Redundancy Payments Bill, 1970: Committee Stage.
Section 1 agreed to.
I move amendment No. 1:
In page 2 to add to the section the following new subsection:—
"(2) If a contributing employee is or was dismissed by reason of redundancy between the 17th day of May, 1967 and 1st day of January, 1968 and employment with the same employer is resumed within 34 weeks, continuity of employment shall not be broken by the interruption."
In moving the adoption of this amendment I should like, first of all, if I am in order, to make a very brief general statement about all the amendments tabled by the Labour Party Members. I do this in order to help the House and the Minister and to expedite the business before us, especially in view of the fact that it has been indicated that we may finish at 5 o'clock this evening.
In all, we have submitted 28 amendments and frankly we find ourselves in somewhat of a dilemma. The Minister made it perfectly clear last week in this House, as he had previously done in the other House, that under no circumstances whatsoever would he entertain any amendment providing for retrospection to any degree in respect of any matter coming within the ambit of this measure.
Our difficulty now is that if we invite or if we open up a protracted debate on each of the 28 amendments, including quite a few dealing with retrospection, we run the very grave risk of holding up the implementation of the new legislation. This is precisely what we do not wish to do and it is precisely what workers and trade unionists everywhere have specifically asked us not to do. In all the circumstances, therefore, and in view of the fact that many of the amendments are self-explanatory, we do not propose to go into all of them in very great detail. It is not to be taken, however, from this that we do not regard them all as very serious. That is not so. We feel very concerned indeed about each and every one of them. We hope that the House and the Minister will give favourable consideration to them all.
Coming specifically to amendment No. 1, the purpose of this is very clear and I do not think I need to say a great deal about it. The purpose is, of course, to give retrospection to actions taken between 17th May, 1967, and 1st January, 1968, that is in the interim period between the publication of the Principal Act and the date of its operation—a period of 34 weeks. During those 34 weeks a few employers —and I stress a very few employers— in the knowledge of the legislation to come and in anticipation of it took action which broke the continuity of employment of their workers. I want to stress that my experience of employers down the years is that they are very anxious to do the right thing, to treat their employees properly. However, there are a few, and there always will be a few, who will take advantage of any legislation or any facility to deprive their workers of their just rights. That is what happened in this case. In the interim period between the publication of the Bill, as it was at that time, on 17th May, 1967, and the date of operation of the Bill, many workers were deprived of their rights and this amendment simply seeks to put that right.
In support of Senator Kennedy on this amendment, I should like to add the point that I think that when the Principal Act was going through the House it was felt that the 26 weeks proviso would cover the period between the introduction and the passing of the Act. I counted it as 34 weeks, so that there was the eight week period which is not bridged by the Principal Act and which, as Senator Kennedy pointed out, gave rise to some people being deprived of what I would agree was the intention of the drafters of the Principal Act.
I appreciate Senator Kennedy's introductory statement regarding the overall question of retrospection and his reference to my statement here last week. Indeed I, too, should like to get the Bill finalised and brought into operation at the earliest possible date. I would say as regards this question of retrospection that there is a lot involved here and a good deal of estimation, which may or may not be reliable, in regard to what the fund might be able to bear. I am afraid that events since the circulation of the Bill on the 22nd January do not give me any greater enthusiasm for retrospection. Apart from that, the principle of retrospection is not good. It is difficult administratively to get retrospection to a date which would be satisfactory to everybody. No matter which date we might fix, somebody would feel that we should go back somewhat further.
We have an amendment here which suggests that the Bill should become effective from the date when it was circulated when employers would first know its provisions. I can see a certain force of argument in that. Another amendment suggests as a commencement date the date when it was finalised in the Dáil when employers might know even better what exactly it was likely to contain. The same objection applies to both of these dates and I have set my mind against accepting retrospection.
The only concession I would make to that is that I would have the possible costings fully examined and see if on Report Stage it might be possible to give any measure of retrospection. That is the only concession I would make on this question of retrospection.
Most of the amendments have appeared in the Dáil in some form or another. Anywhere I thought that a Dáil amendment merited consideration or had some useful function in relation to the improvement of the legislation I accepted or brought in an alternative one. I think that we have already screened the provisions of the Bill pretty thoroughly. We have had much discussion with both sides in employment on this—we must consider two sets of people concerned in this legislation, the employers and the employees. It is not always correct to assume that the employees are always right and the employers are always wrong. The employer is an important person too. We must be careful not to make it unreasonably difficult for him, while at the same time making it possible for the employee to gain the greatest possible advantage in accordance with the spirit of the legislation.
Sometimes one is tempted to legislate for the most awkward situation that could conceivably arise, in other words, to take into consideration an employer who would be out to circumvent the provisions of legislation by every conceivable means. If we had to legislate to that effect I am afraid we would be creating for the good employers—thank God they are the vast majority—obstacles and difficulties that could hardly be justified in order to try to tie up the odd exceptional case of one who would deliberately set out to circumvent the provisions of the Bill with regard to his responsibilities. This type of employer, so far as he may exist, will always be a problem anyhow. I think we must keep in mind the more reasonable approach of persons who will try to co-operate.
Getting back now to the specific provisions of amendment No. 1, I understand—and I put a lot of examination and study into this legislation which was introduced by my predecessor—that in the interim period between the possibility of applying the 1967 legislation to the period between the introduction and the circulation of the Bill and the passing of it in 1968, the period which is sought to be covered here by the retrospection proposed in this amendment, was carefully considered. The specific cases sought to be provided for here were examined but on examination I am afraid they did not support the accusation that the employers concerned deliberately took action to anticipate the provisions of the Bill. Indeed, the argument could also be made on the other side that during the interim period there were persons who held out until the Act became operative so that the provisions would apply to employees. For that reason I did not find any sound reasons for going back to cover that interim period. I went over all this in the Dáil. I would not consider accepting this amendment for that reason.
There was an allegation made that my predecessor was incorrect in a statement made by him on Committee Stage of the 1967 Bill in the Seanad, 29th November, 1967. Deputy Hillery, my predecessor, said on that occasion that the question of laying off people and re-employing them for the purpose of breaking continuity of employment was covered under the Schedule, that it was provided that such a period would have to be at least 26 weeks. I want to put that on record in order to correct the allegation made. He added that to disemploy people for a week or two would not break continuity and that they were protected by the Bill as it stood. The specific point which Deputy Hillery was making was that employers who might resort to the device of interrupting the employment of their employees for a short period specifically to break continuity could not succeed and that the provisions of the Schedule fully protected employees in that situation. He was correct in that.
It is now being suggested that because the period which elapsed between the date of publication of the Bill in 1967 and the commencement of the Act was a little longer than the period specified in the Schedule, there was a loophole by which employers could break their employees' continuity. Labour Senators, no matter what their opinion may be of the integrity of employers, would need to have a high opinion of their ingenuity and foresight to say they could within that short transition period arrive at means and devices whereby they could circumvent the provisions of the legislation. I could not accept that it happened. I do not think it is necessary to say anything further on it.
I have covered the whole question of retrospection as it was approached, in a reasonable way, by Senator Kennedy. He is aware, too, of the amount of discussion and consideration we have put into this in the Dáil. I have had the costings worked out. I will have them worked out again and if I think it could be justified on any grounds I will have the matter discussed on Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 2.
To add to the section the following new subsections:—
"(3) If an employee was or is in continuous employment on or subsequent to 22nd January, 1971 and his normal weekly hours of work in the period of 104 weeks ending on 22nd January, 1971 were not less than 21 hours, but were reduced below 21 by reason of redundancy, or in periods of redundancy, that employee shall be deemed to have been employed for at least 21 hours per week on 22nd January, 1971.
(4) Payments (if any) to employees affected by subsection (3) by reason of redundancy before the commencement of this Act shall be made from the Redundancy Fund."
Amendment No. 2 seeks to do in respect of this Bill what amendment No. 1 sought to do in respect of the Principal Act. In other words, we are suggesting that, for practical purposes, the Bill should operate from the 22nd January, 1971, that is the date of publication, rather than from July or August of this year. We do not know when it will come into operation.
In replying to what we said in respect of amendment No. 1, the Minister stressed the question of costings. I have no way of calculating what the adoption of amendment No. 2, or all the amendments for that matter, would cost, I do not know what effect it would have on the Redundancy Fund. I doubt whether it would have any great impact on the credit balance of £1¾ million which the Minister said was in the fund at the end of the last financial year, but even if it wiped out the credit balance altogether, would this be a great tragedy? What is the purpose of the fund? Is it to help workers who become redundant and who are, therefore, unable to maintain themselves and their dependants in decent comfort? Is the purpose of the fund to assist workers to seek alternative employment or to train themselves for other work? Is the purpose of the fund to enable workers to re-adjust themselves and their families and dependants to an entirely new way of life? Is it the purpose of the fund to help workers to migrate or to emigrate in search of alternative employment?
In my view these are some of the principal purposes of the fund, not to enable the Minister, from time to time, to claim that there is a substantial credit balance and so on. The fund is there to be used when and where necessary. Personally I see no great merit in building up a fund for no purpose, especially where there is great need for its use.
I am not too worried about not having a nest egg in the fund. I am worried at the erosion of the surplus. This can easily take place. One must keep an eye to ensure that the income of the fund is sufficient to met the outgoings and if they get out of line the present surplus would be very quickly eroded by improved payments. We must always see that outgoings are kept in line with the income to the fund. The surplus can be easily eroded in a short period and we would find ourselves having to impose extra contributions and this is something I wish to avoid.
I am agreeable to withdraw the amendment on the assurance given by the Minister.
Amendment, by leave, withdrawn.
I move amendment No. 3:
To add to the section the following new subsection:
"(5) If a contributing employee is dismissed by reasons of redundancy before attaining the requisite period of continuous employment in section 7 (5) of the Principal Act (as amended) and employment is subsequently resumed with the same employer within 104 weeks, continuity of employment shall not be broken by such interruption but the period of interruption shall not be reckonable."
I do not propose to say much on this which is self-explanatory. We are seeking to ensure that if anybody becomes redundant before attaining the requisite period of qualification and is re-employed within a period of 104 weeks, he will not lose the service he has. We are not seeking that the interrupted service be reckonable for a payment from the Redundancy Fund. It is a reasonable request.
This is related to part of an amendment that came up in the Dáil. It is, in my opinion, the more reasonable part of an amendment we discussed in the Dáil. It has a certain amount of merit. However, I should like to say to Senator Kennedy that where a person's employment is interrupted and he resumes employment with the same firm, this amendment seeks to permit the period during which he had previously worked to be allowed as part of the required continuity of employment to qualify for redundancy, without counting, of course, the lapsed period during which he was not working. One could take the wrong view of employers, or of an employer who had not the best interests of his employees at heart, but this amendment could react to prevent a person re-employing employees whom he had employed previously, if he wanted to avoid paying them redundancy money at some stage. He could instead take on new employees who would not be qualified for the benefit. At the same time, I can easily see where a firm that may have gone out of production for a time, and reopened, would require the expertise of the workers they had previously employed. There is a certain amount of validity in this argument. I should like to have a look at the whole question on Report Stage and, perhaps, bring in an amendment to meet it. I would not agree to the 104 weeks—that is rather a long period. If I bring in an amendment it will involve a much shorter period.
We are satisfied, on the understanding that the Minister will have another look at it.
Amendment, by leave, withdrawn.
Section 2 agreed to.
I move amendment No. 4:
To add to the section the following new subsection:—
"() A person who is or becomes insured for all purposes under section 4 (1) of the Principal Act on or after the commencement of this Act shall not cease to be insured for the purposes of this Act (unless he opts out of insurance in writing) until he attains the age of 70 years."
