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Seanad Éireann debate -
Thursday, 29 Nov 1984

Vol. 106 No. 4

Protection of Employees (Employers' Insolvency) Bill, 1984: Second Stage.

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

May I begin by expressing my appreciation to this House for the co-operation they have extended to me in relation to putting through, in a way that I know is not terribly acceptable in the normal course of events, a piece of legislation of this nature or indeed any form of legislation. I do want to put on the record of the House my personal appreciation and I hope, in effect, the appreciation of all of the workers who will benefit from this legislation when it becomes law and when it comes into operation.

This legislation is being introduced for the purpose of implementing an EC directive but also in the interests of social justice for workers who lose their employment and are left without due rights because of their employers' insolvency.

Ever since it became publicly known that this legislation was being prepared, I have been receiving very many letters and representations from, and on behalf of, workers whose employers have become insolvent. These individual representations have underlined for me the extent of the loss being suffered by the workers affected by employers' insolvency and of the difficulties and hardship caused for them and their families. To be made redundant and have to face unemployment for any reason is a traumatic experience, but to be left without wages for the final weeks of employment and other due entitlements as well makes the situation even more intolerable. Even in cases where some assets are available for part-payment of workers' entitlements, under existing legislation, because of the operation of the legal processes involved, these payments can be delayed for months or years until bankruptcy or liquidation proceedings can be finalised. It is the purpose of this legislation to provide that workers' entitlements are paid in full and are paid quickly.

A view sometimes heard implies that worker protection legislation can itself be in large measure responsible for closures, insolvencies and unemployment. I wish to express my total disagreement with this view. Nor do I accept that the body of worker protection legislation which has been built up in recent years should now be jettisoned because of general economic and employment difficulties. On the contrary, it is in such difficult times that such legislation is most needed. That is not to say, however, that the legislation in this area should not be closely looked at and reviewed. It has developed over the years in an ad hoc fashion and experience of its operation has shown that in various aspects it needs to be improved. The work of reviewing all worker protection legislation is an extensive task but I intend to have this undertaken as expeditiously as possible given the resources available to my Department. The purpose of these reviews will be to look not only at the individual statutes but also at the overall implications of the whole corpus of worker legislation to see what changes can be made to make the law more effective and fairer for employers, for workers and in the general public interest.

The measures proposed in this Bill are particularly necessary in current economic conditions in which, unfortunately, many businesses have ceased to function, many because of insolvency. But even in an improved economic situation this type of legislation will be needed as some companies will continue to get into financial difficulties leaving their workers not only without jobs but also without their wages and other entitlements.

The Members of the House will be aware of the existence of an EC directive which contains measures to protect workers in insolvency situations. This Bill will give effect to the requirements of that directive and in a number of respects goes beyond these requirements. Among the payments to be covered are wages, arrears of statutory minimum wages, holiday pay, payments on foot of company sick pay schemes and entitlements arising under various worker protection legislation as well as unpaid contributions to company pension schemes. Workers have been entitled to claim for the benefits set out in the EC directive as from 22 October 1983 and I am providing in the Bill for the payment of claims relating to pay in insolvency cases arising on or after that date. Strong representations have been made to me seeking to have an earlier implementation date but this is not feasible for a number of reasons. As with all worker protection legislation, it is unfortunately the case that regardless of what implementing date is chosen some workers will lose out. In this case, the most objective date which can be chosen is 22 October 1983, the date on which the EC directive came into force.

Detailed provisions are set in section 1 to cover the various types of insolvency situations which can arise. This section also outlines the criteria to be used to determine when an employer will be regarded as being insolvent. As the date of the insolvency will be of vital importance for the calculation of amounts due, the Bill specifies, in section 4, the date on which an employer will be regarded as having become insolvent. Section 4 will also enable me to specify by regulations the circumstances in which employers who are of a class or description specified in the regulations are to be taken to have become insolvent. This provision will enable me to cover situations which might arise where no formal winding up or bankruptcy proceedings are initiated.

The EC directive to which I referred requires the setting up of a fund — referred to in the directive as a Guarantee Institution — which will guarantee the payment of employees' outstanding claims relating to pay and this requirement will be met by the proposed extension of the existing Redundancy Fund. In my view, this is the simplest and most satisfactory way of doing so. The extended fund will be called the Redundancy and Employers' Insolvency Fund and this retitling is provided for in section 2 of the Bill.

The Redundancy Fund is financed by way of contributions from employers, including the Government in their role as employers, and this will continue to be the case with the extended fund. Because of the already high level of expenditure from the fund in respect of redundancy payments, it was necessary to raise the employers' contribution rate in this year's budget. The increase in the redundancy contribution from .01 per cent to .4 per cent contains an element of .02 per cent to cover anticipated expenditure arising from the measures provided for in this Bill. This .02 per cent element of the contribution should guarantee an income of approximately £1 million in a full year. It is difficult to predict what the likely level of expenditure will be but the best estimates which we have been able to make suggest that an income of this level should be sufficient.

I have power under the Redundancy Payments Acts to alter the level of contribution should this be necessary. While some information is available as to the number of companies which are the subject of formal insolvency proceedings during particular periods, little information is available in regard to the number of employees involved or the extent and nature of their claims. Account must also be taken of the informal type of insolvency situations about which figures are not available. Given that workers are unlikely to be in a position or willing to continue to work for long periods without remuneration, I consider that in the majority of cases, claims in respect of ordinary pay should not be substantial. The experience in the United Kingdom, where a similar fund has been in operation since 1976, has been that the major items of expenditure for the fund are minimum notice and holiday pay and I expect that the situation will be somewhat similar here. The average period in the UK was approximately for two weeks of arrears of pay.

