Private Business. - Redundancy Payments Bill, 1979: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Redundancy tends to strike a note of fear. It has similar connotations to sickness, injury or accident. The numbers who experience it, and the traumas and hardships which frequently go with it are considerable. Since the redundancy payments scheme came into operation at the beginning of 1968, over 100,000 redundancies have been notified to my Department. That figure gives an idea of the contribution which the scheme has made in alleviating the anxiety and the hardship which so many have to experience in situations of redundancy.

I am glad to say that the number made redundant in 1978 fell to below 10,000 for the first time since 1973. This was an improvement of almost 3,000 on the 1977 figures and while we must strive to bring the level of redundancies down still further, I believe the improvement is a reflection on the considerable efforts of the Government to increase employment opportunities and reduce unemployment. We will continue with our efforts and I hope to see a further significant reduction in our redundancy figures this year.

At the same time, the incidence of redundancies as a measure of job loss and human hardship must not be exaggerated. The redundancy payments scheme could be seen as an adjunct to our moves from protection to free trade. The removal of tariff barriers had begun in the early sixties and was greatly extended by the Anglo-Irish Free Trade Agreement in the middle of the decade. Membership of the European Communities was also foreseen, with which would come further dismantling of our tariff barriers.

Studies carried out in the early sixties showed that, in some industries a substantial amount of restructuring, involving job changing and training in new and developing skills would be necessary if those industries were to prosper in free trade conditions and if employment in them was to be maintained and expanded. The 1967 Act was an important contribution. It has helped to alleviate the short-term hardship of workers made redundant and to promote the necessary long-term restructuring of industry, by facilitating, retraining and readaption and promoting the general acceptance of change. Other elements of our manpower policy, including the advisory and placement facilities of the National Manpower Service, the resettlement allowance scheme and the training and retraining programmes of AnCO were all available as well to help promote the changes the country needed.

On reviewing the legislation, I have had regard to these factors as well as to developments since the scheme began. I have also taken into account criticisms, representations and suggestions received. There have been detailed discussions with both employer and worker representative bodies. The proposals in the Bill which is now before the Seanad are based on the premise that the redundancy payments scheme should continue and that it be developed as a component of manpower policy.

My review showed the scheme needed to be significantly recast. The general improvement in the level of social welfare benefits, and especially the introduction of pay-related benefit in 1974 raised the question of the continuing need for redundancy weekly payments. These are paid in conjunction with unemployment benefit and pay-related benefit but normally subject to the rule whereby the aggregate weekly amount does not exceed 85 per cent of pre-unemployment average net weekly earnings or £50, whichever is the least. This 85 per cent rule has meant that since 1976 redundancy weekly payments have been considerably curtailed. In fact, there are cases where redundant workers have ceased to become entitled to any weekly payments. A recent survey of almost 1,000 recipients showed that 78 per cent were receiving payments on a reduced or nil rate, while only 22 per cent were receiving the maximum payments of £24.

A comprehensive study of the redundancy payments scheme published in 1977 under the auspices of the Economic and Social Research Institute concluded that the weekly payments, being an income maintenance feature of the scheme, should be discontinued, income maintenance being more appropriate to the social welfare system.

My own examination of the scheme has led me to the same conclusion. One of the main provisions of the Bill is, therefore, to discontinue weekly payments. It is proposed, however, that persons currently in receipt of redundancy weekly payments at the point when they are abolished, that is, 6 April 1979, will continue to receive their entitlements until they are exhausted or cease for other reasons.

Weekly payments have always been associated, particularly by the trade unions, with the workers' contributions. This probably results from a comparison with the British scheme which has no weekly payments or workers contributions. I consider it appropriate therefore that as weekly payments are to be discontinued, so too should the workers' contribution. A proposal is accordingly included in the Bill to abolish the workers' redundancy contribution from 6 April 1979. The Redundancy Payments Fund will be financed henceforth, it is proposed, entirely by employers' contributions.

It is further proposed that these employer redundancy contributions should, as with social welfare contributions in general, be pay-related. They will be collected as part of the general social insurance contribution scheme and be levied on earnings up to the same ceiling as for social insurance purposes. The figure specified in the Social Welfare Act, 1978, is £5,000, but provision is made to update this figure. I do not think it is necessary for me to outline the advantages of a system of contributions related to pay. Senators will recall that during the passage of the Social Welfare Bill last year the House discussed the conversion from flat rate to pay-related contributions. I would just like to say that a pay-related basis is all the more appropriate for redundancy contributions since the workers' lump sum and hence the employers' rebate entitlements will be pay-related.

I am proposing that the rate of the redundancy contribution be set at 0.5 per cent of reckonable earnings. It is estimated that this will give the Redundancy Fund an income of about £9 million in the year commencing 6 April 1979, which I expect will keep the fund in credit at least up until the end of the first year of operation of the revised scheme. Then it is my intention to review the situation, including the adequacy of the contribution rate, in the light of the experience in the meantime.

I am also proposing to raise the statutory ceiling on lump sums. The ceiling for calculating lump sums is at present £2,500 and I propose to double this figure. This would give a best possible lump sum of £4,087 when the revised scheme comes into operation as against £2,043 now.

An unsatisfactory characteristic of our redundancy payments scheme is its complexity. Senators who have had to understand how the scheme works will be aware of this. An important objective in my review of the scheme was therefore to simplify it to the greatest extent possible so that it is more easily understandable to those who have to do so. Indeed, the amendments I have already indicated, though not proposed for simplicity sake, will mean a much less complicated scheme.

The rebate system as it now exists is particularly complex. At present an employer is entitled to a 55 per cent rebate if he gives the requisite two weeks' notice, with an extra 2½ per cent for each week of extra notice up to a maximum of eight weeks or 70 per cent. Further, in the case of certain long-service employees part of the lump sum is rebated at 100 per cent. Where two weeks' notice was not given, the rebate could be reduced to 45 per cent. This complicated rebate system was designed to encourage employers to give additional notice to workers so that they might make arrangements about further employment and also to provide advance information on impending redundancies to the State agencies concerned so that they might be better able to carry out their functions in relation to the redundant workers. I refer in particular to the placement function of the National Manpower Service and to AnCO.

Since the enactment of these rebate provisions there have been other developments which ensure that these objectives are more effectively achieved than through the provisions of the Redundancy Payments Acts. The Minimum Notice and Terms of Employment Act, 1973, and the Protection of Employment Act, 1977, make provision in regard to the giving of notice. The National Manpower Service and AnCO and their offices throughout the country concern themselves with the placement and training of redundant employees whenever possible.

I am proposing, therefore, to confine the notice provisions of the Redundancy Payments Acts simply to two weeks, which is adequate for the administration of the scheme, and at the same time I am proposing a uniform level of rebates set at 60 per cent which is just below the average rate of rebate up to now. I might point out that this is a fairly high rate of rebate, especially when compared with the UK's current 41 per cent. For failure to comply with the minimum of two weeks' notice a provision is included whereby the rate of rebate may be reduced from 60 per cent to 40 per cent. I am further proposing that the Minister for Labour should have power to vary these rates of rebate by regulation, subject to the sanction of the Minister for Finance and possible annulment by either the Dáil or Seanad.

