show, in terms of justice, that somebody with no representation is pitted again senior counsel. That is so unfair. It would get an appeal off to a bad start and deters people lodging an appeal in the first instance.

I wish to make a brief point on bonds. I have not been convinced by the argument made by the Minister that a bond is either ridiculous or introduces a lack of parity to the system. I am not so sure that there is parity in the system ab initio. What about a motor care situation? The driver of the motor car is obliged to have insurance, the vehicle is obliged under law to be covered but that does not mean that the passenger needs insurance. I remain unconvinced by the Minister's argument for the bond and Mr. O'Sullivan has made a good case. The committee should follow up the matter. The arguments put forward by the Minister are not watertight.

With regard to lifting the veil on incorporation and limited liability, Mr. Padraig Dooley mentioned an exemption. Has the Department plans to expand and develop it further in the context of the company law review group? I am sure the matter was referred to in terms of corporate responsibility as distinct from individual responsibility. This is a huge issue because it strikes at the heart of the corporate entity. If there is a way in which the Department feels it might be reasonable, in the circumstances, to expand and develop it regarding employee's rights and entitlement then we should examine the matter.

It is good to see that a number of Mr. O'Sullivan's grievances have been dealt with under the new legislation. For example, the appointment of the liquidators, the timing of the hearing in terms of the delay and the standard formula of awards. It would be difficult to put the latter in standard form but I am sure that reference will be made, in the context of the legislation, to how the awards are formed in terms of the hearing.

I wish to make a final point. The issue here is not justice but the evasion of justice. The law and the new legislation is based on justice. It goes without saying that the law should be just, fair and reasonable. What happens when one of the parties decides to opt out? What sanctions will be applied? How can we, as legislators, be assured that parties will play within the system at all times?

The evasion of justice is the issue here and what this new Bill does to ensure that justice will not be evaded on a widescale basis.

I again thank Mr. O'Sullivan who has done a service not only to himself and his fellow employees but has done some service to the system, having regard to the fact that his petition has been brought to us just as the new legislation is between Second Stage and Committee Stage. This committee might keep an eye on it. The legislation will not come before this committee but Committee Stage will be dealt with in an adjoining room. I thank the Chairman for facilitating this fine debate.

Chairman

Senator Susan O'Keeffe had to leave for a vote in the Seanad.

Deputy Michelle Mulherin

I thank Mr. O'Sullivan. This is a very interesting exposition not just of employment law but of company law, how it operates and how Mr. O'Sullivan and others like him have been affected. Some of what he said will resonate with many people who find themselves in his situation. They may not have looked into it as much as he has but none the less, he raises very interesting points. I also welcome the other witnesses.

Employment law is relatively recent compared to other areas of law, such as property law. For the most part, employment law is about the rights of employees and creating those rights. We have been brought up to speed since 1972 and our involvement in Europe, especially in the areas of equality between the sexes, pay and so on, and it has developed from there.

A frustration has been expressed here in regard to the very technical nature of employment law. There are reasons for that and there are broad principles underlining the whole employment law area based fundamentally, I suppose, in contract and then modified after that to avoid these broad principles constantly having to be interpreted in courts. We have quasi-judicial bodies, such as the Employment Appeals Tribunal and rights commissioners, to examine a codified piece of legislation to establish rights. That gets down to the nuts and bolts of things. The demand is there for this level of detail in that these laws did not come about by accident. We are not all suddenly here wondering why we have such a technical area of law. It is there because of pressure to make the rights of employees clearer.

Ms Murphy is here representing IBEC. However, the vast majority of businesses in this country are SMEs and from my experience, many of them are as overwhelmed as Mr. O'Sullivan in dealing with the whole area of employment law. These people may employ one person or two people. Whether employers or employees, one can have rotten apples in both camps and I certainly have encountered that. I practise as a solicitor and, to some extent, have seen it from both sides. Many of these small businesses feel very oppressed by the obligations on them. Even if one has an employee who is useless - excuse the word - at his or her job, it is very hard to get rid of him or her. Obviously, that is not from where Mr. O'Sullivan is coming but it is the truth. It takes up so much time and in the meantime one is trying to run one's business. This is not an easy area.

In partial defence of Ms Murphy, in terms of her language, we are always being reprimanded here for language and how politically correct-----

Chairman

Most of those elected to the Dáil are intemperate from time to time.