Section 3 provides that the Bill will apply to those in employment which is insurable for all benefits under the Social Welfare Acts. The effect of this will be that the benefits provided for in the Bill will be available to those who are covered by the Redundancy Payments Acts. At present these Acts apply only to persons who work 20 hours or more a week for the same employer, although employers pay contributions to the Redundancy Fund in respect of people who work 18 hours a week and over. 18 hours is also the general limit for eligibility under the Social Welfare Acts.

When the EC directive was being drawn up, it was foreseen that the position of those who were outside the social insurance system could give rise to difficulties in the context of the Guarantee Institution from which payments would be made. For this reason the directive provides for the exclusion in the case of this country of persons who work for fewer than 18 hours per week for one or more employers and who do not derive their basic means of subsistence from the pay for this work.

Arising from the changing employment patterns and the growth in part-time working and jobsharing in this country and throughout the EC the question of part-time workers vis-à-vis worker protection legislation in general is being examined. Senators may be aware of the discussions that are in progress on a draft EC directive to cover a whole area of part-time working.

The basic approach in this Bill has been to cover employees whose employers pay a contribution to the Redundancy Fund on their behalf. I am, however, taking power in section 11 to enable me to extend the protection being provided to cover other categories of employees should I consider this to be desirable at a later stage. I have also provided in the Bill, in sections 12 and 13, for the reduction of the thresholds operated in a number of other pieces of worker protection legislation to 18 hours. These changes involve a reduction from 20 hours in the case of the Redundancy Payments Acts and from 21 hours in the Minimum Notice and Terms of Employment Act, 1973 and the Unfair Dismissals Act, 1977. These changes will bring about a desirable harmonisation in the eligibility thresholds for protection under the various Acts and are also in line with present trends in European Community labour practice.

I already referred to the fact that section 4 will give me power to deal with situations where no formal insolvency proceedings have been initiated. The Bill envisages a major role for receivers, liquidators and similar officers who are referred to as "relevant officers", in cases where formal insolvencies have occurred. It is necessary for me to have power to appoint a person to perform corresponding functions in situations in which formal insolvency proceedings have not been instituted but where workers are still left without their due payments, for example where employers have gone away or merely ceased trading and effectively insolvent. The same power may be needed in exceptional cases of formal insolvencies where, for example, a liquidator has withdrawn or failed to discharge his or her obligations under the Bill. The power is contained in section 5.

The duties envisaged for relevant officers under the Bill mainly involve arranging for the completion of various forms and certifying that amounts claimed are due and remain unpaid. The various forms to be used are referred to in the Bill as prescribed forms and will be set out in regulations to be made under section 16 when the Bill has been enacted.

Sections 6 and 7 outline the payments which will be made from the fund. While the EC directive refers specifically to outstanding claims relating to pay, it allows member states freedom to adopt their own definition of this term. I am providing in the Bill for the payment of claims in respect of the following: wages, arrears of statutory minimum wages, holiday pay, payments on foot of company sick pay schemes, entitlements under the Minimum Notice and Terms of Employment Act, 1973, and Anti-Discrimination (Pay) Act, 1974, the Employment Equality Act, 1977, the Unfair Dismissals Act, 1977, civil court awards in respect of wages, sick pay, holiday pay or unfair dismissal and also outstanding contributions to company pension schemes. A limit of eight weeks will operate in the case of wages, holiday pay and amounts due under company sick pay schemes. This is fully in line with the terms of the EC directive. The directive also allows member states the option of setting a ceiling on the weekly amounts which will be paid.

As the measures provided for in the Bill are related, in many ways, to the provisions of the Redundancy Payments Acts, I propose to limit the amount of payments, where these are related to wages, to the amount provided for in the Redundancy Payments Acts. At present this limit is £211.54 a week. The existence of this limit will not affect lower-paid workers. I will, of course, be keeping the limit under review — the Bill gives me power to revise it and also to vary the period of weeks in respect of which payments will be made. A limit of 12 months' contributions will operate in respect of unpaid contributions to company pension schemes. As far as workers' contributions are concerned, payment will be made only in respect of amounts deducted from pay but not actually paid into the scheme. The payments which I am providing for in the Bill go further than the requirements of the EC directive in a number of areas — for example, payments relating to company sick pay schemes, unfair dismissals and pension contributions.

In addition to providing for the protection of workers' claims relating to pay, the EC directive also imposes an obligation on member states to ensure that the necessary measures are taken to protect workers interests under company pension schemes. Because of the wide variety of pension arrangements which operate, it was apparent when the directive was being discussed that movement in this area would take some considerable time. The directive does not require that pensions be paid from the Guarantee Institution and it also provides that the institution need not be liable for outstanding contributions to company pension schemes. I am very concerned that workers' interests under company pension schemes be protected but I have also to take account of the possible cost implications of any measures which I introduce. In this Bill, I am providing for the payment from the fund of outstanding contributions whether payable by an employer on his own behalf or where deductions have been made for a worker's pay but not paid into the scheme, subject to a limit of 12 months contributions in each case.