When the 1967 Act was enacted the old age pension age was 70 years. This continues to be the age up to which a person can qualify for redundancy payments as it was not brought down with old age pension age. I feel the upper limit for redundancy payments entitlement should be set at old age pension age and accordingly a provision to that effect is included in the Bill. I am, however, aware that a sudden drop could disentitle many people, both employers and workers, with reasonable expectations in this respect in the event of redundancies. It is proposed, therefore, that the drop should not occur until one year after the other provisions in the Bill come into operation, that is, from 6 April 1980.

In 1967, when the scheme was established, the normal working week was 42 hours and the number of hours in a week which a worker was normally expected to work in order to qualify under the scheme was set at half that number, that is 21. The reasoning behind this is that the scheme should cover employments from which employees are deriving the main source of income and should not extend to subsidiary jobs. I am proposing that, since the normal working week is now 40 hours, the number of hours needed to qualify be reduced to 20.

One of the problems faced by an employee who is under notice of redundancy is the need to get another job. While most employers would in the circumstances allow employees reasonable time off to look for work or arrange for training, I feel this is something which should be given to employees as of right. I have accordingly included a provision in the Bill to this effect. To safeguard against abuses, employers may require the employee to give reasonable evidence of appointments in this regard.

As regards the Employment Appeals Tribunal, Senators may well be aware of delays in hearing resulting from a backlog of cases. This is largely due to the increased work-load imposed on the tribunal by the Unfair Dismissals Act, 1977. I have been conscious of this problem for some time and I am proposing in the Bill that the membership of the Tribunal be considerably expanded. Provision is made to permit the appointment of five vice-chairmen instead of three and of 30 ordinary members instead of 24. I have also provided that should the work-load of the tribunal warrant it, additional appointments may be made for the speedy despatch of business.

I now come to the remaining amendments to the Acts which affect details of eligibility and the administration of the scheme. As details of these amendments are I believe set out clearly in the Explanatory Memorandum I propose here to give you just a brief summary of what is involved.

In relation to short-time, sections 10 and 11 improve the provisions of the Act relating to short-time situations, section 10 by providing the tribunal with some index of the permanency or otherwise of the short-time involved and section 11 by allowing employees whose hours or pay are reduced substantially, 52 weeks within which they can claim redundancy.

Regarding appeals to the tribunal, section 12 empowers the tribunal at its discretion to allow appeals beyond the usual two-year limit in cases where the employer fails to give notice or a redundancy certificate. Regarding an employee leaving before expiry of notice, section 9 allows employees and employers to come to an agreement in the situation where an employee wishes to leave outside the obligatory notice period.

In cases of winding-up and bankruptcy, section 13 provides that the Minister's claim where he has paid employees direct from the fund should rank as a priority debt. This should conduce to the workers involved getting paid earlier and reduce the incidence of direct payments from the fund.

As well, provision is made in the schedule so that periods of leave for childbirth where the employee resumes and periods of dismissal where reinstatement has taken place under Unfair Dismissals Act shall not break continuity of service.

Also, to enable me to act quickly and effectively in administering the fund, I have taken power by regulation to change the ceiling for calculating lump sums, the contribution rate and the level of lump sums—all to be subject to the prior sanction of the Minister for Finance and possible annulment by either Dáil or Seanad. Penalties have been updated and the Bill contains the standard provisions on citations, construction and commencement.

In the Dáil a number of amendments were proposed by Deputies and having considered these I myself put down some amendments for Report Stage which substantially met the points sought by the original amendments. These related to certain points of detail in the matter of entitlement involving the requirements in certain short-time and minimum notice situations and the fixing of the ceiling for calculating lump sums.

I might add that it is my intention to have a guidebook prepared on the amended scheme when this Bill has been enacted.

In conclusion, I believe that the proposals in the Bill are worthwhile and useful and I hope Senators can support them.

I would have preferred that the Minister and his Department would have availed of this review of the redundancy payments scheme to take a closer look at the philosophy behind the whole idea of redundancy payments. This Bill, while it is welcome, merely modifies some practical aspects of the Act which has been in existence since 1968 and tightens up some administrative problems in the light of the experience in the past decade or 12 years. It does not contain any evidence of a substantial rethink on the part of the Department as to what a redundancy payments scheme should be all about and how it should really operate. The philosophy that underlay the formulation of the redundancy payments scheme in the first instance was a commendable one at that time. It is obvious to anybody that the intervening decade has brought very severe changes in the employment and labour situation and in the general economic situation which would have an effect on such a matter as redundancies.

To look at circumstances that applied in 1968 would be beneficial. At that time, as the Minister in his speech outlined, we were thinking ahead to EEC entry. The Anglo-Irish Free Trade Agreement was already in operation and the removal of tariff barriers was already in process. Certain needs had to be met to meet the future economic situation which would present itself with the EEC entry and also with the full operation of the Anglo-Irish Free Trade Agreement, namely, the question of disruption of old traditional industries, restructuring of those same industries and how possible redundancies would be faced up to. The philosophy of that time was how best to make easier the question of redundancies as to how it would effect workers.

Unfortunately, unemployment in 1968 as compared with unemployment now was at a much lower figure. That would have made easier the formulation of any redundancy payments scheme. Likewise social welfare payments were also further belowpro rata general average income than they are now and that also would have made easier the formulation of redundancy payment schemes to boost people's unemployment benefits. But circumstances a decade later have changed considerably. Redundancies have increased from a figure of over 3,000 to 10,000. Admittedly a couple of years ago during the world recession those figures were much higher, but they are liable to great variation from year to year. In 1975 there were 19,000 redundancies; the following year the figure had gone down to 12,000 and then down again to 10,000. We have no guarantee, of course, that the figure will not be on the increase again at any time in the future.

In the light of the general economic situation now, which is different from that of 1968, it would have been a worthwhile exercise to have had a more thorough examination of the philosophy behind what we expect the redundancy payments scheme to do, particularly in the light of the decision now being made to discontinue the weekly maintenance payments part of the redundancy scheme. The weekly maintenance income was considered essential due to the low social welfare benefits which applied 10 years ago. Now with the increase in those benefits in the intervening decade it is found possible to remove those weekly maintenance payments without any great deleterious effect on the income of the unemployed or redundant person.

That leaves us with the lump sum which in a way can also be regarded as a sort of income maintenance. The person who is made redundant and qualifies for this redundancy is given a lump sum which in one way is regarded as a compensation for the service he has given in particular work and will be enough to tide him over, with the addition of unemployment benefit, until he has found himself another job.

Some employers pay what are calledex gratia payments, in addition to the obligatory State lump sum payments. These employers are showing tremendous social consciousness and they are certainly to be complimented. There is no legal obligation on them to pay out the ex gratia payments. The fact that so many employers make an ex gratia payment is in one way a reflection on the adequacy of the lump sum amount given by the State. There are statistics to show that the lump sum can vary greatly from £100 up to, perhaps, the equivalent of two, three or four months' income.