We consider this amendment to be a very important one. I referred to it on Second Stage. It would give an enticement to people who are at present insured under the Social Welfare Acts to continue on for the purpose of redundancy payments. I am particularly thinking of the non-manual worker who goes over the £1,600. When the Principal Act was being debated in this House the Minister seemed to be sympathetic to a degree. At that stage the limit was £1,200, but he made the point that redundancy payments were a new concept in Ireland, that he would like to get the Bill through and that he would possibly look again at this point before any further amending legislation. Now we have the amending legislation.
I seriously submit to the Minister that because a person's annual salary is £1,600 or over there is no guarantee that he will not become redundant. In other countries the tendency now seems to be very much that the white collar worker and what one would call the middle management class are becoming redundant. This happens very often where there is a merger of companies. In addition, these are the people who are not entitled to unemployment assistance or to any social welfare benefit.
Another point to which I should like to refer is that in arriving at—and the Minister probably has heard of this in another area—the £1,600 figure for deciding if a person is liable for social welfare contributions, what is termed normal and regular overtime is taken into account. People whose basic salary is less than the £1,600 but who have to work normal and regular overtime are now also being excluded from social welfare benefits and, therefore, from redundancy payments. There is a case such as this before the tribunal at the moment.
Non-manual workers tend to be better provided for by pension or retirement services, or are covered by separate schemes. This is particularly true of the Civil Service, local government bodies or semi-State bodies. However, there are many small employers whose clerical workers are earning over £1,600 and these are people who may be in a very vulnerable position during the next few years. Therefore, I ask the Minister to consider seriously this amendment for the reasons I have stated.
I am afraid I could not accept this rather strange amendment. In order to permit opting-out arrangements it would be necessary to set up elaborate machinery. I wish to point out to the Seanad that when this Bill was introduced the limit for insurability was £1,200. The period in which non-manual workers were permitted to continue in benefit under existing legislation was two years, and that was increased to four years. In the meantime the insurance limit has been increased to £1,600 and we still left in the Bill the four years which I consider to be adequate cover.
The provisions sought in this amendment would not be justified, particularly as the opting-out arrangement could be rather complicated and would involve the setting up of unnecessary machinery that would hardly be justified. The four years after which insured persons reach the income limit of £1,600 is adequate cover and it is not necessary, therefore, to accept this amendment. In connection with this, I should like to mention that the social welfare limit of £1,600 is most likely to be abolished eventually.
A propos the last remark, does it mean that if the £1,600 limit is abolished, everybody would be covered by redundancy payments?
Everybody who would be qualified under the provisions of the Social Welfare Acts would be covered for redundancy purposes.
If I understand the Minister's last remark correctly what the amendment is trying to achieve will be achieved in this other way, if you remove the social welfare limit, and they qualify otherwise under the Bill. Am I correct in that?
The Minister made a point about the problems of the administration on opting-out. However, there is provision already under the social welfare code where if you go over the £1,600 limit and you wish to remain a voluntary contributor for widows' and orphans' pension purposes, there is a system for doing that. I could not accept that the administration problem would be too difficult to operate. If the amendment point is valid, the administration could be looked after. However, in view of what the Minister has said—unless he would like to elaborate further on it— it appears clear that the social welfare limit of £1,600 will be removed. That means that non-manual people would be covered by redundancy payments.
I would point out to the Senator that the machinery there at the moment is for opting-in rather than for opting-out. Persons may continue as voluntary contributors.
Amendment, by leave, withdrawn.
I move amendment No. 5:
To add to the section a new subsection as follows:
"(3) Notwithstanding subsection (1) of this section or paragraph (b) of subsection (1) of section 7 of the Principal Act a person who at the date of the termination of his employment had attained the age of 70 years and had completed a period of 40 years of continuous employment as defined in Schedule 3 of the Principal Act shall be a person to whom this Act and the Principal Act applies provided that immediately prior to his attaining the age of 70 years he was an employed contributor in employment which was insurable under the Social Welfare Acts 1952 to 1966 or had ceased to be ordinarily employed in employment which was so insurable in the period of two years ending on the date of his attaining the age of 70 years."
The purpose of the amendment is to add a new subsection to section 3. The position under the Principal Act, clarified under section 3 of the Bill, is that a person over 70 years of age who becomes redundant does not qualify for any benefits whatever. There are many who consider this to be unjust, particularly in the case of employees with 30, 40 or 50 years service with a company or organisation. In my amendment I am trying to change this position. Briefly, the amendment seeks to ensure that when a person over 70 years of age becomes redundant, if he has 40 years of continuous employment he will qualify for the benefits of the redundancy scheme.
This is a very modest proposal and I hope the Minister will accept it. The injustice of the present position was highlighted by the case of an old Dublin firm which decided to close down. A number of their employees had more than 50 years service with the company but they were over 70 years of age. After such long and faithful service, they should be entitled to the ordinary benefits.
In the firm I worked for in Dundalk there were two men over 70 years of age, and there are others approaching 67 and 68. Those men are retained because they are skilled craftsmen. However, the two men who are over 70 years will probably be laid off at the end of 1971. As the Bill now stands, they will be outside its scope and there are no pension schemes to cater for them. They will have to fall back on their old age pensions.
If the Minister examines this—and he should not find any serious implications in the amendment because the number of people concerned would be relatively small—he will find the only provisions in the amendment are that the persons I am seeking to bring into the scheme be over 70 years of age, must have 40 years of continuous employment and must have been in insurable employment on reaching 70 years of age.
I have a certain amount of sympathy with the amendment but I do not see that there could be any exception made for persons over 70 years of age. I should like to remind the Seanad that originally in the Principal Act, when it was introduced as a Bill, the age limit proposed was 65 and this was afterwards raised to 70. We are rather inclined to compare legislation with that in Britain and sometimes the Six Counties. The age limits there are 65 for men and 60 for women. There is a scaling down in both Britain and Northern Ireland of the amounts that are paid. The only thing that would arouse compassion in me is the suggestion that the amendment would apply to persons who have worked for 40 years with the same employer.
The amendment says 40 years in continuous employment. This is a very good record and it would narrow down the number of cases to whom the amendment would apply. There again one must ask the question: should we legislate for a few people? Yesterday I was at the launching of a booklet by the Economic and Social Research Institute which was produced after years of research on occupational pensions by Professor Kaim-Caudle and others. We were discussing the merits of the question of occupational pensions schemes. The amendment we are discussing rather touches on the whole question of retirement. I should hope that we will move more rapidly towards having more occupational pension schemes in which persons of the type Senator Farrell refers to would be adequately covered in addition to any other State pensions that they might be entitled to or any other provisions of a Bill of this kind. For that reason I would be slow to accept this. I am impressed by the fact that the 40 years continous service would reduce the number involved. I shall have a look at it before Report Stage.
Amendment, by leave, withdrawn.
Section 3 agreed to.
I move amendment No. 6:
In page 3 to add, after "trained" in line 4, the following:—
"(f) ‘diminish' for the purposes of the preceding paragraphs means either temporarily or permanently and for whatever cause."
This is a technical amendment and I do not have very much to say on it. What we are attempting to do is obvious. A few problems seem to have risen as to what "diminish" actually means in this section. We are adding on the definition that it means "either temporarily or permanently and for whatever cause." I should like to hear the Minister's view on it.
The Minister is not very clear on what this amendment is seeking to do. I accept that it is to define "diminish". The need for a definition of "diminish" was not made clear in the Committee Stage or the Report Stage in the other House either. As far as I can see the amendment is not necessary. It is a technical matter. If I find, on re-examination, that it has a valid point and that it would improve the meaning of the Bill I will certainly have a look at it.
Amendment, by leave, withdrawn.
I move amendment No. 7:
In page 3 to add at the end of the section the following new paragraphs:—
( ) the fact that, in the opinion of the Tribunal the employee was dismissed (or is taken to have been dismissed) in circumstances of redundancy other than those prescribed in paragraphs (b) to (e) of this subsection.
( ) The Minister may by Regulations add additional paragraphs to subsection (2) and section (5) of the Principal Act shall apply to Regulations made or to be made under this section."
If in the opinion of the tribunal the employee was dismissed in circumstances that were not stated in the section, paragraphs (1) (b) to (e), the tribunal might be able to come in and decide the cause for dismissal. The other portion of the amendment is to allow the Minister to add regulations and the regulations would be covered by what is laid down in the Principal Act.
Part of the problem is that we find it difficult to foresee all types of redundancies. Workers themselves have this problem. It is to broaden the scope of this definition of what is specified in subsections (b) to (e). If this problem arose then the matter could be referred to the tribunal and they would then have power under this amendment to decide whether it was redundancy or not.
I am afraid we must legislate on the basis of present knowledge. One of the main functions of this Bill will be to redefine redundancy as was originally intended before the High Court decision on a specific case now known as the Limerick-Ryan case. Everybody accepted that the definition of redundancy in that case, while it might be in accordance with the letter of the Act, certainly was not in accordance with the spirit of the Act. We have righted that in the Bill by defining clearly what was intended by redundancy.
The Senator's amendment proposes to give the tribunal and the Minister authority to have further amendments if at any time we felt that the occasion arose when a further definition was necessary. I do not think that such a power should be imposed on the tribunal or the Minister. Redundancy as now defined in this Bill has a fairly wide scope within the spirit of the whole legislation. One could hardly visualise an instance arising where any further clarification would be necessary. I could not accept it on the basis of the possibility of some need arising at a future date.
I accept what the Minister says. We had difficulty ourselves but this was, we felt, a constructive attempt to save having to come back with a Redundancy Payments (Amendment) Bill in two years time. I had reservations about giving the Minister all that power, whatever about giving it to the tribunal.
Amendment, by leave, withdrawn.
Section 4 agreed to.
I move amendment No. 8:
Before section 5 to insert the following new section:—
"( ) Section 9 (1) of the Principal Act is hereby amended as follows:—
(i) by the insertion of ‘(including business, industrial or managerial conduct)' after ‘employer's conduct' in paragraph (c).
(ii) by the insertion of additional paragraph (d) ‘or (d) the employee terminates the contract under which he is employed by the employer (not falling within subsection (5) in circumstances in which the employee may reasonably anticipate redundancy because of actual, proposed or expected lay-off, short-time, reduced time, day-to-day working or reasonable uncertainty'."
Amendments Nos. 8 and 9 are related and may be discussed together.
The purpose of these two amendments is to extend the expression "employer's conduct" to include managerial conduct and industrial conduct. We can all envisage a situation in which a worker may become redundant by leaving his employment as a result of the employer's conduct as an individual. Sometimes it happens that a worker becomes redundant in these circumstances because of the corporate conduct of management or industry. We have put down this amendment to ensure that there will be no legal loophole in this respect.
Amendment No. 8 deals with two separate points relating to section 9 (1) of the 1967 Act. It sets out the circumstances in which an employee is taken to be dismissed by his employer. Amendment No. 9, which is also in two parts relates, to section 10 of the 1967 Act. It specifies the circumstances in which an employee who is under notice of proposed dismissal or redundancy by his employer may, without forfeiting his right to redundancy payment, anticipate expiry of an employer's notice by leaving his employment at a date earlier than that specified in the dismissal notice. Again we had similar points in the Dáil.
The first part of amendment No. 8 seeks to extend the definition of an employer's conduct to section 9 (1) (c). It specifies one of the circumstances in which an employee is deemed to be dismissed for the purpose of the Principal Act. The provision in section 9 (1) (c) was included in the 1967 Act—and this is important—to ensure that an employer, where redundancy was in prospect, could not avoid his obligations under the Act by acting so unreasonably towards an employee as to make it necessary for the employee to leave the employment. Cases in which this provision has to be interpreted invariably come before the Redundany Appeals Tribunal, which are called upon to decide whether an employer's conduct was unreasonable or not. I think that is ample safeguard. The phraseology used in the term "employer's conduct" allows full discretion to the tribunal to determine disputes that come before them. They have regard to all the circumstances in each particular case.