I have given very detailed consideration to the whole question of company pension schemes and in particular to the best means of protecting employees' entitlements under such schemes. I am satisfied that the best way to proceed is in the context of the proposals for a national income-related pension scheme which are at present under consideration by my colleague, the Minister for Social Welfare. It is only prudent to have the position examined in full rather than making some hasty provision in this Bill which could have very wide reaching cost consequences for the Redundancy Fund, and which might not afford full protection for workers' rights. The overall security of company pension schemes is one of the matters which will be considered in connection with the proposals for a national scheme.

The Bill provides in section 9 that persons who have applied for payments in respect of wages, sick pay, holiday pay or arrears of pension contributions may, within a period of six weeks beginning on the day on which the decision on the application was communicated to them, or if that is not reasonably practicable, within such further period as the Employment Appeals Tribunal considers reasonable, present a complaint to the tribunal that no payment has been made or that any payment made was less than the amount which should have been paid. This appeals procedure will not extend to entitlements under the Minimum Notice and Terms of Employment Act, the Unfair Dismissals Act, the Anti-Discrimination (Pay) Act, the Employment Equality Act, court awards, or in respect of arrears of statutory minimum wages under the Industrial Relations Acts.

In relation to the pension schemes area there has been some debate in recent weeks because of the unfortunate circumstances that arose in respect of a particular company in the midlands. I hope we will be in a position to move quickly to ensure that workers who have pension schemes in their companies make sure that the trustees who represent their interests are properly informed and indeed that they have a say in the appointment of such trustees because of the difficulties that have arisen in those cases.

The question of pensions is much broader and much larger than the measures we are dealing with in this legislation. The thrust of the legislation is to ensure that workers who are entitled to payments out of the proceeds of a company in respect of wages they have already earned — which is money that is needed for day-to-day purposes — do not have to wait in line with the other creditors for that essential form of income but can be paid as quickly as is administratively practicable from a fund that would be funded entirely by the employers contribution and that they can take their money from that fund in the normal way. Then I, as Minister for Labour, would step into their shoes in the queue and would wait for the liquidator to wind up the company and if there were sufficient assets available to cover, in whole or in part, the wages that were the legal due of the worker in the first place, those wages would come back into the fund to pay other workers who might be affected.

The essence of the entire Bill is to avoid what is manifestly an injustice where workers who have earned wages but who have not been able to collect them have to wait in some cases over a year before they can get basic income. This fund will avoid that injustice and will avoid it in the most efficient, effective administrative system that seems appropriate to us.

I readily acknowledge the urgency of this Bill but I join with the Leader of the House in deploring the scant treatment that we are permitted to give it today. There is no way we can give it the detailed treatment that it deserves.

Now that the Minister for Labour is here — a former Member of this House — I hope he will use his influence where possible to ensure that in future we will have the amount of time we deserve to discuss Bills.

I welcome this Bill which protects wages and other matters where employers become insolvent. The sudden unemployment caused by insolvencies causes trauma among the people affected and their families and valuable skills gained over a lifetime can be lost. The Bill represents a modest further step in worker protection. My remarks will be of a general nature and some of the subsequent speakers on this side of the House will pinpoint specifics as they have affected enterprises in their own constituencies.

I would like to indicate three areas where the State can help in the case of potential insolvencies. First of all, by ensuring prompt collection of PAYE and PRSI by the Revenue Commissioners. I will develop that point later. Secondly, by ensuring adequate controls by Government Departments over State-sponsored bodies and, thirdly, by the correction of an anomaly in the social welfare regulations which cropped up recently in the discussion on the Ombudsman Bill. One often hears about the power of trade unions and how they protect their members rights. It is true that trade unions have come a long way since the "Strumpet City" days, but the vulnerability of employees even if unionised is all too evident in insolvencies and liquidations. Many companies have gone to the wall in the private sector especially in the recent past but the liquidation of Irish Shipping — up to 1982 a profit-making State company — has highlighted in a dramatic way the vulnerability of employees in the public sector. Many employees in Irish Shipping have up to 30 years' service and I was glad to hear the Minister imply that he is looking into that case and the rights they will have.

As regards Irish Shipping the statutory redundancy entitlements on the face of it are abysmally small when compared with the lifetime of employment that has been invested by the workers in that company. Incidentally — this is only a passing reference — I remain to be convinced that liquidation was the correct decision in that case. As a member of the Joint Committee on State-Sponsored Bodies I feel that there were other options, especially a more realistic renegotiation of the chartering arrangements. I hope that the presence of the shipowners in Dublin at the present time will serve as a means to pull something out of the fire.

Employers normally wish to keep their companies in business. We do have fly-by-nights but, generally speaking, employers are as interested as their employees in keeping their enterprises going. But they can fail, for a variety of reasons, including bad management. Prevention is better than cure. Unpaid taxes, like PAYE and PRSI, can serve as a very significant warning signal that companies are in financial difficulties. A few weeks ago when discussing the report of the Joint Committee on State-Sponsored Bodies and the State-owned hotel group, OIE, the Minister indicated, in response to a suggestion I made, that the social welfare regulations would be examined with a view to changing them so that employees would be entitled to know if the taxes already deducted from their pay had been paid over to the Revenue Commissioners. The significance of that point is that if such a change were implemented it would establish whether companies had complied with their legal obligations in paying over the taxes to the Revenue Commissioners. That in turn would act as an indicator of their financial health.