We have to question whether that is an adequate compensation, given that the same philosophy exists today as underlay the Bill when it was formulated, namely, that the lump sum was regarded as a compensation in a way for the property rights which the worker had built up in the job over a period of service. If so, we have, in the light of today's circumstances, to determine whether that lump sum amount is adequate, particularly in view of the increased unemployment situation and the fact that the redundancy scheme as it has operated has always seemed to result in older employees being laid off. Older workers have always found it more difficult to find alternative employment. It has also meant in its operation that certain categories were in a more difficult position than others. People in the building and construction industry, people in semi-skilled and low-paid jobs, were always more adversely affected than people in better paid positions. We have to ask ourselves therefore whether the lump sum as it applies today is adequate or not.

It is interesting to compare the figures that apply here with the figures in Northern Ireland. In Northern Ireland they are calculated on a different formula, half a week between the ages of 16 years and 21 years and one week for each year between the ages of 21 years and 41 years. That compares with the system here where it is a half a week between the ages of 16 years and 41 years. We should consider whether it would be better to bring the formula for the calculation of our lump sum payments into line with what exists in Northern Ireland.

There are other matters which affect the operation of the redundancy payments scheme. We have to see whether it has been as successful as originally intended. I have already referred to the general level of unemployment which applies now and which can have a very serious effect on the job prospects of the person who has been made redundant. We have also to consider that the fraction of people covered by redundancy payments is very small in comparison with the overall numbers who are laid off jobs. This is due to the fact that one must have two years' continuous service to qualify for redundancy payment. There are quite a number of categories of jobs which would never qualify due to their being casual and intermittent work, especially in the building industry.

Unfortunately, any scheme when it is drawn up cannot have regard to the individual circumstances. Since redundancy is a most individual concern in its effect on the person concerned, it is unfortunate that some scheme cannot be devised where there could be supplementary payments under the redundancy payments scheme to take account of individual characteristics. I have already given account of the intermittent nature of certain jobs and the fact that some people are older than others when they are laid off. It is therefore more difficult for them, not only to obtain jobs but to go out and seek them, than it is for younger people. It is a pity that some redundancy payments scheme could not be formulated which would take account of these aspects.

The Minister has missed an opportunity to have an overall look at the philosophy behind the redundancy payments scheme. There are a number of alternatives existing in other countries which could be looked at. I have read that in some countries emphasis is placed on the younger people being made redundant so that the older people can be given continuity of service. It is most important to older people that they can hold on to their jobs, because young people can obtain alternative employment much more rapidly. They can go out and seek employment much more eagerly and enthusiastically than older people.

The Minister, in his speech, has referred to retaining the redundancy payments scheme as a part of the manpower policy. That is commendable, but the Minister has not outlined in what respects that will be done. This is where the redundancy payments scheme since it was formulated has not been as successful as we would have hoped. There have been cases where the employers and the trade unions and the manpower agencies have got together, but there is nothing generally obligatory in this regard. In other countries the employers, the trade unions and the State agencies get together and plan ahead for redundancies, if redundancies there must be.

The Bill deals mostly with technical aspects and it tightens up some administrative problems that developed over the years. I should like to mention some problems on which I should like the Minister to give me his observations. I wonder if the increase in the earnings ceiling up to £5,000 is adequate in comparison with the situation in Northern Ireland, which seems to give a much more adequate lump sum payment than here. In regard to the two weeks' notice and the incentive to employers, I notice the Minister has settled on a figure of 60 per cent for the rebate. Under the old scheme this varies between 40 per cent and 70 per cent. I wonder why the Minister did not just settle for the 70 per cent rebate; it would have been a gesture on his part.

There is a lot to be said for keeping an incentive there for employers to give plenty of notice regarding redundancy. The Minister has mentioned that under the Minimum Notice and Terms of Employment and Unfair Dismissal Acts there are statutory periods of notice of dismissal stipulated. Under the Minimum Notice and Terms of Employment Act, 1973, employees can have a right to notice of dismissal of up to eight weeks. This is important, because the longer the period the person has in which he can seek alternative employment the better for himself. I should like to know whether it would not have been wiser and better in the overall situation to have kept a graded incentive whereby the longer the notice given the higher the rebate. If an employer is good enough to give up to eight weeks' notice under this redundancy payments scheme, perhaps we should have given him some acknowledgement of that incentive, as he is doing something in addition to the minimum period of notice envisaged. There are advantages in this for the employee who knows a few weeks ahead what his situation will be. Since redundancy seems to have a very serious effect on older people, who unfortunately come under the hammer of redundancy far too easily, the longer the period they have to seek alternative employment the better it would be.

I notice furthermore that the Minister has settled on a minimum rebate of 40 per cent. It was 45 per cent in the old scheme. Again, he has failed to increase the amount to the maximum under the old scheme. In this instance he is only giving a 40 per cent rebate instead of the 45 per cent.

Giving employees the right to paid time off is a most welcome development, and it is possibly the best thing in the Bill. I wonder if two weeks is sufficient. Maybe some arrangement could be reached where, if an employer is good enough to give anything up to eight weeks' notice, a longer period than two weeks' time off could apply. A formula could be worked out on this basis.

The other sections of the Bill largely deal with administrative aspects. There must be an increase in the number of vice-chairmen of the appeals tribunal due to the number of redundancy applications coming before the tribunal. All in all, a rethink is overdue in regard to what we expect a redundancy scheme to do for us. It is regrettable that we should have to contemplate such a thing as a redundancy scheme and payments. The Economic and Social Research Institute in their very fine report state that in the future the post-redundancy period before a person would find alternative employment is more likely to become longer than shorter. This is something which will have to be looked into in regard to the preparation of this scheme.

Should the Minister not regard it now as opportune that there be a thorough examination of the redundancy payments scheme to see how it could be integrated properly into an overall manpower policy scheme? This is not referred to either in the Minister's speech or in the terms of the Bill as laid before us. Apart from those reservations I have mentioned, I welcome the Bill because it gives certain benefits to employees in these difficult times.

I welcome the Bill and wish to commend the Minister for the many desirable and realistic changes in the redundancy arrangements contained in it. As the Minister pointed out, improvements in the level of social welfare benefits, and particularly the introduction of pay-related benefits, form a logical basis for discontinuing weekly redundancy payments. Henceforth, redundancy contributions made by employers only will be pay-related as will the workers' lump sums. Lump sum payments will now be doubled to a maximum of £4,087, subject to review a year hence, with the ceiling for calculating lump sums also being doubled to £5,000. Under both headings these are important advances, and on the question ofex gratia payments referred to by Senator Markey, one will tend to get a certain amount of negotiation for sums over and above what is statutorily settled as lump sum figures.

The reduction in the number of hours worked per week from 21 to 20 is realistic in the light of the normal working week which is now 40 hours. Yet, importantly, it is high enough to help to ensure that a job which entails 20 hours per week forms the main source of income, thus properly avoiding the necessity for the payment of redundancy in respect of part-time employment. I welcome the statutory base now being given to a redundant worker to have a two-week period to seek another job. I also welcome the increase in the membership of the Employment Appeals Tribunal to help expedite the business of the tribunal.

The Bill is an advance on previous measures. My contribution will be based on the practical problems that have confronted my fellow trade union officials in dealing with the ordinary day-to-day problems that arise through the minimum notice of employment, the unfair dismissals and the redundancy payments measures and the difficulty they encounter as a result of tribunal decisions. I will be making some observations about the areas where the Bill has not remedied those particular situations.