May I interrupt the Minister on that point? Why this arose is that "employer's conduct" has tended to be interpreted as his personal conduct only. It was to clarify that matter that we wanted these additional words included to spell it out more clearly. It has happened, evidently, at tribunal level, that "employer's conduct" has been interpreted as his personal conduct only.
I am not quite clear what the Senator has in mind. I am not aware that that tendency has been creeping in and I certainly will have a look at that matter and see if that is the case. The second part of amendment No. 6 introduced again a proposal which I rejected, in another form, in the Dáil. It is also the subject of a later amendment put down by Labour Senators—amendment No. 13 which we shall come across later —and it states that employees should be free to terminate their contracts of employment in anticipation of redundancy and still qualify for redundancy payments.
I stated in the Dáil that I had some sympathy with the position of workers who leave existing jobs to take up other employment when they feel the jobs they are already working in are in jeopardy and that redundancy may be around the corner. I stated that a proposal of that kind would be wide open to abuse because workers who voluntarily left employment, for any reason, could tend to argue that they left due to the uncertainty of their existing employment. I do not think we should take the risk of leaving it open to that kind of abuse. I also held that it would create greater difficulties for management and it would lead to innumerable appeals generally. Although it might help in the small number of hard luck cases, any advantages that would be derived from such a provision would be outweighed by the problems which it would cause. I indicated, therefore, that I could not accept the proposal.
The two parts of amendment No. 9 are different in certain respects but I consider that they are open to the same main objection. I do not think it is necessary for me to go into the precise points of difference. The two proposals, briefly, contained an amendment that in two different sorts of situations in which employees terminate their contracts of employment the provision of section 10 of the 1967 Act would apply. From my examination of the matter, I am satisfied that these proposals are both inappropriate and unnecessary.
As I have already said, section 10 comes into operation only where an employer first of all serves a notice of proposed dismissal on an employee and the employee wants to anticipate the expiry of that notice. The type of situation to which the amendment seeks to apply section 10 is completely different. It is concerned with cases where employees themselves are taking the initiative. They realise what is involved. The question of the legislation is very complex but I am afraid that the amendment makes no sense and I must, very definitely, reject the amendment in this case.
Amendment, by leave, withdrawn.
Amendment No. 9 not moved.
Section 5 agreed to.
I move amendment No. 10:
To add to the section the following new subsections:
"( ) Where an employee is or was employed by a sub-contractor who (under contract or otherwise) is liable to another person (in this section referred to as the principal) and that employee is subsequently employed by the principal, the employee's continuity of employment shall have effect as if the sub-contractor and the principal were the same person.
‘Contract' includes a contract or arrangement—
(a) to carry out work or operations of any kind,
(b) to be answerable for the carrying out of such operations by others, whether under sub-contract to him or under other arrangements made, or to be made by him, or
(c) to furnish his own labour or the labour of others in the carrying out of such operations.
( ) Where before, on or after 1st January, 1968, an employee was employed by a company which was wound up, liquidated, sold or otherwise ceased business or ceased to employ the employee, and the owner, or a director, or a person who had a controlling interest in that company, dismissed an employee in circumstances of redundancy and within 52 weeks renews the employee's contract of employment or re-engages the employee under a similar or new contract with another company of which he is the owner, director or has a controlling interest, the employment of that employee shall be deemed to have been continuous.
( ) Payment (if any) to employees affected by this section who were dismissed by reason of redundancy before the commencement of this Act shall be made from the Redundancy Fund."
This amendment is similar to one introduced in the Dáil. From reading the Minister's reply in the Dáil, it seems that he is very concerned about the transfer of the liability of one employer to pay redundancy to another employer. Of course we on this side of the House are far more concerned with the worker's right to maintain his continuity of employment. To meet this point about the transfer, we put in an addendum that all the payments would be paid out of the fund. I read the Dáil debate very carefully and I can see the Minister's objections on this point and his problems about it. There is a lot of sub-contracting going on, particularly in the building industry, and it might be very difficult for some of these people to work up the required continuity of service as specified in the Act.
The Senator has made the arguments for and against this amendment. I indicated in the Dáil that I could not accept the proposals in the first part of the amendment. I gave a number of reasons for that viewpoint. It was mainly because it would be unfair to compel employers legally to assume liabilities towards employers or subcontractors over whom they had no control. Such employees are already safeguarded in the 1967 Act. I have examined this matter again and I am still convinced that it would not be reasonable. We must have regard for the employers and it would not be fair to saddle them with responsibilities for circumstances over which they have no control.
In the debate in the Dáil on what is now the second part of amendment No. 10, I indicated that I was opposed to the amendment on a number of grounds. Apart from the serious implications which acceptance of the amendment would have for employers, the amendment was objectonable in principle for two reasons. Firstly, it was objectionable because it would be contrary to the concept of limited liability which is basic to company law and, secondly, because it would impose liabilities with retrospective effect. This question of retrospection has reared its head again.
The other more definite point which I tried to develop in the Dáil was that it could penalise good employers who seek to do the best they can by their employees who lose their jobs; they may try to help them by placing them elsewhere. I am convinced that this part of the amendment would do more harm than good and I am afraid I cannot accept it.
Amendment, by leave, withdrawn.
Section 6 agreed to.
Section 7 agreed to.
I move amendment No. 11:
In page 4, line 3 after "because" to insert—
"(a) he had less than 208 weeks continuous employment but had not less than 104 weeks continuous employment (on the date of dismissal or termination of of employment after 21st January, 1971), or (b)"
and in line 12 after "diminish" to add—
"or as if ‘104 weeks' had been enacted in section 7 (5) of the Principal Act instead of ‘208 weeks'."
I am afraid I can anticipate too clearly the Minister's reply on this, but I should like to hear it.
We have an understanding about this. Amendment No. 11 is the first real amendment dealing with retrospection. It provides for two specific categories of persons who should receive redundancy compensation retrospectively—firstly, persons dismissed for redundancy on or after 22nd January, the date the Bill was circulated and, secondly, persons dismissed for redundancy on or after 1st January, 1968, the date on which the Principal Act came into effect. I am not going to reiterate this argument about retrospection, but I said I would re-examine the costings and would look at the whole question of the possibility of any measure of retrospection which I opposed completely since this Bill was introduced. The Senator will have an opportunity of discussing it on Report Stage.
Amendment, by leave, withdrawn.
It is suggested that amendments Nos. 12, 18, 19 and 23 might be taken together. Because of the nature of amendments Nos. 18 and 19 they must be taken together, in any case. It is a matter for the House to decide whether Nos. 12 and 23 will be joined with them.
I move amendment No. 12:
To add to the section the following new subsections:—
"( ) Where a contributing employee is or was dismissed for reasons of redundancy between 21st January, 1971, and the commencement of this Act and he was not entitled to the appropriate amount of redundancy payment calculated under this Act solely because this Act was not in operation, the Tribunal may pay to that employee out of the Redundancy Fund a sum equal in amount to the sum to which he would have been entitled if the Act had commenced on 22nd January, 1971.
( ) Each rate of contribution prescribed by or under section 28 of the Principal Act is hereby increased by 1p as and from the date of the next variation on contribution under the Social Welfare Acts to the date of the next following variations, for the purpose of defraying the cost of operating this section."
These all give rise to retrospection, and in view of what the Minister has just said we do not intend to have any long debate on it. The real reason for these amendments, both in the other House and here, is that we feel there has been this problem about the employer knowing the rules and being able to operate them to his benefit, whereas the employees are not in a position to do that.
We put in a proposal—I am not too sure which amendment it is—to try to meet the extra cost. I cannot find it at the moment. It is in there somewhere. We propose a temporary increase in the contribution of one penny from now until the next time the Social Welfare Acts would be altered. This was an effort to meet the Minister's point of view. In view of what the Minister said about having a close look at the costings of the operation of retrospection, we do not wish to press the amendment.
What I am seeking to do in amendment No. 19 is to have the improvements which the Minister proposes brought into operation as and from the 2nd June, 1971, that is the day the Bill was passed by the Dáil. As I am seeking to make the benefits operative from that date, I think it is only logical that I should make the provisions regarding rebates operative from the same date. I know the Minister has not been anxious to make this Bill retrospective. I do not think, however, that bringing the provisions regarding improvements and rebates into operation from the day the Bill went through the Dáil could be classified as retrospective.
I am leaving it open to the Minister to bring the rest of the Act into operation on whatever day he wishes to decide. There are a number of people who are very anxious about this aspect of the Bill. It has also been suggested that some employers may have sought to "jump the gun" in regard to the improved benefits. I do not know whether this is so or not, but I do know that a number of people are vitally concerned in these increased benefits being made available from the day the Bill left Dáil Éireann.
It is very difficult to have to try and explain to them that it is still not law until it goes through the Seanad. Therefore, I would urge the Minister to accept this amendment.
It is hardly necessary for one to say more on retrospection. What I said already applies to all of them. I did not intend to say anything further. It was a very clever effort on the part of Senator Farrell to think that there is no retrospection but to say that many people thought that legislation need not go to the Seanad is certainly denigrating the importance of this Chamber. However, much of what was said may have boosted up the argument the Senator was making in favour of his amendment. It was a fairly subtle effort. However, I cannot accept that it would not be retrospection to go back to the date when the Bill passed through the Dáil.
As I have already said, I will have a look at this matter again. The question of imposing an additional penny suggested by Senator Owens is one of the matters about which I am not too enthusiastic either. I am not too clear whether the Senator intends the penny to be payable by both employer and employee. If so, it would be two new pennies per week, and that would be quite an addition.
Amendment, by leave, withdrawn.
Section 8 agreed to.
Section 9 agreed to.
I move amendment No. 13:
To add to the section the following new paragraph:
(i) by reason of his employer's conduct an employee terminates his contract of employment in circumstances of uncertainty in which it is reasonable for the employee to anticipate dismissal for redundancy (whether or not he has received notice of dismissal or protective notice of dismissal or lay-off) or
(ii) if it is reasonable for the employee to expect that his remaining in the employment would seriously prejudice his prospects of obtaining suitable alternative employment which became available and was unlikely to remain vacant,
and the employee has received an offer in writing from the employer and on a reference to the Tribunal it appears to the Tribunal, having regard both to the reasons for which the employee sought or seeks to leave the employment and those for which the employer requires him to continue in it, to be just and equitable that the employee should receive the whole or part of a redundancy payment, the Tribunal may determine that there shall be paid to the employee—
(a) the whole of the redundancy payment to which the employee would have been entitled to, or
(b) such part of that redundancy payment as the Tribunal thinks fit."
In this amendment we are trying to provide for two different sets of circumstances. The first one is the case of an employee who terminates his employment because of the conduct or attitude of his employer. We want to ensure that his case is reasonably examined. The second case is in respect of an employee who feels that by remaining in the particular employment he will jeopardise his chances of securing better alternative employment.
We simply ask that the tribunal should be given greater scope to deal with cases of this kind. This is all that the amendment seeks.
The Minister referred to this amendment when we were discussing amendment No. 8. Basically it is a matter of trying to get fair play. I am not in any way putting any sort of bad connotation on an employer's conduct. The main trouble is that the employer is in a better position to know how his business is going. He very often would not be in a position, for very good business reasons, to tell his workers that he could foresee redundancy. This might be rather suddenly sprung on the employee.