On the question of social welfare regulations, recently we were discussing an amendment Bill in respect of the office of the Ombudsman. This arose out of something that the Ombudsman himself highlighted in the course of his work where a serious anomaly in the contributory old age pension scheme has become a source of complaint to him. Perhaps it is worth recapitulating what Mr. Mills said. His view was that old age pensioners had found that on reaching the age of 66 they had not the required average stamps each year to meet the social welfare regulations. Changes in these regulations, as we know, between 1953 and 1974 meant, in effect, that contributors who had paid more social welfare contributions are being treated less favourably than those who had paid fewer contributions over a shorter period. I realise this is not a functional matter for the Minister for Labour but I would take this opportunity to ask him to use his influence with his Cabinet colleagues, the Ministers for Social Welfare and Finance, to correct this inequity. This is one way the State can help in protecting workers' rights in respect of the delicate area of pensions.

Some companies go into liquidation or become insolvent because the management do not take effective action soon enough. As I have said, the non-payment of taxes almost invariably is a warning sign. It certainly was a warning sign in the case of OIE, as the Minister is aware, where there was £2 million unpaid taxes. If remedial action had been taken early enough the State, and therefore the taxpayer, would have had to pay less. Therefore, prompt collection by the Revenue Commissioners can actually assist companies to face up to their difficulties on time. I was a member of an earlier Joint Committee on State-Sponsored Bodies which reported on Fóir Teoranta in 1981. In the course of evidence Fóir Teoranta told the committee that:

The fact is that we continue to receive requests for assistance at very short notice. The reason for this would seem to be psychological. Many businesses experiencing financial difficulty will go to endless trouble to conceal their plight from creditors, bankers and financial advisers in the expectation that things will come right. The result very often is that irreparable damage has taken place before we become aware of the company's problems.

Employees can, and have suffered through insolvencies and liquidations because quick remedial action has not been forthcoming from management. This raises the question, of course, of disclosure of information to employees which itself is an area to which the Minister is devoting attention. In that context I was glad to hear him refer to the examination of trustees and the degree of information that would be supplied to employees in respect of pension schemes, because that is one of the main criticisms we have of this Bill.

If employees were told the score about their companies, they would be in a position to respond to save their companies and in so doing to save their jobs. At least they would get the opportunity to "have a go" to remedy the situation. Furthermore, there is a lot of untapped expertise in workforces which, especially in times of difficulty could be used to prevent insolvencies. In that context, I was on a radio programme recently discussing Irish Shipping. One of the employees of Irish Shipping was on the same programme. He specifically made the point to me that there is a pool of expertise in Irish Shipping which was untapped and, if you like, unasked for, by the management in that organisation. Irish Shipping is not unique in this respect.

If we had worker directors on the board of Irish Shipping it might have been an interesting alternative scenario to the one that has developed tragically.

I agree, and in that context perhaps the Minister when replying might indicate when he is going to extend the list of designated bodies. I know it is the Minister's intention to add certain bodies, but I look forward to our debate on that when it comes because it will afford an opportunity to review the experience of worker directors to date and perhaps to make suggestions for the improvement of that scheme.

As far as State companies are concerned the liquidation of Irish Shipping has raised a number of important issues. Here again the State can help. While the primary reason for the liquidation of Irish Shipping was a serious error of judgment by management, the case raised the ever-present problem of control of State-sponsored bodies. These bodies should be allowed control over their day-to-day affairs. I would be the first to defend that right. I worked for seven years in State-sponsored bodies before I joined the staff of UCD and I am all for day-to-day control by the bodies themselves. But when it comes to substantial policy decisions, and in particular to substantial investment decisions, then I suggest it is a prerequisite that departmental approval be forthcoming. That approval was not sought in the case of the Russell Court Hotel in Belfast — which is an OIE hotel. The Department were not informed. Also, the approval as we now know, was not sought in the case of Irish Shipping.

The Minister for Communications said recently that the days of the free ride are over for State-sponsored bodies. In so far as the bottomless pit syndrome infected the minds of the managements and boards of these organisations, I am glad that that is so. The State-sponsored bodies sector will never be the same again after the liquidation of Irish Shipping. Some benefits may well accrue from this. But I put it to the Minister, and through him to his Ministerial colleagues, that a thorough review of the control mechanisms in State-sponsored bodies should be carried out as a matter of urgency so that a traumatic and damaging event such as the liquidation of Irish Shipping could be avoided in the case of other troubled State-sponsored bodies.

Clearly there is a need for a thorough review and change of the control relationship in relation to substantial policy and investment decisions. The onus is on the Government to get their side of the House in order in that regard. Equally, of course, individual Ministers have the responsibility to ensure that the boards fully meet their trustee responsibilities. If these boards do not perform as they are expected to perform, they should be fired.

As matters stand, the Bill will take effect from 22 October 1983. However, the year 1983 was a particularly black year for insolvencies. We are again pleading with the Minister to make the effective date that of the final winding-up rather than the date the receiver or liquidator was appointed. There are companies which went into liquidation or receivership during 1983 and prior to 1983 but the winding-up has not yet taken place. In these cases, we would urge that the effective date should be the actual date of winding-up. Admittedly, this would cost money. The money has to be found somewhere as is also admitted. However, given that the Redundancy Fund as revealed by the Minister in the Dáil, is in a healthy condition, at a figure of £12 million, we feel that the renamed fund could bear the additional cost to cover more than those who will be covered from 22 October 1983. Many of the people who would benefit under our proposal are still unemployed and suffering a lot of hardship. Any additional State protection they can get will be welcomed. We intend to press this matter on Committee Stage. It is not a question of seeking an open-ended retrospective period but rather to make the Bill effective for the exceptionally black year of 1983.