Sections 10,11,12 and 13, of the Redundancy Payments Bill, 1979, which was amended and approved by Dáil Éireann on 28 February, were overdue when the 1971 Bill was passing through the Oireachtas. Section 12 was accepted by the Minister for Labour in the Dáil on 28 February. The Minister for Labour has accepted some of the urgently needed amendments which had been requested by the Irish Congress of Trade Unions and he is taking power under section 4 to amend the manner in which the redundancy lump sum may be calculated. Most of the improvements sought by the Irish Congress of Trade Unions were, to my knowledge, resisted by the Minister for Labour.

The Redundancy Payments Bill, 1979 attracts constructive criticism mainly because the Minister for Labour and his Department have not given adequate attention to the necessity to protect the interests of the lower paid workers affected by redundancy. This Bill in common with the Minimum Notice and Terms of Employment Act, 1973, enables the Employment Appeals Tribunal to award compensation without making provision to secure the payment of the award to the redundant workers. Section 7, for example, is supposed to give an employee a right to some time off with pay in order to look for a new job. But, as the tribunal's award will not be a guaranteed payment from the redundancy fund, the employee may whistle for this award if the employer becomes insolvent, as under the Minimum Notice and Terms of Employment Act. These are very important points that affect the day-to-day workings of the trade union officials and manifest a lot of the frustrations we are up against.

When firms go to the wall, it often happens that there are not sufficient funds to pay preferential creditors. These include the Revenue Commissioners and social insurance fund. Unless the tribunal's award is guaranteed, like the redundancy lump sum, as one trade union official said to me—it was the first time I heard the expression—it is as worthless as Wood's halfpence. I do not know what that means but that is what he said. The Minister should not have proposed the abolition of the weekly payments without increasing the lump sum. This is a view that most of the officials have. They feel that as far as possible all employees should be covered.

In section 4 the overdue proposal to lift the ceiling from £48 to £96 weekly will benefit workers in receipt of pay in excess of £48 weekly, but it effectively reduces the compensation payable to many thousands of workers, especially women, who are paid less than £48 weekly. The Bill, therefore, reduces the amount of redundancy compensation available to workers in the greatest need. Pending review of the situation, the minimum lump sum payment should be increased from a half week's pay for each year of service after the age of 21 years. With the exception of the extra week's pay introduced under the 1971 Act, the method of calculating the lump sum has not been improved since 1967. The minimum lump sum payments are too low and should be increased at least to the levels obtaining in Northern Ireland. Although many firms pay much higher payments than those provided for in the Acts, workers employed by an insolvent firm or company have to accept the minimum payments which are guaranteed by the Redundancy Fund. When one considers that as many as 9,000 notifications of redundancy are recorded in a year that is not a very good situation to be in. The weekly redundancy payments are a valuable benefit where firms become insolvent, especially if it transpires that the firm did not return the income tax and social insurance payments to the proper authorities. Trade unions have had experiences of this.

Due to the refusal of successive Governments to update the deferred payments, or resumed weekly payments to current pay levels, the value of the deferred lump sum was diminished or extinguished. The Minister for Labour admitted in Dáil Éireann on 6 February last that some weekly payments were as low as 3p, 4p and 6p, while some payments were as high as £24 a week. That is very considerable when there were over 2,300 payments last January. The Minister has an obligation to make a compensatory payment in the form of an increase in the lump sum for workers earning less that £48 weekly. A half week's pay for each year of service is not enough. The Minister for Labour has an obligation to relate the scope of the Redundancy Payments Act to the current customs and practices in employment so that workers are not deprived of the generality of benefit. The qualifying period of two years, known as the requisite period, effectively deprives thousands of building workers of the benefits of the Act. The same exclusion applies to thousands of workers in other occupations. Many building contracts and sub-contracts are completed within two years. The Minister should agree to reduce the qualifying period to, say, 78 weeks and review the position in a year's time. We intend to put down an amendment to reduce the qualifying period to 1½ years on Committee Stage of the Bill.

The restrictive interpretation given in law to "place" of employment is another matter that causes concern to the officials in the day-to-day activities. Section 7 of the Redundancy Act of 1977 creates unreasonable hardship and difficulties for building trade workers in particular. The practice in this trade is to invite workers to apply for employment on the actual site. Thereafter, the trade would like to regard the entire State as actual place of employment and herein lie the abuses. Building firms have often claimed that workers sent, for example, from a Galway site to a Dublin site did not in law change their place of employment. The word "place", from information I have received, was the subject of a High Court decision and the meaning of the word is still as vague as ever to the people on the tribunal and to the trade union officials who have to argue the interpretation. We will be offering an amendment which will apply to workers generally and which will be seen to be fair and reasonable in relation to building trade workers.

The scope of the Redundancy Payments Acts, where thousands of women workers are concerned, is determined by what is well known in industry as the 21-hour rule. It is proposed in the Bill before the House to reduce the qualifying hours from 21 to 20. It has been proved elsewhere in the country that the qualifying hours should be reduced to 16. There has been a clear tendency in the service employment to reduce the qualifying hours well below 21 or 20 so that as many workers as possible may be kept outside the scope of the Acts. The Post Office authorities have reduced the hours of work of some grades to 18 hours weekly. I doubt if it will have escaped the notice of the Department of Labour that the daily hours of work of many service workers have been reduced to three where there is a six-day spread.

The managers of industry are altering work practices so that scores of women workers are being put outside the protection of the Acts week by week. What I am relating here are notes I have taken from the practical experiences of trade union officials who come across the problem on a day-to-day basis. Thousands of workers who were within the cover of the redundancy Acts three years ago are now without protection because the hours of work were reduced from 21 to 18. The reduction from 21 to 20 will not restore the position. The view of most trade union officials that I have spoken to is that the Minister's Department should tailor the Acts to the current practices in industry and services. Whenever legislative proposals to amend the Redundancy Payments Acts are laid before the Oireachtas, provision should be made on the title of the amending Bill to facilitate harmonious modifications in the associated legislation, namely, the Minimum Notice and Terms of Employment and Anti Discrimination (Unfair Dismissals) Acts to which I made reference earlier on.

The Employment Appeals Tribunal has been established to determine appeals under the three codes of law in connection with redundancy and other conditions of employment. Apart from the tribunal, there are several links between the three Acts. Employees making claims or appeals before the tribunal usually have claims under two and, in a lot of cases, under all three Acts, at the same hearing, especially when a firm or company is in an insolvent condition. Unless there are common rules for calculating continuous employment, the tribunal is seen to be making incomprehensible decisions in relation to common case facts or evidence. Any change in the 21-hour rule in the Redundancy Payment Acts should be reflected in the Minimum Notice and Terms of Employment Act. There is no enabling power in that Act to harmonise the qualifying hours for regulations. Up to now, the qualifying hours have been common to both codes of law.

The best way of removing these anomalies is by extending the scope of the Redundancy Payments Bill so that the scope, provisions and continuity rules in the redundancy legislation would be reflected in the Minimum Notice and Terms of Employment Act. Unless the scope of the Redundancy Payments Bill is widened, it will be necessary to promote a Bill to amend the Minimum Notice and Terms of Employment Act, and a draft Bill has been prepared for this purpose. The trade union officials wish me to look at the draft they prepared to see if I can get some advice on it.