As the Minister knows, there is a similar provision in the North of Ireland. It would give discretionary power and we feel it would give fair play in the matter of redundancy payments.
It is much the same case, as was mentioned when dealing with section 8, of persons leaving their jobs voluntarily. I sympathise with persons who leave jobs voluntarily and by doing so lose their right to redundancy payments. I could not accept the Dáil amendment, so I am afraid I must oppose this one also for the reasons I have already stated when discussing section 8.
The inclusion in the legislation of provision to allow workers leave their jobs because of doubts as to whether these jobs will continue to be available and to get redundancy compensation would lead to a situation in which workers who decided to change jobs for any reason would be encouraged to claim redundancy payments. They could always make the argument that they had good grounds for leaving. That is one of the reasons but there are a number of reasons why I think this is not an acceptable amendment.
I have no doubt whatever that it would help in cases where there is some inequity, and where a person would genuinely leave employment and by doing so lose the right to redundancy which he has built up. There are many reasons against this amendment. I do not like the principle of partial payment or imposing on the tribunal the problem of deciding on partial payments. We have tried to resist that. In the drafting of the legislation we should provide for payments only to persons who are qualified.
Both sides contribute in this and I think that things are a little bit loaded against the employee in this particular matter. We thought that this would be a good amendment to try and achieve a balance.
The Minister seems to be reluctant to extend the powers of the tribunal in any way. This has come through in what the Minister has said. The tribunal is fairly well-balanced. We feel that the tribunal should probably be given this discretionary power.
I understand there could be objections to the question of the partial payments too, but again it was to give the tribunal more discretion in their powers.
Amendment, by leave, withdrawn.
I move amendment No. 14:
To add to the section the following new paragraph:—
"(e) If an employee has given a notice under section 12 of the Principal Act, and the employer did not offer the period of employment in section 13 of that Act, and it appears to the Tribunal that the employee was laid-off wholly or mainly for the reasons specified in section 11 of that Act, it shall be presumed that the employee was dismissed."
This is quite a problem, in fact, and I am not too sure how best to explain it to the House. Section 12 was amended. This is the time limits. Basically what is behind this is that we want to prevent many notices becoming dismissals. We have this problem that if an employer—and I am not saying that there are many who would do this— gives a lay-off notice and the employee notifies him of his intention to claim redundancy, the employer could very rapidly fill that vacancy and then say it was not because of redundancy because of lay-off but that the employee was dismissed. I am not saying that this in fact has happened but it is a loophole we thought we might tighten up.
I can see what the Senator is seeking to achieve by this amendment, but I am afraid the number of cases likely to arise that require the protection of this amendment are so few that it is hardly worth considering.
As against that, I maintain that as long as one person is likely to be adversely affected it would be worth considering, so perhaps the Minister would have a look at it between now and the Report Stage. I am not saying that this is the solution to it but it is an attempt.
Yes. I will have a look at it.
Amendment, by leave, withdrawn.
Business suspended at 1.10 p.m. and resumed at 2.30 p.m.
I move amendment No. 15:
To add to the section the following new paragraph:—
"(f) If a notice given to an employee for the purposes of section 11 of the Principal Act, is not a written notice or if in the opinion of the Tribunal the notice does not clearly state that the interruption is of a temporary nature, it shall be presumed that the employee was dismissed."
This amendment is designed to cover the point that written notice is not necessarily required under section 11 of the Principal Act. Even if it is given, as often happens, the written notice may be of such a vague nature that it is not quite clear whether the interruption is of a temporary nature. Following on from what we spoke about in previous subsections, this amendment is designed to give the tribunal the right to presume that the employee was, in fact, dismissed.
The amendment seeks to provide that if a notice of lay-off is not in writing, or if in the opinion of the Redundancy Appeals Tribunal the notice does not clearly state that the interruption was of a temporary nature, it may be presumed that the employee was dismissed. The amendment tries to achieve, in an indirect way, the objective of amendments which were debated at length in the Dáil and which I rejected. The main stand I took against the question of making it obligatory to have notices in writing was that, while any good employer and any well-established firm would, of necessity, give notice in writing it would of necessity place an unrealistic obligation on small employers and employers in industries in which casual employment was a feature, always to give written notice. This would be imposing something that might not be easily complied with. It is not desirable to press it against that background. In the concerns where it would be most likely to be of importance, the employers in their own interests, would give notices in writing anyhow. If small, casual employers who tend to take on people frequently had imposed on them a legal obligation of giving notice in writing it would not be practicable. That is why I opposed a similar amendment in the Dáil.
I was aware of the Minister's opposition to a similar amendment in the Dáil. It is because these small-time, casual employers exist that the amendment is necessary. Very often such employers employ one or two people and it is not made clear to the worker concerned what the dismissal means. We did not specify that the notice had to indicate what is involved. We just wanted it left to the tribunal to judge the merits of what was said at the time of the lay-off as to whether the lay-off would be of a temporary nature.
It is quite reasonable that anybody who is being dismissed should be told clearly whether the dismissal is of a temporary nature. There should be no vagueness about it. I do not accept the point that it would be putting a big imposition on employers, even those who employ in a small way, to make it quite clear what way they are treating their employees.
The Bill contains such a variety of safeguards for employees that this is not necessary. Another point to be considered is that the amendment as worded would deprive the employer of all his rights once it was proved that he had failed to give notice in writing. He would have no further right to contest any points which he might wish to raise.
During the course of this discussion nobody, so far as I can recollect, spoke for the employers. I do not propose to do so, but I do hope that in this particular respect the Minister is not inadvertantly minister-preting the attitude of employers. Most good employers would wish to see small employers—and particularly bad employers, who represent a small minority of the total number of employers—having to observe the law.
I am not misinterpreting, but I cannot fail to notice a lack of representation from employers in the debate.
I should like to say a word on behalf of that downtrodden section of the community, the small employer. I fail to see why he should have to give notice in writing. If he were taking on people on a casual basis why should he have to give them notice in writing to the effect that their services were about to be discontinued? There are many employers who take on seasonal workers; a number of people get temporary employment, and it would be enforcing an undue strain on the employers to give written notice. If employers are just— and most of them are—they give adequate notice. It is necessary to tell the employee in question when you are dismissing him, why you are doing so and when the dismissal will take effect, and I do not see any reason for written notice.
The Minister mentioned small employers not giving notice and not expecting them to give notice. I can give many instances of big employers who do not give notice in writing. For example, I have in mind county council workers, Board of Works employees, forestry workers, and Land Commission workers. Is notice given to those people, who are temporarily employed or perhaps semi-permanently employed? Those workers are working for large organisations and there is a good reason for their receiving notice in writing, which they do not get at the moment, as far as I am aware.
I have said all I can say about it.
About the category of workers to which I have referred?
I am not sure. I think there is a prescribed form for forestry workers which is filled up when they get notice. In the case of county council employees, all of them, with the exception of casuals, get notice in writing.
I cannot agree with that. The amendment should be accepted, in view of the position of employees of State bodies and local authorities. I have never known them to get notice in writing.
Amendment, by leave, withdrawn.
I move amendment No. 16:
To add to the section the following new paragraph:
"(g) Where section 8 of the Principal Act applies, an employee dismissed for reasons of redundancy (on or after 1st January, 1968) who is or was not given a notice of dismissal in the form prescribed under section 17 of that Act shall be deemed to have been laid-off."
This also deals with the giving of notice. When drafting it, we had in mind the seasonal worker, who is very often given very vague notice. Generally, he is told that he is dismissed, and he does not really know what is involved. This is why we put down this amendment, which deals with section 8 of the Principal Act.
I presume that 1st January, 1968, would be covered by the Minister's previous remarks on the question of retrospection. However, if we thought that the Minister was, in principle, in favour of this, we could redraft it and put an amendment on Report Stage.
Quite candidly, I took this amendment as a kind of device to work in retrospection. I would put it in the same category as other amendments seeking retrospection, and in that case I am opposed to it.
Is that the retrospective element? If it is solely the retrospective element which is concerning the Minister—I know from his previous remarks how he feels about retrospection —we could redraft and submit it on Report Stage. Otherwise, there is no point in putting it down again for Report Stage and delaying proceedings.
Amendment, by leave, withdrawn.
Section 10 agreed to.
Section 11 agreed to.
I move amendment No. 17:
In page 5, line 28, after "employment" to insert—
"or such longer period as the Tribunal may consider reasonable if the employer failed or neglected to give the employee the written notice of dismissal for redundancy under section 17."
This again is to give the tribunal more discretion in deciding the time limit involved. From my recollection, the Principal Act gives 52 weeks, and this Bill amends it to a further 52 weeks. When the employer neglects to give notice we feel that the time limit might be "a reasonable time" and the question of what is a reasonable period should be decided by the tribunal. The statute of limitation is normally six years and that would be a reasonable time. It somewhat extends the period in which claims can be made and this is the intention, where an employer has been negligent.
As Senator Owens points out, section 12 gives the right to the tribunal to extend the period during which an application for redundancy payment can be made up to 104 weeks. This amendment seeks to extend that period even further in certain circumstances.
I should like to draw the Minister's attention to possible cases of hardship in this particular section. A period of 104 weeks is quite a long time. I can visualise that within that period much distress and hardship could be occasioned to, say, a small employer or a farmer, where possibly a deceased's estate was involved. It might cause considerable difficulties if the full period of 104 weeks was extended by the tribunal, unless some consideration was given to the circumstances of the employer, in this case. If it was a deceased's estate, such as a farm or a small shop, where a widow and her family were involved, the estate could not be wound up or probate taken out until all factors concerning the estate were finalised. A possible pending claim for redundancy payment could be one of these factors. It would apply equally in the case of a liquidation, where a liquidator would be unable to wind up an estate or a business, until such time as every contingency had been provided for. I could see that in either of these cases —particularly in that of the small shop or small farm—there might be hardship involved. Perhaps the Minister could make a provision somewhere in this section for special consideration involving hardship that would be considered by the tribunal and taken into consideration, when deciding the length of the period.
The original time limit set out in the Principal Act, in which a person could lodge a claim for a lump sum is 30 weeks. The experience of the working of the Act did not bring about very many cases or highlight any circumstance in which this limit was held to be inadequate. However, it did show there was some justification, for an extension of the period. The extension proposed in the Bill is rather generous. The former 30 weeks now becomes 52. If the tribunal so rules it may be as much as 104 weeks. The provision for appeals or claims cannot remain interminably. There must be some termination or some defined period in which appeals may be made. In my view 104 weeks is ample time. I would not consider abolishing the time limit, as the amendment proposes. I do not think there is anybody who is so ignorant of his rights as not to have found out within that time that he had a certain right to make a claim.
Would the Minister like to comment on the point I made?
I do not think the point Senator Russell made is really a valid one. It referred to liquidations and cases of possible intestacies where there are transfers of businesses taking place or administration going through. There could not be a statutory provision in regard to redundancy in that event, because nobody could be aware of whether or not there might have been a redundancy claim. I could not visualise the time limit affecting the type of case Senator Russell had in mind.
I think it is true to say that it could happen.
A claim not made for redundancy is an intangible thing, something which is non-existent. To prove that there was no claim made and that there would not be any claim made within a time limit, where there was a case of probate, would not be possible. It is quite a different thing to clear the income tax with the tax office. It is easy to find out whether all tax against the estate has been met. Other things have to be cleared before these probate cases are finalised. I could not see how the fact that redundancy might be claimed could be brought in.
I am inclined to have more faith in the tribunal than the Minister has. The longer period which the tribunal has considered reasonable seems reasonable to me, too. If the employer fails or neglects to give notice to an employee under section 17, this amendment would give the employee a balancing effect. It is reasonable that the tribunal should have the power to extend the period further than 104 weeks. I accept that the 104 weeks is quite a considerable improvement. In a particular hardship case that could arise the tribunal could consider 106 weeks as being reasonable in a particular circumstance.