In the other House the Minister calculated that the cost of covering employees affected for the ten months period from 1 January 1983 up to October 1983 would mean an additional £800,000 to £850,000. I know it is a question of judgment and of costs, but I suggest that against the background of hardship of these unemployed and the fact that the Minister as of now at any rate intends to apply this Bill from the latest possible date under the European Community Directive, namely 22 October 1983, an additional cost of less than £1 million can be borne by a healthy Redundancy Fund of £12 million.

One of the most disturbing features of insolvencies occurs where former employees not alone lose their entitlement under contributory pension schemes but in some cases do not even get their contributions refunded. I know the Minister is alert to this problem, and he has indicated his thinking up to this moment. It is clearly very unfair that they should lose their pension rights on the one hand and for those who are not already on pension to lose their contributions as well as losing their eventual pensions. It is traumatic enought to lose one's job but to lose one's pension entitlement on top of that is even worse. We have a duty to defend people in the 60-plus category who are made redundant before they reach pensionable age and in particular those who are already pensioners who lose their pensions in insolvencies. Again, there is clearly expenditure involved, and money has come from some quarter, and I know that this is a predictable line that the Minister will take and it is understandable. However, the generalised talk by the Minister about a national income pension related scheme at some future date is entirely inadequate in the present circumstances. There is, of course, provision in the Bill which fulfils the minimum requirement in the European Community Directive for the payments from the fund of unpaid pension contributions for a period of 12 months. This is a step in the right direction, but it goes nowhere near the type of protection that is required. Again, we will be pursuing the issue of pension schemes and pension entitlements at Committee Stage.

A Chathaoirligh, we hope to raise a number of points at Committee Stage, but I am happy to join in the welcome for this Bill.

I also would like to stitch into the record my general welcome for the principle of the Bill. It is a good Bill. It is a protective measure, and one of the immediate benefits I see from the point of view of the workers is that hopefully at last it will end the situation that where insolvency does arise you have the degrading and demeaning exercise of employees who have just been paid, hawking their cheques around from Billy to Jack in order to have them cashed, on top of the trauma of the knowledge that their jobs are gone. I welcome the measure because of the protection that it affords workers who become redundant when companies go into liquidation, and it is a measure not before its time, as has been acknowledged from all sides of the House and by the Minister, particularly coming in the wake of a litany of very well-publicised debacles and liquidations, insolvencies, etc. As the Minister said in his speech, too often companies just disappear overnight. Too often companies have gone into liquidation and are continuing to go into liquidation, where there are no assets or insufficient assets to meet the requirements and demands therefrom. Too often in the past — and in the past employees were the important people in this type of exercise — people have had to take their place in the pecking order and very often have had to wait for a period of a year before they got their entitlements.

It is a comprehensive measure. It is a very thorough measure. As the Minister said, it covers all possible contingencies such as wages, holiday pay, sick pay, minimum notice, etc. The Bill is also extremely welcome in that it clarifies insolvency, when exactly the date of insolvency occurs and what is meant precisely by insolvency. Very often, as the Minister said in his Second Stage speech, there is no formal winding-up process, and the Bill covers this. The funding and operation of the Bill are based on the Redundancy and Employers' Insolvency Fund of £12 million. The fund is contributed to totally by the employers.

There has been some criticism that the Bill applies only to employees who work 18 hours or more. I think it is a particularly fair norm. It is a fair average particularly when one takes into consideration that it is the average which applies for a social welfare entitlement and that it effectively effects a reduction on the pervious 20 hour norm. The maximum amount of £211.54 per week is fair and equitable by any standards.

The operative date of the Bill, 22 October 1983, has been criticised in the other House and in this House. In the other House, as in this House, there has been a case made for winding-ups which have not in fact concluded in 1983 or as of now to be included but from the Minister's viewpoint I think the safest and fairest way is to adhere as closely as possible to the dates and specifics set down in EC Directive 89-87. Pensions, again, are covered partially. We all share the apprehensions of Senator Hillery in this regard. We do welcome the Minister's assurance that his colleague, the Minister for Health and Social Welfare, Deputy Desmond, is working on an integrated income-related pension scheme and pension fund and pension plan. We look forward hopefully to the early rather than the later introduction of this. The measure therefore is to be welcomed. It should certainly eliminate the panic which invariably ensues in the case of such insolvencies. It does give quite a substantial degree of protection, and one aspect in particular that I welcome is that the Minister keeps unto himself the necessary flexibility to adjust and upgrade and revise the limits and the guidelines from time to time. I therefore wish again to record my endorsement of the measure.