In the past, the Minister for Labour has defended the scope of Bills on redundancy mainly on the grounds of legal perfection. But, as soon as Bills have been enacted, the legal advisers of other Governments exploit each weakness which was identified in the debates. This example is followed by public authorities especially in the health service. The Department of Education has punched a hole in section 7 of the 1967 Act by making a teacher redundant in a manner which deprives the worker of compensation. The decision was made by management not by unions or workers. If management decides to make a class of worker redundant, those workers should be compensated.

In 1969, the Limerick Health Authority decided to make midwives redundant by altering the name of the grade and the degree of qualification required. The Department recognised the implications of that decision and section 4 of the 1970 Act was given retrospective effect in order to restore the scope of that Act. A similar correction was made in order to restore the scope of the 1971 Act. The Department of Education has been permitted by existing legislation to make every unqualified teacher redundant without payment of redundancy compensation. An amendment will be offered for the purpose of providing protection for a class of workers, namely, unqualified teachers.

Section 7 deals with time-off to seek a new job. This is a welcome improvement on the scope of the redundancy Acts. Unfortunately, there is no provision in the Bill to ensure equality of treatment for employees generally. The employee may have to apply to the District Court for the award given by the tribunal and, if the employer is insolvent, the award has to take its place with the preferential debts namely income tax, social insurance, arrears of pay, holiday pay, minimum notice, suspensions and so on. The tribunals awards should be payable from the funds and awards under the Minimum Notice Act should also be paid from the redundancy fund.

There is a serious defect in section 7. The employee cannot qualify for time off with pay in order to look for another job unless he is given notice by his employer. Many employers, especially those who do not wish to draw attention to a pending failure of business, do not give notice under any Act. This section would apply to firms engaged in reorganisation. The time off section would not apply to firms in liquidation and there would be no funds available to pay the amount awarded by the tribunal. The union officials rightly asked, "Why should a redundant employee who has had to appear before the tribunal about time off pay have to go to the District Court to recover it?" What use is a contract debt if the firm or company have no funds? These awards, in their opinion, should be paid out of the Redundancy Fund.

An important new principle has been promoted by the time off section of the Bill. Workers are to be given time off with pay to look for another job when the firm decides to run down the work force. If a worker finds another job and wishes to accept it the firm under rule 4 of the Third Schedule of the 1967 Act, are entitled to claim that, if he accepts the job, he is not entitled to compensation on the grounds that he has voluntarily left his employment. If a firm wish to prevent an employee from looking for another job, they may do so by not giving notice under section 7. There is an obligation on the Minister for Labour to ensure that section 7 operates in practice. If, in the situation of redundancy, a worker discovers another job and if the Act confers on him a right to look for an alternative job, the worker must be permitted to accept the new job, otherwise section 7 will be a fictitious benefit. It is necessary, therefore, to enable the employee to take up the job which he has been given the right to seek. Section 7, by implication, introduces two new disputes—that of the right of an employee to look for and accept a new job, and that of the employer not wishing to release him in time to accept it. The tribunal should be given more discretion than it has at present.

I have been requested to ask the Minister to look at amendment No. 19 which was discussed in the Dáil on 21 February and which will be presented again, to follow section 7. Section 9 of the Bill does not offer a solution to the problem where employers refuse to cooperate in a redundancy situation. Section 10 is an overdue amendment of the 1967 Act. In order to eliminate the scope for disputes it will be necessary to amend this section so that employers may not claim that the reduced hours of work do not have the effect of excluding workers under the 20 hour rate.

It is rather difficult to grasp the meaning of section 11. The people I spoke to believe this is mainly because of legislation, by reference to the amended section 15 (2) (a) which should have been included in the Bill. Rule (2) (a) was the trial period of two months in the Act of 1971 which has caused considerable trouble. Section 11 proposes to enable an employee temporarily to accept a change in pay or in hours of work for 12 months without entering into a new contract. This is a significant boon by any measure. In one of the hardship cases which proved the need for section 11, alternative employment was offered in England and when the employee accepted it for 11 months he lost his right to compensation. Section 11 does not give relief when a worker accepts temporary work in another place or if he accepts a different position on a temporary basis. This section would not apply to a Dublin worker sent to Galway or Cork. It would apply to a Cork worker offered short-time work in Cork. A suitable amendment will be offered at a later stage.

Section 12 forms part of an amendment proposed in the Dáil. In fairness to redundant workers who have already lost their appeal, the Minister for Labour should look again at section 8 of the amending Act of 1971. In the Limerick Health Authority dispute, the Ryan case, the Department decided to pay compensation out of a fund when the corrections were made in the Acts, although the case was decided against the redundant employee.

Section 10 of the 1971 Act, under which the employee was given certain presumptions as to continuity of service and so on, needs further modification. This has proved to be an important section but, again, the facts which are revealed to the tribunal are often stranger than fiction. This comment was made by a trade union official. The problem seems to arise if the employer's records are insufficient. Unfortunately for employees, verification of the records may not be available before the tribunal makes a decision.

This section should be amended to enable an employee to make a new claim for a disputed part of his service within 12 months of the tribunal decision. Where the employer's records are insufficient but where the employee produces verification of them. Taking the tribunal generally, where the employer is in clear breach of a statutory duty by not giving the notice which enables an employee to make a claim properly, the tribunal should have power to award some of the costs to the employee. The people who solicited my help in this said that explanatory leaflets are of little use to trade union officials appearing before the tribunal.

Provisions of the 1967 Act, as amended, which affect most appeals include: section 7, scope; section 15, alternative work; section 24, limit for making claims; and rules 4 to 7 of the Third Schedule, continuous employment. These sections they believe should be consolidated as one Schedule to the Bill.

The powers and functions of the tribunal are extending of necessity and further discretion is needed to facilitate the despatch of business. Where the employer is in breach of a statutory duty under a Redundancy Act, the tribunal should have power to award to the employee the cost of his appeal. This would reduce the number of appeals. Where the employer is unable to refute the employee's contention before the tribunal, the employee's assertion should be accepted. The tribunal should be able to make an interim award where it appears that the period of service is in doubt.

The tribunal has functions under three separate codes of law, namely the Redundancy, Minimum Notice and Terms of Employment and Unfair Dismissal Acts. It has to unscramble the claims and counter-claims made at the same time under all three Acts. It has power to extend the time limit in redundancy disputes but not when a juvenile worker has been unfairly dismissed, although he may not know it until he finds another job. The tribunal award under the Redundancy Act is guaranteed by a fund. The awards under the Minimum Notice and Terms of Employment Act are not guaranteed. Although the tribunal is expected to allow a defaulting employer to be subsidised by the social insurance fund when he is solvent there is no guarantee for the employee under the Minimum Notice and Terms of Employment Act where the employer is insolvent.

The 78 week rule, that is, the "interruption of employment" due to sickness or injury, is known to be defective when the employer goes into liquidation or where an employee is dismissed, while on sick leave, by an insolvent firm between the 26th and 78th week of illness or injury.