This is a matter of "horse trading" and I think I have come up with a fair period. I think it is sufficiently generous.
Amendment, by leave, withdrawn.
Question proposed: "That section 12 stand part of the Bill".
On section 12, I want to say something for the record before the section is passed. It appears that the section of the Bill as it stands at present might have the effect of permitting to be revived redundancy appeals to the tribunal which had already been rejected as not having complied with the time limit provisions of section 24 of the 1967 Act. It is possible that it could have that effect at the present time. I would not wish it to be so, however much the Senators who have proposed this amendment might agree with it. I want to give notice that I intend on Report Stage to bring in an amendment or to have the section so worded as to ensure that it will not permit the revival of cases that have been brought up in the past.
Even if injustices have been done in the past they cannot be undone under this section? The Minister will copperfasten this section?
It would be wrong to re-open cases that are closed.
Even if injustices were done in the cases that are closed?
Who am I to say that injustice has been done if the tribunal have given a decision?
There might be people throughout the State who feel and believe that an injustice has been done.
If cases were rejected on the grounds of the time limit it is possible that they could be revived as the wording of the section stands at the moment. I would not wish that to happen. It would only create a lot of anomalies.
Question put and agreed to.
Question proposed: "That section 13 stand part of the Bill."
Section 13 quite rightly makes provisions for improved payments and benefits to the employee. Would the Minister be prepared to make some improvement in the rebates payable to the employer? Under the Act as it stands the employer may, in certain circumstances, earn a rebate up to 65 per cent which is an extra 15 per cent in addition to the 50 per cent that he would earn if he gives a two-week notice of dismissal to an employee and sends a copy of the notice to the Department. If the employer gives notice up to eight weeks' rebate is increased to 65 per cent. Would the Minister be prepared to consider extending that 2½ per cent per week so as to encourage an employer to give longer notice of dismissal, particularly in cases where a business or an industry was obviously going to cease operation in the reasonably near future?
I referred to this point on the Second Stage of the Bill. Within the last couple of years some very substantial industries have shut down quite quickly. the maximum notice required under the 1967 Act was given to the employee. If the employer could have got a greater rebate under the redundancy scheme it would have encouraged him to give longer notice and given the employees concerned a better opportunity of securing alternative employment. I should like if the Minister would consider doing that. I believe it would help the conscientious employer who saw, due to changes in circumstances —possibly changes in technology or improvements or advances in his type of business—that he would have to close, so that he would be encouraged to make the earliest possible provision for his staff by giving them the longest possible notice thereby giving them an opportunity of securing alternative employment.
One of the purposes of section 13 is to give the employer additional rebate for holding on to employees after the termination of the original dismissal notice. This is something we consider useful as it gives our manpower service a chance to place the employees in other employment. Therefore, the employer's position when he continues to hold on his employees after the terminal date which he has notified for their dismissal is being clarified. The employer can get a rebate of as high as 70 per cent of the lump sum depending on the length of notice he gives or the length of time he retains them after the notice expires.
I know this is not the first time the case has been made on behalf of employers to have the rebate improved. But if the employers were not seen to have to pay something out of their own pockets their views on redundancy might be quite different. One of the principles in this Bill, as in the original Act, is that the employer would have to pay something out of his own pocket; therefore we could not concede that it should be made easier for him in any way to render people redundant. This is one of the compelling features of the Bill, namely, to ensure that the employer will take a serious view of this whole matter of redundancy. If he were to be relieved entirely or to a great extent of the payment of the lump sum, he might be likely to take a lighter view of making people redundant. This would operate to defeat the whole original intention of the redundancy legislation.
I was arguing from a different premise, that of trying to encourage the good employer whose industry has no future and who wants to give the maximum possible notice to his employee. The mere fact of doing that and continuing them in employment places a severe strain on that employer. What I was doing was seeking to encourage that type of employer.
This might not be the opportune time to do it, but the Minister might accept the case I am making. I accept the reply he has given. I think it would be accepted in principle that everything possible should be done to assist both the employee who is going to lose his employment and the good employer who at cost to himself is prepared to give the longest possible benefit to his employee.
I understand the Senator's point clearly. The Senator may not be aware that there already is an incentive in the Bill for employers to give longer notice. Basically, the amount of rebate to employers in respect of the lump sum is 50 per cent. Our legislation differs from the British legislation in as much as it provides for an increased rebate if the employer gives longer notice of dismissal. In the British legislation the percentage rebate is a fixed figure and there is no incentive for longer notice. We have such an incentive. The rebate may go up to as much as 70 per cent depending on the length of the notice. Senator Russell has asked me to go further than that, but I am afraid I cannot do so.
Under Section 29 of the 1967 Act if an employer gives eight weeks notice to his employee or employees he is entitled to a rebate of 65 per cent. If he does that and one or more of his employees is offered employment within the period of eight weeks and leaves, the employer loses the 65 per cent. If he leaves just two weeks after getting notice the maximum levy the employer can get is 50 per cent, although he has facilitated his employee by allowing him to take up a new job. He has also saved the Minister's placement service the necessity and presumably the cost of securing alternative employment for the employee concerned. I suggest the rebate should date from the date of the notice of dismissal and not from the date on which the employee actually left the firm, if it can be established that the man left to take up other employment and that the employer in the interests of his employee facilitated him by releasing him from his employment.
I take the point but I think it is sufficiently covered. I have to have regard to the abuses that could arise if one section got more attractive benefits or incentives than the other. This is something that could be subject to abuse. Having had experience of the working of the Act and the type of case coming before the Tribunal, I do not think the case referred to by Senator Russell is a problem.
Whether he accepts there is merit in the point or not— and I think he accepts there is some merit in it—the Minister is I believe being influenced by the fact that abuses could take place if he amended the Bill to provide for the situation I have outlined. I do not think the Minister in any section of the Act should be conditioned too much by the question of abuse. I should like to make a point on behalf of employers—it is one that Senator Kennedy made himself earlier —and that is that the bulk of employers are decent, christian minded men. That should go on the record of the House. Obviously, there are black sheep in the employers' fold, as there are in every other section of our society. But we should do everything we can to help the good employer who genuinely seeks to assist his employee. I would suggest to the Minister that the number of abuses that might arise because of an alteration such as I have outlined would be far outweighed by the number of cases in which the good employers genuinely sought to assist their employees. I hope the Minister will take cognisance of the points I have made before we come to the Report Stage. It would be an encouragement to the general body of good employers.
I will give the Senator an assurance that I will look at it again before Report Stage, but it is something that we have already examined very closely and the consensus of agreement was not to make any change. However, I will look at it.
On Second Stage I referred to what I accept to be a certain lack of flexibility in the redundancy code and its operation. I took as an example a case that had come to my notice—of course, of necessity I only have the facts of this case at second hand and accordingly I cannot guarantee that they are accurate in every detail—concerned with the question of the payment of rebates and the amount of rebates which have to be paid. I instanced the case of a small employer who had, to his credit, ensured that people employed with him for a long number of years would not suffer any break of employment in so far as he arranged for alternative employment for them. The position in this regard is that, while there had been a change of employment there had been no loss of job; there had been the loss of accumulated service and the redundancy code applies.
In replying at the end of a Second Stage the Minister indicated that he did not quite grasp what was involved in this case. This arose from the fact that the Minister misunderstood the defect in the proceedings. The Minister took me up as saying that this particular individual did not inform his employees. As I understand it, in this case the employer who had acted as a most humane employer failed to notify the Department of Labour. It was the failure to notify the Department of Labour that resulted in this employer, who had acted so creditably, not being entitled to benefit in any way under the Act.
While not wishing to encourage anybody under this section or any other section of this Bill or under the Principal Act not to carry out the procedures, just as there are employees whom we must protect, there are also employers whom we must protect. What I was urging then and would urge again in regard to the provisions of this and other sections of this Bill is that there should be a certain residual discretion in the tribunal, that a mere defect of form which has done no harm to anybody, except perhaps caused some inconvenience to some of the Minister's officials, should not be something which would result in a loss of benefit either to an employee or a human employer.
This was the net case, and I wish to clear up this misunderstanding. As I understand it, under this section and other sections of this Bill what can be called a defective form—indeed, failure to supply a particular form to the Minister's Department—can result in a loss for somebody who has acted beyond what the Minister expects of an employer under this code in conditions of redundancy.
I may not at the time have grasped the Senator's point on Second Reading that he was referting to notice to the Department rather than to the employee. Since then I have had regard to what he said. It is not a case where any provision should be made. In the unlikely event of hardship being caused of the type mentioned by Senator Dooge, I do not think it would justify our taking special measures in this Bill when we consider the importance which we attach to being notified under section 17. It is most important that if our manpower services is going to be alert and alive to the duties of replacing people we must get a minimum of two weeks' notice, as provided in section 17.
If we made provision to cover the unusual type of case with which this exceptionally good employer was faced, when having done everything for his employees, he forgot to notify the Department in time, if we made the necessary provision in the Bill to provide for that exceptional type of employer, we might be leaving a loophole for so many others who would not bother giving the necessary notice.
The possibility of such abuse is what I think outweighs the merits of the case which Senator Dooge has made with regard to notice to the Department under section 17 of the Act. I do not think he will press it when he takes into consideration the importance we attach to getting due notice of pending redundancies.
I am grateful that the Minister acknowledges that there is a case of hardship here. What he has done is to attempt to hold a balance between the hardship to the individual, who, after all, in this case is having his own business fold up under him, and the general good of having proper information for the manpower service. The Minister or anyone else in this House who has listened to me talking from time to time in regard to the manpower services will know that I have advocated these services and their improvement down through the years. Nevertheless, I do not think the problem is quite as difficult as the Minister indicates, because what we are concerned with here is not a notification that there is unemployment, but a notification that there is no need for the manpower service to come into action. It is not just a notification that certain persons are to be redundant and are seeking work, but a notice that some people are redundant in the sense that they have lost continuity of service but in fact they have not lost continuity of employment.
This narrows the whole issue very considerably. Where a person failed to notify the Department that certain people were redundant and would be coming on the labour market, here the balance would probably go in the Minister's favour. But would it be possible to draw up an amendment to cover the case where there was a defect in regard to a notice, where there was continuity of employment but a change of employment? I am not asking that such notices should be regarded as unnecessary; all I am asking is that discretion be left to the tribunal that where there are special cases of hardship, something might be done.
I would ask the Minister to look at it in this very narrow sense between now and the Report Stage. I would expect that the tribunal in this instance would not exercise that discretion in favour of a large organisation. If a large organisation, due perhaps to the very complexity of its organisation, fail to send in a notice, let that be on their own heads. I am thinking here of the small man, the man who worked alongside those five or six employees whom he was not letting go. He was not a boss to them in the sense of the larger employer. They were men who worked beside him. At the folding up of this business they were losing something but they were getting continuity of employment. The employer was also losing a great deal. In this narrow sense of the small organisation which, as the Minister knows only too well from every aspect of the work of his Department, creates its own special problems. In this regard we are dealing only with a small organisation, the case where there is redundancy only in the technical sense, because that is what we are concerned with here.
We are not concerned with somebody coming on to the labour market. We are concerned with somebody who is redundant without being unemployed. I would ask the Minister to look at it in this very narrow sense to see if perhaps something might not be done here, not to introduce an amendment which would exempt such persons from the necessity but would give a narrow discretion to the tribunal in regard to such cases.