Deputy Michelle Mulherin

Exactly. It does no harm.

We also see frivolous cases being taken under the planning code, which can hold up projects. That goes with the territory. I would have to agree with Senator O'Keeffe in that regard. It is daunting for employers.

We are getting into all sorts of conundrums trying to protect against this situation. Let us face it, we are not just talking about employees here. We are talking about people who hide behind the corporate veil and do all sorts of things, which they seem to get away with. People set up limited companies for no other reason than the fact they could trade in whatever way they liked. There are laws that require them to conduct themselves in a certain way but we know that does not happen.

Yesterday, we dealt with the Construction Contracts Bill and it is the same story. People traded recklessly, to say the least, and left disaster in their wake. I understand the raison d'être for company law. All capitalist societies need to have it and we want to encourage people to speculate and be risk takers but there comes a point when we must acknowledge that the cost of that is externalised. It is externalised for Mr. O'Sullivan, for subcontractors who do not get paid and for the State which must trump up money from an insolvency fund but people get away with it. It is not that many of these people who abuse the corporate veil are left destitute. They are not left destitute because they are clever enough to have their assets transferred to a spouse or otherwise. We see that happening.

As we evolve as a society, it is a challenge for us to lay down the gauntlet. Our company law, in particular, has been responsible for cultivating a mind-set of recklessness, no more than the financial recklessness which went on in this country. The larger the profile of the person, the harder it is to get him or her. I welcome the comments that some of these things will be tackled, which is definitely overdue.

We are all very familiar with the painful stories of people who are in debt and who made the wrong decision about buying. Many people bought their houses at wrong time and now face personal insolvency but they are taking responsibility for their actions. It is not right for employers to act recklessly and think somebody else will pay the price for their adventures in business. If we can curb that sort of thing, we are doing society a justice. It costs time, money and effort when it is entertained. We need to rethink this.

Companies have been protected for too long by the corporate veil, which not pierced enough. The Statute Book covers fraud, etc., and there is a fine line there but in terms of calibrating the rights and learning from the mess of the Celtic tiger, I hope this will be addressed in the company law legislation. Dialogue is needed about responsibility in the broader sense.

I refer to some of the points raised by Mr. O'Sullivan, including damages and the concern that people are simply doing what they should have been doing in the first place. I wonder about punitive or aggravated damages in this context. The complaint was that there is not a standard formula which, I presume, leaves some discretion towards punitive-type damages. There is only so far one can go with de-formalising these things because one is talking about somebody asserting a legal right. There must, therefore, be a forensic examination of evidence to arrive at a well-grounded decision that somebody's rights have been breached.

People have rights but they must be able to access them. We are dealing with the issue of accessibility to rights. From my experience of appearing before the Employment Appeals Tribunal compared to the District Court or the Circuit Court, it is a more relaxed format as the panel would encourage and draw out evidence from the person. I do not discount for one moment that it may be traumatic at times for a lay litigant to appear before the EAT. There must be a certain formality in the process. I would have concerns if we move too far away from decisions being made in public. We are already moving away from that in family law. We know there is a downside to that. Justice must operate in public. The EAT is a quasi-judicial body that must conduct its hearings in public. We need to know what is happening for a myriad of reasons. I do not think we will ever get away from the formality, but there is an important reason for it. No matter what aspect of the law one deals with, be it employment law or family law, if somebody does not want to help and wants to be awkward, they will succeed. Under due process, time and space is allowed for litigants. Litigants are allowed to make excuses. I do not know how one would get away from it unless there is an ideal world, in which people do not employ those types of tactics.

Chairman

Senator O'Keeffe had to leave for a vote, so I will allow Senator O'Keeffe and Deputy Mathews to ask questions only.

I thank the witnesses for their patience. The Joint Committee on Public Service Oversight and Petitions is innovative and allows a petitioner or citizen to bring their concerns to the Oireachtas. If we as parliamentarians see a wider policy area, we want to bring all the parties together to see if we can assist in change. Although we have been sitting for a long time today it has been a constructive and valuable contribution to the process of change.

Senator Susan O'Keeffe

I thank the Chairman. I echo his thanks to the witnesses for their patience. Somebody else raised the matter of the numbers that ought to be available and I had in fact asked whether IBEC had the numbers. I do not think Mr. O'Sullivan came back to me with any figures. I was arguing with Mr. O'Sullivan about the Rights Commission hearing. Does Mr. O'Sullivan have the figures for the Employment Appeals Tribunal as to the number of failings on either side? I do not know whether IBEC has these figures.