The word "interruption" implies that the employee when ill or in hospital, must resume work before the expiry of the 26th week. If the firm is not insolvent or if a notice of dismissal is not given, the employee has the benefit of 78 weeks' absence if he is seriously ill. If the firm is in a serious financial plight, the employee has only 26 weeks' grace.

The Minister for Labour is once again urged to make the Bill workable and to enable the tribunal to deal with disputes as expeditiously as possible. Both sides of industry are to be congratulated on the reputation which the tribunal have earned. That is something I am acknowledging despite all the difficulties the tribunal have. They are doing a good job in all the circumstances. The Minister should facilitate those union officials whose duty it is to appear before the tribunal by accepting the proposals to consolidate the work hours section of the Redundancy Act and to harmonise the scope of the rules in the Redundancy and Minimum Notice Acts.

That, by and large, is the way I was approached about the Bill and I tried to get it on the record as I got it from the trade union officials. As many of them read the Seanad debates, I aimed as far as possible at accuracy. It was not a question of knocking the Bill. It was a question of trying to get the legitimate criticisms of trade union officials who are confronted with problems on a day-to-day basis, trying to get it as accurately as possible to see if we can bring about amendments and to facilitate the Minister and his staff to bring about some improvements in these areas. It would be a much nicer task if one could talk about the means of preventing redundancy rather than talking about the effect of redundancies. Unfortunately, the scope is not within the Bill for doing that.

Even though the redundancies are down this year as against 1977 we should have regard to the fact that redundancy will always be with us. The pace of change in industry means that this problem will always confront us. It is part of the society in which we live. Consequently, we should spare no effort to ensure that the claims of workers affected by redundancy are processed effectively, particularly where firms are insolvent, taken into receivership or going into liquidation. If we do that, we can rightly say to the workers that we have done everything to facilitate them in this delicate area.

I welcome the Bill which is a very necessary and humane one. As Senator Harte has so rightly said, redundancy is something we are going to have to live with, something that will stay with us. The Minister, in his introduction, and many speakers have referred very clearly to the importance of alleviating the financial trauma to the individual and have pointed out that it is not solely a question of financial embarrassment. To someone who has been working in a job for five, ten, 15, 20 or 30 years it is an enormous crisis in that individual's life if he finds himself redundant, almost invariably through no fault of his own, and very often quite unexpectedly. As the Minister said, redundancy strikes a note of fear, in many ways almost more so than sickness or injury. That is one aspect of it and it is right that we should be concerned. In itself, it would justify our concern. In fact, there is far more to it than that. We should not regard redundancy solely in malign terms. It is, as Senator Harte said, going to stay with us. In some sense it is a healthy sign. It is vital for us, as a whole, most of all, workers, all of us involved in any sense in industry or development, that our industries mature and develop. It is essential that new industries should be introduced into this country. If that is to be done effectively, for the general health of the country, the health of industry, and the health and welfare of the individual worker, then it is essential that we have an effective, humane and good scheme of redundancy payments.

We are in a very different situation from the United Kingdom. In the United Kingdom there are a large number of decaying industries. From that point of view it is obviously important to them that they should have redundancy schemes. We do not have that background of industry. Therefore, on the one hand we have no excuse for not having effective redundancy legislation and, on the other hand, we must regard it very much as a challenge, not something which is used as a sort of umbrella or protection which, unfortunately, in Britain has led to so many ill-effects, particularly to the general fall in the efficiency of industry, to poor incomes and poor living standards. It is like a tightrope. On the one hand we must have redundancy payments which will effectively compensate the person involved and give him a worthwhile chance of a new start, or, if he is close to retirement, tide him through until that. On the other hand, we must not set up a situation in which the employer concerned is tempted not to let an employee go because of the redundancy payments involved or, worse still, to refuse employment to people because he is afraid of being involved in excessive redundancy payments—excessive in his terms.

It was introduced in 1968 when we were thinking in terms of free trade and this is the historical basis of it, as the Minister indicated. In general terms, far beyond the question of removal of tariff barriers, if Irish industry is to develop and is to be effective, if we are to introduce modern industries, we must have a proper redundancy scheme. Allied with that, it is very important that our retraining and relocation programmes be constantly kept in mind. It is not sufficient to provide a lump sum to a worker and say goodbye to him. It is a far more difficult problem to see that he has the opportunity of getting a job in another industry and has an opportunity to do the appropriate training. This in itself is quite an enormous topic and, I am sure Senator Harte would agree, a very difficult one.

I note that the fund income is anticipated to rise towards £9 million. It is a significant figure and one which is likely to increase. We should be happy to see it increased much further because it is for a scheme in which there is hope of development for the future. It is much more important and worthwhile in terms of society and the individual than unemployment benefit. Let us hope the day will come when there will be no need for such a thing as unemployment benefit but there is a continuing need for worthwhile redundancy benefits.

I am very glad to see that the ceiling has been doubled to £4,000. I cannot help thinking that that figure will need to be increased. I am also very glad to see that some of the complexity is to be reduced. It is very important in any such scheme as a redundancy scheme, which is so closely associated with the change from one industry to another, and so important for the individuals concerned, that it should be as simple and efficient as possible. I am glad to see that the Minister is to bring out a guidebook for our advice and knowledge.

One small matter is the question of the working week. I am glad to see that provision is going to be made for a reduction to 20 hours. Perhaps that will be further reduced again at some future stage. One very important point on which one or two speakers have commented is the question of time off. This is very closely related to the fact that for people who are made redundant it should not be the end of the road. Quite frankly, I should prefer far longer notice to be given by industries or companies which are considering redundancy. We should get away from the idea of considering it as something bad and should take steps in good time so that those involved will have the greatest possible opportunity to move to some other job, to get training for some other industry. They should be given every possible encouragement, not only in terms of finance and money.

The enlargement of the Employment Appeals Tribunal fits in with the Minister's very enlightened approach to this problem and his realisation that it is something to be tackled in a positive manner, with which, I am sure, we would all agree. There is the question of bankruptcy in certain firms and the relationship towards repayments and the situation of the State. This is a healthy improvement in that employees' rights should be safeguarded in all circumstances, particularly in the circumstances of redundancy.

I am glad also to see the very necessary and enlightened attitude towards childbirth leave. This is a part of the general picture. I have great pleasure in welcoming this Bill. It is a really worthwhile one.

I welcome the Bill. This Bill is part of a general rationalisation to relate employees' deductions to their pay and to relate employers' payments to pay. This is welcome because of the administration costs and because it relates the payment to the pay of the employee. In this case it has been decided that there will be no deduction from the employee. There is a case to be made for that because we should really look on this as an insurance paid by the employer for a liability he may have to face in the future. It is really the employer's liability. In the employer's case he is paying more but against that the lump sum has been increased. In recent times, in cases of redundancy, more than the statutory amount has been negotiated. If this happens again the employer will probably get a bigger amount from the State towards what he has to pay.

Generally speaking, redundancies are negotiated. If they were not it is more than likely that the rule, "last on, first off" would apply. The short-term employees would go first, possibly the younger employees. It appears that the notice required in the Bill should be sufficient. Sometimes in negotiations the long-term employees offer to go, in which case they must be given longer notice. Therefore, shorter notice should be sufficient in the case of employees entitled to less redundancy.