I would like to make a brief contribution, if I may. I do not wish to cover the ground that has already been dealt with. I, too, welcome the Bill. It is right that we should try to adapt legislation to our changing circumstances, and this whole area of the legal position of workers who find themselves suddenly without a job through insolvency undoubtedly creates not only many problems and anomalies but also genuine hardship, especially for lower-paid workers. It is right that we should be setting out to try to deal with that situation. I cannot resist making, if I may, the sort of political point that whatever about the other merits of the date, 22 October, at least to me it seems appropriate in the sense that it is the date of the EC Directive and as far as I can judge, the only reason why we are getting the legislation now is because there is an EC Directive. I wonder how long we might have had to wait if there had not been the EC Directive. Would we have to wait another one year, five years, ten years? We are being appropriate and being honest in saying in fact that the EC have, if you like, twisted our arm in order to bring about this measure to deal with the situation. It is right that we should recognise this because at times, when we become more and more accustomed to the criticisms of the EC and to long debates and so forth about the ways in which national interests are fought out in the EC context, it is no harm to remind ourselves that the Community has also been a very positive force for much good. Many of the measures and many of the laws, some of which are even touched on elsewhere in the Minister's speech, and many of the changes in the labour area had their origins in various EC proposals and directives. It is no harm to recognise that fact. That is one of the points I wish to stitch into the record, that we should try to see in a more balanced way the activities associated with our membership of the EC.

Coming closer to home, I must say I am also glad to see a measure of this kind coming in if only because it will get rid of some of the very ill-informed comments which are made when any liquidation does arise. I will refrain from going into situations but I am sure many people read comments in one of our leading newspapers in the last week or so on the Irish Shipping liquidation and deploring the circumstances in which some of the crews found themselves. We all recognise the hardship which is caused there and it is right that we should now be getting new legislation which can deal with that type of situation but what was wrong was to read editorials in leading newspapers inviting people to break the law. That is what they were suggesting — why did the company not, in its dying hours, make arrangements to pay people, for instance, to pay the shipyard in France who were carrying out repairs, apparently not realising that had they done so, they could all be up on charges of fraud under the existing company law.

Whether or not we like the laws that exist we have to recognise that laws, when they are there have to be operated. The correct approach is to change laws which we feel are no longer appropriate to the circumstances. That is the essential point I wanted to make.

The Minister's speech touches on another aspect of the general question of how and where we need reform of the law, namely the problems created through inadequate supervision or management of pension funds, perhaps by trustees who are not sufficiently familiar either with the legal situations of companies or with their current trading circumstances. The sooner we can press on with reforms in that area the better.

That reference to pension funds involves another Department, the Department of Social Welfare. If we get on to the kind of reform which the Minister has spoken of and the type of reform I have mentioned because of the provisions of the prevailing company law you will have to bring in a third Department, the Department of Industry, Trade, Commerce and Tourism, because that is the Department dealing with company legislation. I shudder at the prospect of three Departments trying to get together with their respective legal advisers or representatives to come up with a comprehensive package.

I do not wish to advocate delay but I wish to suggest that any reforms proposed should now try to get us a modern, up to date set of legal provisions which will deal with the activities of companies. It is important to remind ourselves that the entity which we work with so freely and which we accept, the limited company, the company that has its various activities and obligations specified by legal framework, is a comparatively modern invention. It is not much more than 100 years old. It was devised to suit what was regarded as the appropriate circumstances of the mid-19th century. It has been reformed or updated on a number of occasions — I think it was three times this century — but I do not think many people would suggest that, in their present form, the laws covering the operations of companies in this country really reflect contemporary circumstances. If there is to be a package of reform, please try to make it suitably comprehensive. Let us not have bits coming from Social Welfare to try to deal with pensions, bits coming from Labour to try to deal with specific redundancy problems and bits coming from Industry, Trade, Commerce and Tourism to try to deal with some of the other points.

There is another aspect regarding why we might need this kind of comprehensive reform, and that is while we are rightly concerned with the hardships caused to employees who suddenly find themselves deprived not only of their jobs but even of their payments, we should not lose sight of the problems caused for the other creditors of firms. Many of the policies not only of Government but of Opposition parties speak of encouraging and, by various incentives, set out to encourage enterprise. You set out to encourage people to start up businesses to provide employment for others. Ask yourself what of the situation of many of the small firms who supply goods and services to another firm which suddenly goes into liquidation? They find themselves in just as bad a position as the worker without a job. In fact, in many instances they find themselves in a worse position because nobody is going to pass a law which says they are entitled to X number of weeks wages or they are entitled to have their pension contributions paid for 12 months. In fact, they will not have any pension contributions and, worse still, depending on whether it is a small business and on what kind of awareness they had of their legal obligations, they might find themselves losing a lot of their personal assets, even their family home, because they may have used that as security to finance what they regarded as a basically sound, viable business, which is now going to become insolvent through the failure of another company with which they were trading.

We talk about enterprise and we encourage it with one set of measures and then, through the way in which our current legal system operates in other areas, we are saying to people, "You would be really a damn fool to set out starting a business of your own because you will end up in a far worse situation: there will be no protection in insolvency; there will be no redundancy payments; there will be no coverage for your pension or other things". If we are trying to run programmes like enterprise development programmes we ought to try to fit them into whatever type of reformed package we wish to operate to reflect our policies and our values as we enter the closing years of the 20th century. Reform, I hope, will be comprehensive. Meanwhile, we cannot wait for that comprehensive package and I welcome the fact that, thanks to the activities of the EC, we are getting a specific proposal to deal with one specific area of hardship.

I do not intend to speak at any great length about this matter. I will try to be brief. What has been said has been said very appropriately. I welcome the Bill. I welcome the clear statement made by the Minister. I noted his compassionate reference:

To be made redundant and have to face unemployment for any reason is a very traumatic experience, but to be left without wages for the final weeks of employment and other due entitlements as well makes the situation even more intolerable.