I had asked the officials from the Department if a commitment would be given - I ask then to forgive me if they have done so in my absence - to review the bond issue in light of the conversation today to see if there is a creative way in which Mr. O'Sullivan and others might benefit from that, in terms of the employer having to make that commitment,.

Will the officials also make a comment on the waiting period of three months? That seems a very fine ambition, but I do not know how it will be achieved and, in particular, the way the structure will be together. I would appreciate an observation on this.

Deputy Peter Mathews

Deputy Mulherin alluded to limited liability. I think companies have limited liability in place to deal with transactions and trading, so that if they go bad it does not expose the owners of the business to personal liability. Employment has a personal relationship dimension to it. It has responsibilities, it is not just rights. There are responsibilities, when one is employed by somebody. One is acting as an agent for that person or company. It is a more complex relationship. That must be mirrored in any thinking around fairness in this area. When a person takes a case it brings major challenges to him or her because he or she is open to exposure at multiple levels, not just in the person's employment record but his or her personal situation comes under scrutiny as does everything about him or her. It takes a great act of bravery and courage to go into this arena. That must be expressly recognised. Who wants to go before an Employment Appeals Tribunal? I have had a great deal of life and professional experience, but I would find it daunting. It is awesome. That needs to be taken into account. May I make one suggestion to all the people who are involved in delivering this world class workplace relations service - that Mr. O'Sullivan would be co-opted on to the project team. He has shown his abilities, his undoubted experience. He has an excellent temperament and I would be the first to propose that he be a member of such a project team-----

Chairman

Thank you Deputy. I call Mr. John Douglas to be followed by Ms Esther Lynch.

Deputy Peter Mathews

-----provided he undertakes not to become part of the Establishment.

Mr. John Douglas

I would like to thank the members of the committee. The joint committee on Public Service Oversight and Petitions is novel and provides a welcome process whereby petitioners can petition on areas of concern to ordinary citizens. I thank the Deputies for taking time from their busy schedule to come in to listen to our stories.

I hope the committee will indulge me for about two minutes to refer to Deputy Mulherin's comment on special damages. We have had a very good discussion about the problems and I hope the officials will bring back to the relevant Ministers the very serious problems that are being caused to ordinary citizens as workers in pursuing their rights, particularly when those rights have been adjudicated to be abused. There is a man in the Visitors Gallery who is a member of Mandate trade union and he is lucky that we have the resources to prosecute his claim as far as necessary. Mr. John Mulpeter went to work in Connolly Shoes in Dún Laoghaire 38 years ago. He is not unusual in that three other members of staff had 38 years service. His employer sacked all four staff on the one day back in 2010, without any reason whatsoever. John has an excellent employee record. He had never been on strike and had never had any disciplinary decisions against him but found himself unemployed. Eventually in 2011 John Mulpeter ended up before the Employment Appeals Tribunal. He and the other three staff were represented by the Mandate trade union. Mr. Mulpeter was awarded €1,600. His colleague with the same amount of service was awarded €53,295 for unfair dismissals. Both were sacked and had the same length of service, so one would ask why was there such a discrepancy? The reason was this was a question of special damages. Mr. John Mulpeter suffered a heart attack due to the stress of being sacked and being on the picket line. John was not therefore adjudicated by the trade union to be available for work, so therefore he suffered no loss. Not only was he penalised by losing his job but because he suffered a heart attack due to the stress of losing his job, his award was more or less wiped out.

Mr. Mulpeter is still picketing that store one day a week. We can get neither his €1,600 award nor the €53,295 for the other three members of staff, Mr.Pat Byrne, Damian Keegan and Susan Tighe. As far as Mr. Mulpeter and his fellow workers were concerned, they worked for Connolly Shoes but when we lifted the veil of corporate secrecy behind those companies, we discovered there were five companies. John Mulpeter and his colleagues worked for a company with no assets, which still makes an annual return every year to the Company Registration Office, with a return of zero in trading and the same list of directors. It is not insolvent, it has not been placed in insolvency, so therefore Mr. Mulpeter has no access to his rights. We have an enforcement order on behalf of Mr. Mulpeter and his colleagues. The Sheriff has been down to the shop. The employer picks out a receipt and shows that the stock on the shelves is owned by the company named on the receipt, the premises is owned by a different company and the order the sheriff has is against a company which has not assets. The only thing that remains for the trade union to do on Mr. Mulpeter's behalf is to go to the High Court, at great expense, but we will do it, to wind that company up to give Mr. Mulpeter and his colleagues access to the insolvency fund.