Could I just say a word in support of Senator Dooge's case? Most of the cases he probably has in mind, and certainly that I would have in mind, would be elderly men, say small contractors and those giving up business before they were forced to give up business on the grounds of either age or ill health; they had done everything possible to make provision for the men who worked alongside them rather than for them.
I do appreciate, and I have said this already when speaking on other questions, the fact that he is bound to do everything he possibly can to avoid abuses. I think we should all share his anxiety in that regard. Again, I would emphasise that concurrently with that the Minister should do all he can to support the good employer and to ensure that employers who are not so good have more regard for the future of their employees. It is possible that the type of employer Senator Dooge has suggested might give the requisite notice of dismissal to his employees, find them alternative employment and then, due to death or sudden illness, might not comply with the section regarding notice to the Minister's Department. Is that provided for anywhere in the Bill? Or is that another case, such as Senator Dooge has outlined, in which the employer or the employer's estate, would be at the loss?
What may have escaped the Senators who have spoken on the matter of the person who forgets to give notice—and I think Senator Dooge may not have adverted to it on the occasion of the Second Reading debate—is that an employer cannot be deprived of getting some rebate of the lump sum. What he loses is the amount he would have got by way of a bonus if he had given longer notice. Even the man who failed to give notice would still get a rebate. Section 13, subsection (3) says:
Notwithstanding subsection (1), whenever an employer fails to comply with any provision of section 17, the Minister may, at his discretion—
(a) in the case of a lump sum falling within subsection (1) (a) reduce the amount of rebate payable in respect of that lump sum; provided that the amount of the rebate when so reduced shall not in any case be less than 45 per cent of the said lump sum, and
(b) in the case of a lump sum falling within subsection (1) (b), reduce the amount of rebate payable in respect of that portion of the lump sum referred to in subsection (1) (b) (i); provided that the amount of the rebate when so reduced shall not in any case be less than 45 per cent of the said portion of the lump sum.
I do not think there is one case on record where the Minister has reduced the rebate. The basic amount of rebate was 50 per cent and the Minister takes power under that subsection to reduce it. The fundamental thing here is that the type of employer to whom Senator Dooge refers would still be entitled to some rebate, so that narrows down further the necessity of making special provision for the type of case he has made. It is only the incentive amount which is in question.
An extra 15 or 20 per cent.
Yes. It could be almost 20 per cent.
This is one of the difficulties of discussing such matters in committee of the House rather than in special committee. The information given to me in regard to this is that there was more than the additional rebate involved in this case. I was surprised to be informed of this because my understanding was somewhat the same as the Minister's. It was pointed out to me that this person did not receive even the normal rebate. If the Minister likes I could arrange to have the details of the case made available to him——
——so that he could look at it between now and Report Stage.
On the Second Stage of the Bill I suggested that, where there was a pension scheme in a firm and where an employee left by reason of redundancy, the employers' share of the pension contribution should be set off against the redundancy payment for which the employer would be liable.
The Minister, in replying to the debate, just made a brief reference to the following point he made in column 467, volume 70, of the Seanad Debates of 17th June, 1971:
The only thing I have to say about pension schemes is that redundancy relates to persons rendered redundant in their jobs due to no fault of their own and not to persons who leave jobs at normal retirement age.
Let me quote an example of a situation that could arise. If an employee retires from his firm at the age of 65, in accordance with the terms of the pension scheme, at a time when a redundancy situation exists in the firm, in other words when say, a number of temporary employees taken on for seasonal work during the summer or during Christmas are leaving. If this employee, having reached 65 years, retires on pension from the firm he is then entitled to apply also for redundancy payment. In the light of what the Minister has just said to Senator Dooge, the employer can recoup a maximum of only 50 per cent, because his employee, retiring at the normal retiring age, would not receive notice of dismissal, because he would be retiring on pension. I hope I have my facts right in that case, and if they are, the employer has a good case for a set-off of his pension scheme contributions against the redundancy payment which, apparently, he would be liable for as the Bill stands.
The only provision with regard to offsetting amounts payable in respect of retirement pension against lump sum entitlements provides that this may be done by agreement between employer and employee. This is the only way in which there may be off setting arrangements. It is not conceded that retirement pension or contributions paid in respect of a pension scheme have any relation to redundancy nor should they be used to off-set the lump sum payable in the case of redundancy. It must be accepted that if a man, either by his labour or by his contributions, or both, has earned the right to a retirement allowance, this should not be taken as something that can be used to offset another payment to which, under other legislation, he would be entitled anyhow. I am afraid that we were not able at any stage of our discussions with the FUE to concede this point, and I would be very strongly opposed to using the contributions in the pension fund to offset the lump sum for redundancy. They are two separate matters and, I have already said here today, maybe, perhaps, irrelevantly, that there is a good deal of modern discussion and thinking now about the wisdom of providing occupational pension schemes for workers irrespective of what other retirement pensions they may be entitled to under State legislation or schemes. I would not agree that they should be in any way linked-up, that one should be off-set against the other. They should run concurrently and their provisions should be independent of one another. I could not agree that we should allow an employer to use the contributions to the credit of a potential pensioner in his employment to offset the lump sum payment. I think that is what the Senator has in mind.
Maybe I am mistaken. I was hoping the Minister would tell me if I was right in the imaginary case I cited. I understand that this situation would not arise during a period of normal employment. There are certain times in a year when temporary employees are taken on in some factories. The employee retires sometime during January following the busy period around Christmas and this coincides with a time when, say, 30 or 50 temporary employees are leaving the firm and are entitled to redundancy payment. The only reason he would be entitled to redundancy payment is that he happens to retire in a redundancy situation. If his retirement happened to occur at another period of the year in which there was a general level of employment he would not be entitled to redundancy payment. He would be entitled to his pension from his firm and his unemployment benefit up to the age of 70.
If I am correct in the instance I have given, this situation would only arise where the coincidence arose of the man retiring at a specific time when a number of temporary employees were also leaving.
I know the Minister has resisted strongly any linking of pension schemes with the redundancy scheme. In the British Act that is allowed. I may be wrong, but I got the impression from what the Minister said that there is less enthusiasm for pension schemes in firms. I would strongly disagree with this. I have been associated with these schemes for over 30 years and I think every encouragement should be given to employers to introduce all possible non-contributory schemes, including a death benefit. These are of great help, particularly to young married employees. I hope I misunderstood the Minister in his reply on this when he said there was new thinking. I hope the new thinking is not to discourage pension schemes.
I should like to ask the Minister if I got my facts right in regard to this case, which is not altogether imaginary. It is related to at least one actual case of setting off the pension against the redundancy payment for which the employer could not make any provision because he could not dismiss an employee who was about to retire on pension.
He would have to retire anyway.
I have just said that. The question would not arise in that case if there was no redundancy in the firm but if there happened to be a redundancy situation, the employer would then be bound to pay him redundancy money in addition to the pension. He could not get over it by giving him notice to recoup, say, up to 65 per cent, because he would not give dismissal notice to a man retiring on pension. It is complicated. If I have not got my facts right, perhaps the Minister would say something on that.
I am not too sure that I clearly follow the arguments, but I think the Senator is putting forward the case made in Senator Farrell's amendment No. 5 that a man, even though he is over 70, still should get a lump sum redundancy payment. Or is the Senator arguing that when retirement and redundancy coincide the redundancy should still be payable?
This man I am talking about is not redundant; he is retiring on pension. But because a redundancy situation exists in the firm and other employees are retiring by redundancy, I understand that he must——
It is a question here of whether the hen or the egg came first. If the employee was rendered redundant before he actually retired from the firm he would have a case for redundancy, but if he was retired before redundancy occurred in the firm, then he has retired in the normal way. There is no anomaly there. It is already covered in the Bill. Senator Farrell's amendment was that even though the man was over 70—and he cited some cases in Donegal—if he had 40 years service he should still get the benefit of the redundancy scheme. I could not accept this amendment.
There are two different cases. The point I am making is that this employee is retiring on pension as agreed at 65 years of age. Because there was redundancy in the firm, apart from his case, he automatically comes under the redundancy scheme. The employer is, therefore, liable to make a redundancy payment to the employee, who obviously cannot get a dismissal notice because he is retiring in accordance with the firm's pension scheme.
Senator Russell's point would not arise under the normal pension scheme, because there is a contribution made each year, usually by the employer, which entitles a man to a pension at 65 or a choice of a lump sum plus a pension at 65. Unless he retires, those contributions continue to be made, even if he continues working to the age of 70. He is not being forced out at 65. If you like, he is being encouraged to leave at 65, if he so desires. If he retires at 65 he gets his pension plus his lump sum. If he does not retire at 65 under the ordinary pension scheme, he does not get either the pension or the lump sum until he retires. If he retires at 65, there are more contributions paid into the pension fund and he gets a larger lump sum and a larger retirement benefit. Most people prefer to take the pension and lump sum at 65, but they cannot be compelled to do so. Therefore, either he retires voluntarily or he is forced out on redundancy. There are no two ways about it.
I am sorry, but Senator Nash was not referring to my case at all. He was talking in a general way about pension schemes and I agree completely. I am talking about a man who retired in the normal way but whose retirement coincided with a period of redundancy in the firm. Therefore, he was automatically entitled to claim a redundancy payment, but his firm would not give him a dismissal notice because he was retiring in accordance with the pension scheme.
I understand the point that Senator Russell is making now. It might be a good thing to tease it out a bit further. When you talk about redundancy in a firm, does it mean mass redundancy or redundancy of one, two or three people? How does one adjudicate on this problem of redundancy? Does it occur when two people are let go, or when 100 are let go? A firm employing 15 or 20 people might say: "It would be better to let this man go seeing that we can recoup 60 per cent of the redundancy payments from the Exchequer".
The point I am not clear about in Senator Russell's case is that this man would be retiring anyway. When redundancy is mentioned, it is not clear whether one or ten or more persons are involved. When one says there is redundancy in a firm, what exactly is meant?
Nobody seems to understand my point.
The important point here is that in order to qualify, the man has to prove that he was redundant. It would not be easy for a man to go before an appeals tribunal after he had retired and prove that he was redundant.
From an employer's point of view he has no come-back because the employee was retiring in accordance with the firm's pension scheme. Therefore, the employer could not give him a dismissal notice, and therefore could not recoup.
Taking the broader view of this type of case, the whole purpose of the legislation here is to provide for those who, due to no fault of their own, have had their employment interrupted and have been rendered redundant. You cannot legislate in such a way as to give the benefit of redundancy to men who have reached their normal retirement age and who are benefiting from whatever retirement provisions have been made for them by legislation or otherwise.
That is fair enough, if that is the answer, but I do not think it is.
Question put and agreed to.
Sections 14 to 19, inclusive, agreed to.
Amendments Nos. 18 and 19 not moved.
Question proposed: "That section 20 stand part of the Bill."
When I was speaking to the other amendment this morning, I omitted to mention that there is a reference to the Act coming into operation on the Monday following its passing. Section 20 specifies the actual commencement date specified by the Minister. I am wondering if the Minister can give any indication how soon after the Bill passes this House and the Dáil, he might make it applicable.
I should naturally like the Bill to be brought in as early as possible.
Would the Minister take the suggestion of the Monday after the passing?
No, I would not tie myself down to that. We had an amendment earlier and I was conscious of that being in it. I can assure the Senator that she did not miss anything. I could not accept it. I would have to provide for making the necessary arrangements for the announcement of the commencement date which, in any event, would be as soon as possible after the passing of the legislation.
Question put and agreed to.
I move amendment No. 20:
In pages 10 to 13, in column (i), to insert Reference No. 1 opposite the 1st amendment, and so on to Reference No. 52, at the end of the Schedule.
This is a simple amendment. We put it down to try to make it a little bit easier to follow the Schedule. I have numbered the items 1 to 52 and perhaps the Department would consider adopting this system for reference purposes.