Senator Harte referred to cases of voluntary liquidation in which there were no funds. I look on this as being an insurance paid by an employer for a liability that he may have to face in the future. To a certain extent can it not be looked on as insurance for the benefit of the employee? If a case like that arises, is not at least 60 per cent payable to the employee? If that is the case, if the employer does not give the required notice and fill in the required form, he can be cut to 40 per cent. Now we are reducing the employee to an entitlement of 40 per cent. It might be better if that penalty on the employer was left out and some other penalty brought in against the employer for failure to give the required notice. An employee is entitled to certain notice. If he doesnot get that notice then he is not gone and the employer is liable to pay him up to the date on which he should go in relation to the statutory notice. I should like to know if that is correct.

I welcome the Bill and should like to refer to a number of points without repeating what has already been said. I have had experience of one of the AnCO programmes for managers and executives who have been made redundant. It is a very sad experience to stand in front of some 20 middle-aged people who felt they had safe jobs and suddenly found themselves redundant. I should like to commend the Department of Labour and the Minister for instituting the programme through AnCO, which is known as the Career Development Programme. Just in case Senators do not know about it, it means that individuals who find themselves without a job spend six weeks on a programme of development. They are paid while they are on this programme. The important thing is that individuals who have been accustomed to going out every morning to work and who suddenly find themselves with nowhere to go except to look for a job, can, by going on this programme, have some place to go. They can keep their heads in the air and get a new direction, a new sense of purpose. I should like to record in the House that more than 90 per cent of them, so far as I can remember, find new employment.

Many of them find employment before the programme is finished, which leaves them in the difficult situation of wanting to finish the programme and wanting to start work again. Sometimes I hear caustic comments about keeping people in employment artificially, but this programme is a positive approach to the problem. It provides an injection for people in the middle stage of their career, a reorientation and, very often, a new direction that gives them even more satisfaction than they dreamt of in the beginning. I have seen some of these people working on some of the shorter term projects that we have been playing around with in the inner city. That is another indication of how all of these activities can, in fact, come together in a positive way. For somebody who is very tired of the world and of a system which has thrown them out on the road after they have given 20 years of their life to some firm it can be a salutary experience to go to the inner city and see things that may be worse than their situation. In the process they can do something to rehabilitate themselves.

How does the figure of 10,000 redundancies compare with other countries? In industry if you take a figure of 300,000 employed, 10,000 redundancies is something like 3 per cent. As we are restructuring industry in a post-free trade area during the transition into the EEC, one would expect to know how bad that figure is.

From an employer's point of view, it is another bit of chipping into the added value that goes to labour in industry. There has been a gradual build-up of that over a period. I wonder what the employer's attitude is to a cut in the share of the added value which is left over after income. It looks like another .25 per cent. This is something that will go on for some time as negotiations between the labour share and the company share continues.

Has the Minister any information about the distribution of the 10,000 redundancies? I am interested in knowing how much of it is coming from Dublin as opposed to the rural areas? Are we winning? I think that we are and I hope we are. I welcome the Bill and look forward to Committee Stage.

Níl sé i gceist agamsa ach cúpla pointe a luadh anseo anocht. Tá sé ag éirí déanach agus táimid ag súil le freagra an Aire féin ar na ceisteanna agus ar na fadhbanna a luadh le linn na díospóireachta. Dubhrathas an-chuid le linn na díospóireachta agus níl sé i gceist agamsa dul isteach sna mion phointí ach caithfidh mé ceann nó dhó a luadh.

First of all, I extend a hearty céad míle fáilte to the Minister. He is a man who has done a tremendous amount of work since he took over the Ministry of this most important Department. His work has been acknowledged by everybody and we wish him continuing success in his onerous task.

I was taken by the first sentence in his speech. He said, "Redundancy tends to strike a note of fear". Never was a truer sentence penned by anybody. The great fear of any good workman is that the day will come when he will not be wanted any longer. Until recently, he could visualise that that would happen when he reached an advanced age. Somehow he has mentally prepared for the traumatic effect of reaching that age. Unfortunately, no matter how good a workman he is and no matter how dedicated he is, he cannot be unaware of the fact that, even at a comparatively early age, he will not be wanted any longer. In other words, he will become redundant. "Redundant" is a nice-sounding word but it does not ease the pain of that man's heart when he finds that he is redundant.

One point I would make more than anything else is that in this day and age we have to face the fact that people will become redundant before their time. One of the main things that trade unions, employers' organisations and the Department of Labour should face is the educating of men in industry and in agriculture to prepare themselves for a number of jobs, so that when the time comes they can switch easily from one to another and be able to say to themselves, "Even though I am not wanted in this job, I am not an outcast. I can still earn my living in another form of employment."

There are many excellent features in this Bill. I am sure they have all been dealt with by various speakers and I will not go into them. The Minister in his final sentence said, "I believe that the proposals in the Bill are worth while and useful and I hope that Senators can support them." Let there be no doubt in his mind that the proposals in this Bill are worth while and useful and I am sure every Senator in the House will be very glad to support them.

I thank the Senators for their contributions and for their general acceptance of the Bill. I will endeavour to refer to some of the points made by the Senators. I, too, share the concern that redundancy is preferably something that should be avoided. In other words, we should not have redundancies if at all possible but obviously we have to cater for them when they arise.

In relation to some of the points made by Senator Harte, I should like to say that I had discussions with both sides of industry and with the congress of trade unions, and I accepted many of the suggestions and amendments put forward. The House will also be aware that the Minister has a responsibility to balance the points made to him by both sides and to take into account the improvements that are necessary. I am satisfied the major ones are in the Bill before the House tonight. In the more detailed context Senator Markey referred to the adaption to free trade and the increased competition which, I believe, is still taking place. We have to be prepared for the redundancies that arise in that situation.

I want to take issue with the Senator in that he said there were no substantial changes. I do not agree with him, on two scores. There have been a number of substantial changes from early 1968 when the Redundancy Payments Bill was first introduced and became effective, to the present time, such as the passing of the Minimum Notice and Terms of Employment Act, the introduction of pay-related benefits, the establishment of AnCO, and of substantial changes in the introduction of pay-related benefits; in rebate provisions; in ceilings for lump sums; in the abolition of workers' contributions and the right to time off —which has been mentioned by so many speakers, and which, I believe, is a good provision.

On the lump sum aspect, Senator Harte and some other Senators have referred to the method of calculation. I want to make a few points on that. The first is that I have undertaken to revise the method of calculation at the end of one years's operation of the scheme when I will have had experience of how it operated during the first year. On the point that the position of the lower paid worker would be affected, we are satisfied from our investigation that, except in very isolated cases, there should be no worsening of the situation and, in the vast majority of cases, there should be substantial improvement. The latest figure we have, for example, for the average industrial wage is £72 for June 1978 and this includes men and women. I should add also that the calculation of redundancy payments is based on the reckonable earnings, including overtime, allowances and so on. It is not confined to the basic rate.

On the lump sums, let me say that the increase in the ceiling from £2,500 to £5,000 will benefit very substantially the vast majority of workers becoming redundant. It was, I think, Senator Harte who referred to my reply to a question in the Dáil where some weekly payments were as low as 3p or 10p—I am not quite sure of the figures; they certainly were low. This is one area where the lump sum payment will help. Of the thousand recipients investigated, 78 per cent were in receipt of either reduced or nil rates of contribution under the weekly payment and the remaining 22 per cent were receiving the full weekly payment. The ceilings, basically, operate on pay-related benefits and unemployment benefit.