Why should bad behaviour be rewarded? Why should the State not put a charge on that company and its directors? Why should those directors not be banned from ever serving as a company director again? There are associated companies all over the place linked to that company to which the assets have been moved.

This is about the little person, the worker. Workers should have access to address their concerns and to right wrongs. If workers, who are not members of unions or do not have the means, as the vast majority do not, to employ barristers and solicitors and go to the Circuit or High Courts to get enforcement orders, it is a sad day. I ask the officials who are here today to consider this in the review of any legislation. This is not frivolous. John Mulpeter is not frivolous. He has put his health, his well-being and family on the line for the past three years trying to prosecute his rights. He has been run into a cul-de-sac by the legislation. That legislation can be opened up so that he can get his entitlement. No other worker, in this building here, or anywhere else, should have to suffer what he had to suffer. I ask that the message from this committee and the Department officials back to the relevant Ministers is a strong one, that this practice be opened up and that this veil of protection for corporate directors in limited liability companies be removed immediately.

Senator Susan O'Keeffe

The workers are not little people. They are equal.

Ms Esther Lynch

I will take up this point because it is one of the issues very much in play at the moment, the question of whether the hearings should be in private or public. The Rights Commissioner hearings at the moment are all in private. There is a good reason for that. In many of these cases we want to maintain the relationship between the employer and employee which is an ongoing relationship. The type of approach there should involve mediation and getting to an agreed solution, exactly the type of thing about which we have been talking. There is a strong argument that this happens better in a private rather than a public, adversarial arrangement. All appeals should be in public.

The big change we have seen in recent years is Google. It used to be that if one took a case against one’s employer that information would not go very far and would not appear on every search that every employer in the future did on one. No matter whether the person wins or loses a case an employer will say the person is trouble and will not want to employ him or her. There are new developments and existing practices, both of which happen in private. It is essential that the first instance body remains private rather than public as many are suggesting.

Deputy Michelle Mulherin

I agree with Ms Lynch about the Rights Commissioner. Good work does go on there to reconcile differences. I am talking about the Employment Appeals Tribunal or whatever its successor will be. There is a value when one gets to that point in having at least some public knowledge of what is going on.

Deputy Richard Boyd Barrett

I did not hear all of Ms Lynch’s contribution. Is she disagreeing with that point?

Ms Esther Lynch

Yes.

Deputy Richard Boyd Barrett

Is Ms Lynch saying that in the Employment Appeals Tribunal in the first instance or in the new WRC-----

Ms Esther Lynch

There is only one first instance and one appeal. We are saying that it should be-----

Deputy Richard Boyd Barrett

Private first.

Ms Esther Lynch

Yes and then go to public appeal unless there is a strong argument------

Deputy Peter Mathews

To give reconciliation a chance.

Ms Esther Lynch

Exactly.

Deputy Peter Mathews

I think that is wise.

Mr. John O'Sullivan

My experience here today has been a great one for me and I hope that my presence will help in some way to make the Employment Appeals Tribunal be efficient and inexpensive, and that those who are responsible will be held responsible as a result of what has happened here today.

Ms Rhona Murphy

I want to address the question Senator O’Keeffe raised about numbers and non-attendance. Unfortunately, we do not have those figures. We looked for them but they do not seem to be captured by any of the annual reports that we searched. We did find insight into the level of legal representation that occurs in the Employment Appeals Tribunal. As I mentioned briefly earlier, that is approximately 50% and interestingly, the split is relatively even between employers and employees choosing to have legal representation.

I would also like to thank the committee for the opportunity to be here and to present IBEC’s views on the issues raised. We have heard some difficult individual stories and cases but in the vast majority of cases employers attend these fora. In the event that an award is made against them most of the time it is paid. I do not accept the suggestion that HR departments are sanitising divisions for coercive behaviour. Most of the time they are just paying people’s wages, advising them of their maternity protection rights, looking out for their health and safety, paying their pensions. The notion that this is a routine thing is absolutely wrong. I ask that this be borne in mind before we rush to action on issues such as piercing the corporate veil and the chilling effect that would have on employment. The presentation of bonds would be an issue too, as would punitive damages. All of these things have an impact on other people within their place of employment. I urge caution and balance before any decisions like that are made.