This is a drafting amendment and I shall not delay the House on it. The draftsman has advised us that it is not normal practice to number the amendments in a Schedule to a Bill of this nature. Senators will agree that I have tried to make it as easy as possible for them on Committee Stage by circulating an explanatory document on the amendments in the Schedule.
I accept what the Minister says about that. Because so much of what is relevant in the Bill is in the Schedule, it would be of assistance to people who are actually working on the Bill if the amendments were numbered in the Bill as finally amended. I accept that it is not normal procedure. What is in the Schedule is very important, particularly with reference to the operation of continuous employment, reckonable service, etc. It would facilitate reference if the numbering was accepted.
The handbook which we had in relation to the last Act will be brought up to date in this connection. While it does not purport. to be, nor, indeed, should it be accepted as, a legal interpretation of the Bill, it is a guide. We shall take into account the complexity of the amendments to the Principal Act in bringing out the revised booklet, and it will be found to be an easy guide to the provisions of the Bill, when it becomes an Act.
Amendment, by leave, withdrawn.
I move amendment No. 21:
In page 11 at the reference to Schedule 1 and before the proposed amendments to insert the following:—
"The substitution in paragraph 1 of ‘two-thirds' for ‘50 per cent'."
The purpose of this amendment is to increase the weekly redundancy payment from 50 per cent to two-thirds of the normal weekly wage. In rejecting a similar amendment in the other House and in rejecting amendments calling for increases in the lump sum, the Minister based his rejection on the cost factor. He said that the Redundancy Fund could not bear the cost of implementation of this amendment and other amendments of this kind. I have already spoken today about the purpose of the Redundancy Fund, but I have a little to add to that, and I hope I am in order in so doing. The cost of the implementation of this type of amendment will not affect the Redundancy Fund to any great extent. What will drastically affect the fund will be a substantial increase in the number of redundancies. If there are no redundancies there cannot be any expenditure from the fund, no matter how high the benefits are, whereas even if the benefits are low and there are a huge number of redundancies, the fund will be adversely affected. This brings me back to the figures of redundancies mentioned last week.
The Minister said last week the number of redundancies in the three years of operation of the Principal Act was as follows: 1968—3,863, 1969—3,696 and 1970—3,896. The figures were almost constant. The Minister added that for the five months of this year the number of redundancies was 3,092, in other words, for the first five months of the year the number had increased to almost the figure for the whole of last year. I said at the time that these figures were alarming because with the implication in the increase in respect of the first five months of this year we could expect a figure of more than 7,000 for the whole of this year. The figure could be 10,000 or even more.
Several Members of the House, including myself, asked the Minister on that occasion to give some explanation for this steep increase in the number of redundancies, and also to advise the House of the steps being taken by the Government to arrest this alarming situation but during the debate last week he made no reference to either matter. I do not want to embarrass the Minister, for whom I have very great respect, but it is quite impossible to divorce the question of redundancies from the general economic situation or indeed from the question of Ireland entering or not entering the EEC. We have been told on many occasions by Government spokesmen that as we draw closer to membership of the EEC we get nearer to paradise. We have been told that when we go in we may expect a rapid improvement in all our standards and in every department of life. We have been told that far from having 10,000, 7,000 or 3,000 redundancies every year we will rapidly reach a situation in which there will be far too many jobs for people to fill.
May I remind the Senator that he has taken two steps away from the amendment now? When he stepped away from the increase in rates to the level of redundancy, this was certainly permissible, but to take the further step, even if it is a reluctant step for him, into the EEC is not allowable.
I am sorry. I accept your judgment, of course. May I say in conclusion that I can state with some degree of confidence that if the Minister is unable to accept the amendment as it stands workers generally would be prepared to increase their weekly contributions to the fund in return for an increase in benefits.
This is the first real straightforward attempt in any amendment to improve the benefits in the amending Bill. The Bill itself is already a vast improvement on the Principal Act. It has gone as far as we thought it wise to go. The Senator is now proposing an amendment to provide that a weekly payment instead of being 50 per cent of the pay immediately preceding redundancy should be increased to 66? per cent. This would be a straightforward improvement of the weekly payment provisions in the Bill. I can appreciate that this is what all of us would like to do—to give better provision in the legislation but we have had to accept some criteria with regard to past experience and future expectations. We came up with what we thought was measuring the cloth according to what was available to us.
It is quite all right to talk of propaganda such as the paradise we will have, to use the Senator's own words, on entering the EEC. I have never heard such a rosy picture painted of it before, wherever Senator Kennedy got this particular picture. I have always argued more on the grounds of how we would stand if we did not go in rather than on the paradise we will experience by going in. Winding up the debate in the other House I pointed out that I anticipate greater industrial development and more industrial activity when we become members of the EEC. It has been proved and is accepted by all that the more industrial development and the greater the complexity of industrial development there is, the more mobility we have in employees and the more the need is for redundancy measures. We are often accused of taking our cue from England in matters of legislation and other matters but I never apologise for taking example from the practicalities of other situations. One of the advantages of having something tried out on the dog is to enable one to do better.
The Senator concluded by saying that if necessary we can increase the contribution. That it is always a possibility that if we ever reach the stage where the income to the fund was insufficient to meet the outgoing we would have to increase it but I do not think we should increase it until we reach that stage. I would say to the Senator who is advocating an improvement of 16? per cent on what we are already proposing that I do not think our expectations for the future would justify it and I think we are already providing very generous provision for redundancy cases. It should be kept in mind that redundancy cases are eligible to draw unemployment benefit for which they are most likely entitled, and in any event the total amounts that they are likely to draw cannot exceed 90 per cent pre-redundancy earnings. When all these things are taken into consideration, apart from the aspect of the EEC, I cannot accept the amendment.
The Minister seemed to be making a case that he would be justified in increasing the contribution if the fund dwindled. The point made by Senator Kennedy is that an employee would be prepared to pay more and have the redundancy payment increased by 16? per cent.
I do not think that this would be acceptable.
The Minister was making the other case.
Somebody said in the course of discussion here that it would be bad if we reached the stage where we could not meet our commitments. We will never reach the stage because if we did we could always increase the contributions.
Amendment, by leave, withdrawn.
I move amendment No. 22:
In page 11, in the 29th amendment to the Schedule, after "unemployment benefit" to insert "(not being disentitlement due to the employer's failure or neglect to pay contributions under the Social Welfare Acts)".—Senator Evelyn P. Owens, Senator Fintan Kennedy, Senator James Dunne, Senator Jack Fitzgerald, Senator Eileen Desmond.
As it stands at the moment paragraph 4 reads:
A weekly payment shall not be paid to a person otherwise entitled thereto for any period during which that person is, by virtue of section 52 of the Act of 1952, disentitled to disability benefit or unemployment benefit.
We wish to add to that
not being disentitlement due to the employer's failure or to pay contributions under the Social Welfare Acts.
We do not feel that a worker should be disentitled to benefit due to the wilful neglect of an employer to pay contributions under the Social Welfare Acts. In other words, we do not feel that a worker should be disentitled to benefit due to the wilful neglect of an employer.
I am satisfied with the new paragraph 4 of Schedule 1. The provision in question will not have the effect visualised in the amendment. I think this is an unnecessary amendment. The paragraph specifically provides for disqualifications from weekly redundancy payments of persons disqualified from disability benefit or unemployment benefit solely because of section 15 (2) of the Social Welfare Act, 1952, which refers to the waiting period only. Disqualification from receipt of disability or unemployment benefit arises from section 15 (1) (a) of the 1952 Act, which is a separate matter. I think the Senator is expressing unnecessary fears here. I am sure the Senator will agree to withdraw this amendment because I regard it is unnecessary.
I still see a problem there. However, I will withdraw the amendment on the Minister's assurance.
I examined this matter before.
For the sake of clarification, the Minister's reference there was to the amendment of the Schedule which would be No. 29 if they were numbered. Is that correct?
Paragraph 4 of Schedule 1.
Paragraph 4 of Schedule 1 of the Principal Act.
Amendment, by leave, withdrawn.
Amendment No. 23 not moved.
Amendments Nos. 24 and 25 are related and may be taken together by agreement.
I move amendment No. 24:
In page 12 at the reference to Schedule 3 and before the proposed amendments to insert the following:—
"The deletion of ‘one-half of' in paragraph 1 (a)."
The effect of these two amendments would be to increase the lump sum benefit. It would increase it to one week's wages in respect of each year of service up to the age of 41 and two weeks' wages in respect of each year of service after the age of 41. I have already spoken at some length about these improvements and I recommen them to the House.
This is an amendment which seeks again to double the amount of the lump sum. I cannot accept it because I think the drain on the Redundancy Fund would be too great and, more particularly, the amount the employers would have to pay would be excessive. Related to recent circumstances it would not be a fair burden to impose on industry at this time. The amount of contribution we are already requiring from the employer is sufficient and is regarded by him, in many cases, as a fairly heavy imposition. I would not accept the improvement to the extent suggested or to any extent. The improvement I am already making in the Bill is quite commendable and goes as far as can be justified.
Amendment, by leave, withdrawn.
Amendment No. 25 not moved.
I move amendment No. 26:
In page 13 at the reference to Schedule 3 and before the amendments to paragraph 5 to insert the following:—
"The deletion of paragraph 5 (1) (a) of ‘78 consecutive weeks' and the substitution of ‘104 consecutive weeks'."
This amendment again seeks an improvement in benefits and it deals with the breaking of continuity of employment. Paragraph 5 (1) (a) of the Principal Act states:
When an employee's period of service has been interrupted by any of the following:—
(a) a period of not more than 78 consecutive weeks by reason of sickness.
The amendment proposes to increase the 78 consecutive weeks to 104 weeks. Although the 78 weeks represent 1½ years we certainly feel that two years is a reasonable period because it has occurred, and unfortunately will occur again, that people often have a protracted illness through no fault of their own. There has been special provisions in other legislation dealing with people who are out of work with a protracted illness such as TB, which is still with us, to some degree, and there are other illnesses which might require at least two years' absence from work. We are asking the Minister, in this amendment, to extend the period of 78 consecutive weeks to 104 for those reasons, I do not anticipate that there would be very many people involved in that kind of situation but the extension of the period to two years would avoid a break in their service which would wipe out all their previous credit.
This is an important amendment but I do not propose to accept it. The reason why 78 weeks was arrived at is that it is a figure struck between two opinions in discussing the preparation of this legislation. The worker side would, naturally, like a longer period and the employers would, naturally like a shorter period. The 78 week period is an in-between figure which, I think, is reasonable. A point I would like to make here is that the 78 weeks would not date from the start of a person's illness. It would only count from the date of the person's dismissal by his employer after he became ill. If he is not dismissed there is no limit at all. The 78-week period is thus a rather justifiable period.
In any event, experience goes to show that very good relations exist between employers and employees in the event of illness. Experience would not justify us taking any drastic measures to stipulate a longer period. Again, we are inclined to think of the not so good employer who might not be sufficiently humane to have regard to what should be done for a person in his employment who is suffering from a protracted illness. The 78-week period is a reasonably optimum period struck between the thinking of the two different sections of industry.
That may be. You can have as many opinions as to what is reasonable in this context as you have people. I would think a period of 104 weeks is more reasonable. The point is that it is not a matter of employers having a discretion in this. If a person has more than 78 consecutive weeks of sick leave his continuity of employment is broken. Am I correct in assuming this?
No. Not unless he has been dismissed by his employer and 78 weeks of sickness have elapsed subsequent to the dismissal. If he is not dismissed his continuity is preserved indefinitely.
Would a person get credit for his previous service?