Mention was made of care being taken in the treatment of individuals under the redundancy payments scheme. Desirable though that might be, it is difficult to discriminate between workers, as was suggested by Senator Markey. One must, of necessity, look at the overall situation. I should say also that the IDA, the National Manpower Service and AnCO have developed and are continuing to improve, arrangements for close collaboration on threatened redundancy situations.

Senator Markey asked me to tell him specifically why on the rebate rate a figure of 60 per cent was suggested. The reason was that the average rebate figure was looked at and 60 per cent is slightly below the average rebate figure; in comparison, in the UK the average rebate payable is 41 per cent.

Some Senators would prefer to see a longer period than two weeks given as time off. First, under the Minimum Notice and Terms of Employment Act, 1973, it is compulsory and obligatory for the employer to give the notice required under that Act. For the purpose of the Redundancy Payments Act we are suggesting two weeks which is a complete innovation. It is desirable and right that it should, at this stage at any rate, be kept within that two week notice period. I will come back in a moment to that topic, on which particular points were made by some Senators.

The ESRI Report was mentioned. After a thorough examination, the vast majority of the ESRI recommendations were included in the Bill before the House except for its recommendation on intermittent work. I have not followed the recommendation with regard to the building industry; I believe that two years to qualify is a reasonable minimum period. Senator Harte referred to this industry, but he would probably be the first to agree with me that there are difficulties in that particular area. He referred to the place of employment, and if one took it to the ultimate it could mean that a worker need never leave one particular building contractor but could move from site to site and qualify for redundancy payments each time he moved to a new site. There would be difficulties, there, into which we will be going in more detail on Committee Stage.

Senator Markey referred to favouring older workers in redundancy situations and encouraging the departure of young workers. The House is aware that this is, essentially, a matter for the employers, in consultation with the trades unions. These consultations take place and, understandably, arrangements are made between both sides to the best possible advantage of the employees affected. Sometimes in that situation the workers with long term service volunteer to go. It would be a bit unreal, perhaps, to load it entirely in favour of young people. It does, perhaps, give the young people the opportunity of continuing work at an early age.

I did say the Bill does not reduce compensation for the lower paid, as was mentioned by Deputy Harte. The formula remains the same and I will look at it in a year's time. The level of the lump sums will rise with the level of wages, subject to the ceiling, which is being raised very substantially from £2,500 to £5,000.

I have referred to the building workers and I have made the point that this will be discussed in greater detail on Committee Stage. The reduction in working hours from 21 to 20, brings the realistic half week into line with what is now the normal working week of 40 hours. I do not propose at this stage to make any changes.

Reference was made a number of times to the Minimum Notice and Terms of Employment Act and the Unfair Dismissals Act and to possible necessary amendments. It would be extremely undesirable that we should contemplate amending those Acts under this legislation; it would only make its operation almost unintelligible and create considerable difficulty in interpretation.

Some of the points mentioned related to difficulty in comprehending the existing provisions. I agree that some are complicated. However, I cannot agree to attempt, at this point, any partial consolidation. As I have said, I shall do something about that but it must be done in a well researched, safe complete way. I hope to issue a guide book immediately this Bill is enacted, which will be very detailed, specific and clear, giving the necessary information so that the ordinary employee and, indeed, anyone, will be able readily and easily to understand it. Section 7, on time off to look for work, has been referred to. This is a new concept. I do not agree with the comments made about difficulties being created; it does establish a right for reasonable time off to look for new employment or for training. Both sides, I am sure, will have faults to find with the interpretation. It could be difficult, perhaps, to decide or to interpret what specifically is legal. I have said that the employer should be entitled to be informed by his employee what appointments he had and where he was seeking further employment. With a certain amount of common sense on both sides and with the goodwill which is so necessary, this is a helpful and desirable section.

Sections 10 and 11 were referred to. Senator Harte said he would put down some amendments on these sections so we shall have an opportunity of going through them in greater detail on Committee Stage. I should say that section 10, with respect to short time, provides definitions for divisions analogous to those governing time off.

Short time is defined in section 11 (2) of the Principal Act as involving the reduction in weekly remuneration to less than half of normal. By section 11 (3), which was inserted in the 1971 Act, this definition was extended to include reduction in hours of work to less than one half of normal. I am satisfied that we shall have an opportunity of teasing this out in greater detail on Committee Stage and I welcome that opportunity. I assure the House that the provision of this section is advantageous and helpful. The same would apply to section 11 which deals with a situation of reduced working, or the remuneration not constituting statutory short time. The amendment to this section 15 (2) (a), in effect, extends from four weeks to 52 weeks the period during which an employee may try out non-statutory short time without losing redundancy entitlement. It certainly improves the situation.

I had detailed discussions with the Senators, and I have carefully considered all the points raised and, indeed, I have conceded many. As I have said, one must endeavour to balance the situation.

Senator Conroy referred to the length of notice. The two weeks referred to here are only for the purpose of the redundancy payments scheme. The Minimum Notice and Terms of Employment Act is obligatory and must be compiled with. The employer is obliged to give the notice to which the employee is entitled under that Act. The Protection of Employment Act under the collective redundancy situation gives notice to trades unions, in order that consultations might take place on the threatened redundancy.

Senator Harte referred to an untrained teacher situation. The point he is making there refers to a particular case and I do not think we should legislate here for a particular case. It arises from a controversial tribunal decision where an untrained teacher was replaced by a trained teacher. The Act provides that a redundancy situation does exist where it is necessary that work be done in a different manner for which the employee is not sufficiently qualified or trained. The tribunal held that in the case of an untrained teacher being replaced by a trained teacher a redundancy situation did not exist. This is an isolated case. The Act is well worded and should not be tampered with as the result of an isolated case. A tribunal might, in a similar case in future, decide differently.

Senator Jago spoke on the penalty of reducing employers rebate from 60 to 40 per cent. for failure to give notice. I think it was Deputy Mitchell in the other House who suggested to me that it was not severe enough. In the case of a rebate, say, of £2,000 the fine for lack of notice could be £400, and £2,000 is a fairly heavy penalty. If notice is not given, the 60 per cent is not granted; it is reduced to 40.

Senator Mulcahy asked for some figures for other countries. I am not too sure if they are comparable but he will be given the information requested. There was one point in the opening comment I made, that may be confusing. Mention was made that the figures varied from 3,000 to 13,000. What, in fact, I said was that the figure reduced from about 13,000 in 1977 to less than 10,000 in 1978. It was the first time since 1973 that the figure had been under 10,000.

That sums up most of the points I wish to make in reply. I hope the Senators will feel I have covered the situation and the points that were made. Again, I say that this Redundancy Payments Bill, 1979 updates and improves the redundancy payment situation, making many substantial and worthwhile improvements in the existing legislation.

Question put and agreed to.
Committee Stage ordered for Wednesday, 14 March 1979.
The Seanad adjourned at 8.10 p.m. until 10.30 a.m. on Thursday, 8 March 1979.