To me that is a key sentence. I have had the experience on two or three occasions in my working life of having no job. I know what it means. When I was presented from time to time with workers who were without work — even those not in an insolvency situation — I, as their trade union representative, found this an unnerving experience, working without such legislation. It bites deep into one's bones to look at the faces, the strain, the anxiety, the feelings of despair, especially if the breadwinner is involved.

This is the sympathetic motivation behind such legislation. Senator O'Donoghue has stolen some of my thunder about the European Directive. This legislation has come out of Europe. There is no doubt about that, but it is unfortunate that we have had to wait for it until the middle of the last quarter of the 20th century. It is a pity we did not look at the British involvement in 1976 because the lack of this sort of legislation is one of the gaps in worker protection legislation. It is a very serious matter to people like myself who are very close to the problems, but for those who are not close to it, it does not matter very much. There was this kind of face of capitalism at work of not bothering very much about these situations. This is being corrected and I commend the Minister for acting swiftly.

I also have words of praise for the Members of this House in their attitude this morning on the Order of Business as to how we would go about getting this urgent matter through as quickly as possible. I cannot forget the discussions I had both in Geneva and in this country when the ILO representatives came to our ICTU conferences. This kind of legislation was always discussed with the ILO. It is not without significance that the ILO head office where I have been several times is in Geneva, in the middle of Europe. We will benefit in many ways from the pressures exerted by the continental trade unions as well as by the British and Irish trade unions on the ILO and in that way, on the whole European Community. I am in no doubt that these are some of the progressive measures we will enjoy in the arena of worker protective legislation. I am glad the Minister has made the clear statement that legislation in this area has developed over the years in an ad hoc fashion and that experience of its operation has shown that in various aspects it needs to be improved. He went on to say that the work of reviewing all worker protection legislation is an extensive task and that he intends to have this task undertaken as expeditiously as possible given the resources available to the Department. The Minister is to be commended for having stated so clearly what his intentions are.

I shall conclude by referring to the closing words of the Minister. The Bill will go a considerable way towards easing this hardship, the hardship of facing the reality of redundancy, and the possibility of no wages or other moneys that may be due in an insolvency situation. The Bill represents a very significant desirable addition to our code of worker protection legislation. I commend it to the House. The Minister has asked for unanimous adoption of the Bill. I agree with him on that. There should be no controversy about this Bill. It is all right that there be some minor criticism but there should be no deep controversy. It is a non-controversial Bill and it is necessary and vital in the area of worker protective legislation.

I should like to welcome this Bill, which establishes a fund from employers' PRSI contributions in order that workers who lose their jobs because of insolvency may be reimbursed for their wages, salaries, holiday pay, sick pay or whatever benefits they may be entitled to. We on this side of the House are not trying to be in any way political about this Bill. The Minister is probably one of the few members of the present Cabinet who still has an attitude of compassion, and all we would try to do here is to enhance his reputation by doing a little more in a few places. The last couple of years have thrown up a lot of very disturbing situations. Individuals have suffered the trauma of not just losing their jobs but also of finding, having contributed substantially to pensions and in other ways, that there were no funds available to assist them. We have tended always to leave over to other legislation provisions that should be included in the legislation of the day. When a Minister is asked about a certain provision being included, the reply often is that the matter is one for other legislation. While these statements were made genuinely at the time, the result has been that various measures have not been implemented and that when we get the opportunity of a Bill like this we are inclined to use it to the maximum extent to cover the disturbing features affecting individuals and companies throughout the country.

The argument is usually advanced as to where the money is to come from for the implementation of new provisions. That will always be a difficult question. We contribute enormous sums to maintaining security along an artificial Border even though we come up against the intransigence of others who have a greater responsibility but who will not move. I read in yesterday's paper that the Minister for Justice said it is not the responsibility of the banks to contribute towards the cost of security, of transferring funds from one bank to another since they are not accountable for terrorism. They obviously are not, but they certainly should operate their systems in a way which would reduce the load on the State in the provision of this type of security.

There have been instances of companies closing down overnight and owing sums of up to £2 million in PRSI, income tax and so on to the Revenue Commissioners. Those of us who are very small employers would find ourselves receiving letters every couple of weeks from the Revenue Commissioners about one or two employees if we happened to be in arrears from time to time. It is incredible to find that some individual companies over the years can build up to a stage where such huge sums are due and leave ordinary workers not alone not having the knowledge that this is happening but in such a vulnerable position when a company collapses.

There is the added factor that we have failed to introduce the legislation of the Fourth Directive as it relates to company law with the result that we still have fly-by-night operators, unscrupulous individuals setting up companies, becoming insolvent and not just starting up in other businesses but restarting in the same line in which they became insolvent previously. When the ordinary people of the country look at all this and ask why we cannot find sufficient scope to cover the areas we would like to see covered in this legislation, they are not given answers. It seems from looking right across the board at what is happening that there is a lot which could be done to improve matters if we could get more co-operation not only here at home but from the British Government as well.

Existing laws under the Companies and Bankruptcy Acts, give priority to worker claims but unfortunately what is written down in law is not capable of being put into effect if the individual company have not sufficient resources to meet these legal requirements. The Minister might indicate when the legislation for the updating of company law will be introduced. That legislation is long overdue, and it will have its own bearing and effect on the necessity for the use of this legislation.