He would get credit for the time laid down here.
Which is as reckonable under the Act?
The Minister understands the problems we have in interpreting it. It seems to me to indicate "once the service is broken". This seems to me to be one of the points I understood to mean "continuous employment" and as to what terminated it or what broke it.
Continuity would only be broken in the event of dismissal.
Amendment, by leave, withdrawn.
I move amendment No. 27:
In page 13 at the reference to Schedule 3 and before the amendments to paragraph 5 to insert the following:—
"The deletion in paragraph 5 (1) (b) of ‘26 consecutive weeks' and the substitution of ‘34 consecutive weeks'."
There was some confusion in people's minds about this matter because the 34 week period appears again. It has nothing to do with retrospection this time. The amendment is to cover the breaking of continuous service. Paragraph 5 (b) of the First Schedule to the Principal Act mentions a period of not more than 26 consecutive weeks by reasons of lay-off, holiday service pay and any other causes which result in an employee leaving his employment not authorised by the employer. This applies very much to seasonal workers. Experience has shown that the 26 week period is being used in some areas to avoid the provisions of this section. Very often the seasonal worker is just told he is being laid off and this provision is operated in such a way that it mitigates against the seasonal worker building up his continuity of employment. The 26 weeks, of course, is half a year and there seems to be something about a half year in seasonal work. For that reason we ask that it be amended to 34 consecutive weeks.
In the Dáil I could not accept the extension from 26 to 52 weeks, which was the proposal. I do not want to repeat what I have said in support of my view on Committee Stage in the Dáil. I stressed the point, which is most important and relevant to this whole question, that the periods specified in paragraph 5, Schedule 3, do not commence automatically from the date of layoff, holidays, etc., but only from the date of dismissal. If there is no dismissal there is no limit to the period for which an employee's continuity may be preserved. That is much the same argument we had in the case of the seven to eight weeks.
Again the period we arrived at here is a compromise. I do not want to put it off lightly. I do not want to be repetitive because we have had a long discussion on this and the Senators are aware of the pros and cons.
Amendment, by leave, withdrawn.
I move amendment No. 28:
In page 13 at the reference to Schedule 3 and before the amendments to paragraph 13 to insert the following:—
"That insertion after paragraph 6 of the following new paragraph:—
‘If there is a change in the partners, personal representatives or trustees who employ any person, the employee's period of employment at the time of the change shall count as a period of employment with the partners, personal representatives or trustees after the change and the change shall not break the continuity of the period of employment'."
This again is to protect the employee when the firm has come change in a partnership, a personal representative or trustee. It appears that this type of change of ownership may break the employee's continuity of service. Some of the arguments regard transferring the liability from one employer to another are not quite valid here because we specify partners, personal representatives or trustees. The whole nature of the employment would not change but certain aspects of it might.
I do not consider this amendment necessary because I believe that continuity of employment is preserved under existing provisions of the legislation. It is rather important that they are, I would not like technicalities in the legislation could be used as a means of avoiding one's responsibilities. But the existing provisions cover these the types of case described in the amendment. I am advised that they do. I will have a look at this again before Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 29:
In page 13 at the reference to Schedule 3 and before the amendments to paragraph 13 to insert the following:—
"The insertion after paragraph 6 of the following new paragraph:
‘(a) If an employee's employment is interrupted (including voluntarily leaving the employment) and the employee resumes employment at the employer's request or with the employer's consent within 52 weeks, continuity of employment shall not be broken by such interruption.
(b) Where before or after 1st January, 1968 an employee is or was indirectly employed or engaged by an employer (through an agency, contract or otherwise) and subsequently that employee became employed directly by that employer, that employee's employment shall be deemed to be continuous.'".
This amendment is to cover periods of interrupted employment. It is to ensure in the case of an employee voluntarily leaving the employment and subsequently resuming employment at the employer's request or with his consent within 52 weeks—that is a period of one year—that the continuity of the employment should not be broken by such interruption.
This is largely to deal with the position of a female worker who leaves voluntarily to get married and the employer asks her or she applies for her job back. This is something that has happened quite frequently. We feel that this should not necessarily break the continuity of the employment. We accept that the period of interruption, of course, should not be reckonable. This is something that is occurring more and more, where married women are now being actively encouraged in certain areas to re-enter the work force, because there is a shortage of women workers, as the Minister I am sure would agree, particularly in Dublin.
On 29 (b), as it has an element of retrospection in it, with the permission of the House I will withdraw that part, and the Minister need not include it in his reply. I would like the Minister's views as to how the service of such workers would be reckonable. Has she broken her continuous service? I do not think this should be so. She should be allowed to continue when she is with the same employer before and after her marriage.
I do not know if the Senator is thinking here of the period during which a married woman is permitted to be absent which should count for continuity. I think the provision we make in such cases is ample. My reason for opposing section (a) of this amendment—I notice the Senator will not press section (b)—in the other house was because I do not want to encourage people who flit around from one job to another if they can. It tends to provide for that type of person.
I have sympathy for the type of case where it may occur due to circumstances beyond the control of the person, but the amendment would appear to be making provision for people who flit from this job to that job and the other one. Everybody knows that a good employee is one who stays in the same job, is interested in the work he is doing and gives a good long service. I do not think we should put a premium on the person who is inclined to be tripping around. At the same time, I am not denying them the right to do so. While the amendment seeks to provide for another type of case, it definitely would be benefiting the type of person who would never be content in any job.
I do not know about the flitting around. At some stages I suppose we encourage mobility of workers as well. However, that was not the intention of the amendment —to encourage flitting around. However, if that is the problem and if the Minister were prepared to accept the principle of the female worker leaving on marriage and resuming after an interrupted period of less than 52 weeks, I would certainly ask him to bring in an amendment to cover that point on Report Stage. If not, I will draft it myself.
The next section deals with the interruption due to pregnancy.
I am not talking about pregnancy but that is the next one all right.
Is the casual workerper se covered in this section? There are certain types of industry in which the casual worker is a feature of the industry.
Yes, the seasonal worker is covered.
No, I do not mean that. I had in mind the bakery trade, for instance. Casual workers are a feature of the bakery trade. They regularly go from one employer to another. The work is continuous but the work in the individual bakeries varies. These people would have continuous employment but not with the same employer. Are they provided for in the Bill?
No, only to a point. There is nothing specific in the legislation calculated to encourage working for a number of different employers.
That is a feature of that particular industry and I think of others too. I wonder if some consideration should not be given to their case?
I did not hear from the Minister as to whether he was prepared to consider the question of the female worker who leaves on marriage and resumes in the same employment.
What I said about that on the amendment was that I felt they are already adequately covered by other provisions in the legislation. I do not think it would be necessary to cover it any further. I think this is really splitting hairs about the cases that are already covered in a general way. Many of the amendments made here appear to have arisen from exceptional cases of hardship. It is impossible to legislate for such extreme cases. I doubt at the same time if there would be any extreme cases under this section that are not already provided for elsewhere in the legislation.
I am sorry, but I fail to see where it is covered in other sections. This is where an employee leaves voluntarily; it is not dismissal as such. It is not necessarily redundancy. Then they return at the request of the employer or they ask for their job back with the same firm. The point is that this interruption should not mean a break in continuity for reckoning continuity under this Bill.
I accept that this may be the type of case the Senator has in mind. However, the amendment as worded appears to cover also the person who would have different periods of employment with different employers and it could ultimately fall to the one employer to aggregate the amounts of service they had and he would be liable to pay the lump sum which was actually earned or accumulated through service with other employers.
I was dealing only with paragraph (a). If I get an assurance from the Minister that, in the case of a woman who is in a firm, voluntarily leaves to get married and comes back within 52 weeks, her previous service will be reckonable under this Schedule, then I will not pursue it. This is the particular point I am making and the particular problem I am trying to resolve.
I will look at the particular case the Senator has made in respect of the married woman who comes back and puts a different name on the roll after she has left and see if we are neglecting her. I do not think we are.
Amendment, by leave withdrawn.
I move amendment No. 30:
In page 13 at the reference to Schedule 3 and before the amendments to paragraph 13 to insert the following:—
"The substitution in paragraph 8 (c) of ‘26 weeks' for ‘13 weeks'."
I hope I do not keep up my 100 per cent failure rate today. This is the last of the amendments. When I spoke on the Second Reading of the Bill I referred to the problem of pregnancy leave. I think I was confused at the time because I referred to it as continuity of employment. The Minister in his reply mentioned that the 26 consecutive weeks by reason of lay-off, holiday, service by employees or any other cause does not break continuity. I presume the "any other cause" would, in fact, cover leave on pregnancy where there is an agreement between both sides. Then we come to "reckonable service" and the reference to "absence in excess of 13 weeks in a period of 52 caused by any reason not referred to paragraphs (a) or (b)." Paragraphs (a) and (b) refer to "occupational accidents or diseases within the meaning of the Social Welfare Acts and absence through illness." I do not know if pregnancy has been defined legally as an illness. I suspect it has not, but I should like some idea on whether it is covered by the 26 weeks; if not, it must fall within subsection (8) paragraph (c) which is 13 weeks and this is why I put down the amendment to increase 13 weeks to 26. The Minister did indicate that he considered 26 weeks as reasonable for pregnancy. I do not wish to start horse trading on this but I think that, if 26 weeks is in for illness, we should cover a similar period for pregnancy leave, where it is by agreement and authorised by the employer, by increasing the 13 weeks for reckonable service up to 26.
The amendment seeks an extension from 13 up to 26 weeks of the period of the employee's absence from work with his employer's consent for reasons other than sickness, lay-off, holidays, or service with the Defence Forces, which is allowable as reckonable service under Schedule 3. I consider that it is right that we should adhere to the general principle that employers should not be obliged by law to incur liabilities towards their employees in respect of periods when their services are not available to them. Certainly not in respect of long periods anyhow. The 13 weeks period allows for a certain relaxation of this principle and I think it was accepted by everybody with whom we discussed the provisions of this legislation in the course of drafting that this was a reasonable relaxation of the principle. I think this 13 weeks is quite reasonable.
I appreciate that Senator Owens would like to make it 26 and somebody else would like to make it 52 but I am afraid I must retain the existing 13 weeks period.
On that point, we are in the process of negotiation in many areas the type of agreement to allow for pregnancy leave. I do not know but I do not think it will necessarily be 13 weeks. It may be more in certain areas, it may be less. But the fact that the 13 weeks is specified there means that even if we come to an agreement with an employer which allows more than 13 weeks it still would be precluded from this because this is in legislation and would cut across an agreement.
The ILO, I think, recommend 14 weeks for pregnancy leave as being reasonable. I took the 26 because it tied in with the 26 weeks which has been allowed for illness, and I still do not know whether pregnancy would be deemed an illness under this section or not.
The 13 weeks is considered to be fair towards what the Senator describes and what has now become to be known as pregnancy leave for women. We have examined it. We promised to look into this before the Committee Stage. I have had a look at the ILO Convention since. In fact, I have been there since and I still think that our 13 weeks is accepted by everybody as being reasonable. I will have another look at it before Report Stage but I am not promising to come back with any improvement, unless I find some reason that does not occur to me now.
If the Minister did not specify any period it might leave it more open for negotiation where there is an agreement between the workers' representative and the employers.
This is it. Agreement is always better than any legislation.
Amendment, by leave, withdrawn.
Schedule agreed to.
Title agreed to.
Bill reported without amendment.
I should like it soon, but I have promised to look at a few items in the Bill and I think it is important that we should have some time, particularly where there are actuarial assessments involved. While we are anxious to have the Bill made law as soon as possible I would require two weeks if the House is agreeable.
Report Stage ordered for Thursday, 8th July, 1971.