Mr. Niall McCutcheon

I thank all the people who have participated in this discussion. My colleagues and I have found it very useful and we will take back to the Minister what we have heard today. Two Bills are under discussion here, the Workplace Relations Bill, which we hope to publish in October, and the Companies Bill, which is before the Dáil. We would welcome any suggested amendments to be considered in the context of those Bills.

In response to the specific questions about the time it takes to process cases and the target in the Minister’s plan of three months between receipt of a complaint and the scheduling of a hearing, it is a challenging target but it has already been achieved in the Rights Commissioner hearings. There has been huge progress there. At one stage not that long ago it took eight months to get an acknowledgement of a complaint being lodged to the Rights Commissioner service. At the beginning of this year this was down as low as five days. Significant productivity gains have been made and will continue to be made. It will be a challenging target but it is necessary for people to know in order to have confidence in the system that they will get an early hearing of their complaint.

I would also like to emphasise the option of alternative dispute resolution and mediation which will be open to all complaints under this system. At the moment this provides a very quick process in the Equality Tribunal which has had mediation for ten years. Mediations are scheduled within three months. It provides a completely confidential process in which all the issues can be put on the table. The outcome is a confidential agreement which is legally binding and enforceable. It provides, from the points of view of both the reasonable employer and the employee, an opportunity to resolve their differences and to repair the relationship without going into a more legal forum. We find in the Equality Tribunal that 50% of cases that go to mediation end there. They are resolved at mediation or the party taking the complaint realises that they do not have a strong case and withdraws. Sometimes the parties meet outside the mediation room and resolve the matter between themselves directly. I strongly recommend that all parties seriously consider the option of mediation or alternative dispute resolution which will be available under all headings of employment law under the new structure.

On the bond issue we will take all the points that have been raised here back to the Minister for consideration, including the proposals that the petitioner made.

Senator Susan O'Keeffe

In light of the fact that the figures are not captured, as IBEC has told us, is there a way in which that might now be done? It is a fair point for the future. I do not know whose responsibility it is.

Chairman

I will conclude. Several parliamentarians queried this issue so maybe the Department would consider it.

Mr. Niall McCutcheon

In response to the question about frivolous and vexatious complaints, the term is in some of the legislation. It is a legal term not a pejorative one and has a very narrow meaning. As director of the Equality Tribunal I am empowered to dismiss a claim which I consider to be frivolous or vexatious or misconceived. Frivolous means that it has absolutely no chance of success. Vexatious means that it is a claim of little merit but which has been taken solely to put the respondent at the cost of defending the claim. In my experience there would be very few cases coming before the Equality Tribunal which meet that test.

The other part is where people do not show. If a complainant does not show the case is dismissed there and then, unless one has a good reason, for example, if the respondent does not turn up and the complainant has a prima facie case the respondent is not in a position to rebut that case and the complaint will succeed.

Chairman

The query was about retention of statistics around that issue. If Mr. McCutcheon is not doing that he could have a look back at it.

Mr. Niall McCutcheon

I will have a look at it to see if I can get anything.

Chairman

That concludes our business. It has been a long session. I thank everybody for attending the meeting. I thank especially the petitioner, Mr. John O'Sullivan, for travelling from Cork to attend here today. It is very much appreciated. I also thank Mr. John Douglas from Mandate, now president of the ICTU, Ms Rhona Murphy and Mr. Loughlin Deegan, who has already left, from IBEC, Ms Esther Lynch from the ICTU, Mr. Vernon Hegarty and Ms Deirdre Canty, from SIPTU and Mr. Niall McCutcheon and all of the team from the Departments of Jobs, Enterprise and Innovation, and Social Protection. I thank them for attending and for their co-operation in dealing with members' questions.

I will adjourn briefly to allow the witnesses to leave and we will reconvene briefly in private session to deliberate on our recommendations.

The joint committee went into private session at 2.05 p.m. and adjourned at 2.30 p.m. until 4 p.m. on Wednesday, 18 September 2013.