I referred in my initial remarks to individuals who would want to see this legislation cover very particular needs. It is always very difficult to introduce legislation on the basis of catering for individual circumstances. There was the case in the other House for Kilrush Ceramics. We had in our own constituency the Castle Brand trauma. The town of Nenagh which depended for over 50 years on this industry was rocked by the news of its going into liquidation. That was followed shortly afterwards by the tragic news that whereas there was £190,000 contributed to the workers' pension fund by the workers, that fund in effect had been reduced to £76,000. Other speakers have tried to indicate the trauma and loss this is to individual employees, many of whom have given almost a lifetime of service to the company and who were moving towards their retirement years having made their own contribution, not only in terms of finance but also through their skills and efforts to give this company an international reputation which was second to none. Not only has a considerable proportion of the pension fund disappeared but the very fact of that difficulty being there is a stumbling block towards negotiations to get new interests involved in restoring the company and providing worth-while employment in an industry which I believe can and should be viable. Obviously we are trying to persuade the Minister in some way to try to cater for this and other similar situations. It may be difficult in this legislation to do it but perhaps he could go some of the way, either by indicating the way in which that situation could be catered for in other legislation or by including it here. We are not standing hard and fast as to how it should be dealt with so long as it is dealt with.

The urgency of this Bill has already been referred to. I would therefore like to ask the Minister, assuming that he gets all Stages today, if that means that an attempt will be made to have payments that are outstanding made by Christmas, or does it mean that it will take somewhat longer to get the necessary procedures into action? I would ask him if it is technically possible to ensure that these payments are made prior to Christmas.

I would conclude by generally welcoming the provisions of the Bill. We had really no great argument against its general principles. What we would like to see happening is the extension and widening of the ambit to cover individual traumatic situations which have happened in the past couple of years, and also some indication from the Minister as to whether this Bill or impending legislation could solve these problems for us, in which event our opposition to individual sections of this Bill would obviously be reduced.

I do not intend delaying the House. I agree with Senator McGonagle that the Bill is non-controversial in the sense that it protects and is designed to protect the employees' interest. Whether we serve in advice clinics or elsewhere we encounter far too many problems relating to holiday pay, minimum notice and so on. There are also the many problems created for workers in respect of the limited conditions applying to receiverships.

The Bill has to be welcomed from the point of view of the reduction in the weekly threshold. This also presented some difficulties to trade union officials down through the years. It is very good to see being regularised a situation where a lot of controversy has existed.

I did not hear the Minister's speech but I am a little concerned about what happens where no formal winding up or bankruptcy proceedings are initiated. Will employees in such situations have the same lien on the funds as a creditor who could put the company into receivership would have? What is the situation in regard to the resources left over? Will the fund be able to cope with situations of that nature in the sense of its being adequate to cover the broad spectrum where events of this nature occur?

It is right to say, even though this is not a recruiting forum, that in the present economic conditions where there will be more redundancies it is not only timely to bring this type of legislation forward but it is very commendable that the date of the EC Council directive is being taken as the date for the retroactive function of the Bill. Despite that, it should be borne in mind that people, though they know what the law is about now, still have great difficulty when a company is put into receivership. The Bill expresses in a much more effective way than heretofore where legal rights lie. Therefore, they can act with more certainty. However, in cases where there are workers who are not always in a strong position — unorganised workers — there will be the problem that they do not know where to go, who to see or what to say, despite the fact that the law is quite clear. In those circumstances people would be well advised to get themselves into trade unions who are experienced in dealing with these situations.

It is a shattering experience for somebody to be told suddenly that the person who had the power of debenture is the person with the power to put a company into receivership and that then there is little that can be done except follow the law. Where there is no guide to follow the law, despite the comprehensive nature of the Bill, it is very essential and very wise for workers to get themselves into an organised position where they can be more effective when following the procedures in the Bill.

The appointment of a receiver is a most serious development. It would be encouraging to know that if we were to introduce company law that would give some protection in the event of companies being put into receivership. Senator Smith has made this point. There are other areas, too, but I do not want to go into too much detail on company law that will have a bearing on protecting rather than on compensating people in companies in receivership.

The Bill does not change the question of the secured creditor. He will still be the person who will put the company into liquidation. The Bill itself will provide the necessary protection in the sense of compensation but there is some company law needed to give some protection to people who find themselves in receivership situations as a result of the cowboy activities of certain people. As Senator Smith rightly says, such people possibly come back into business under another guise or in fact even into the same type of business.

Therefore, if we set out to ensure that people are compensated, we must also provide for some sort of protective element so that there is a reduction in the number of people finding themselves in these situations. That can be done by way of legislation. We cannot do everything by way of legislation but we can take effective measures in many areas, and in this particular area such measures are very necessary.

I welcome the Bill and I compliment the Minister on the time and effort he has put into it. It has been a very good and comprehensive effort.

As has been said by previous speakers, to lose one's job can indeed be a very traumatic experience not just for the individual but for the family as a unit. Indeed it has happened many times that whole neighbourhoods have lost their jobs because there has been a tendency in many areas for entire communities to work in certain industries. The whole experience of job losses in such circumstances can be traumatic and can have great social implications for both the individual families and the communities as a whole. No amount of compensation, no Government Bill, no payment of any kind will make up for such loss. Obviously compensation will be a help, and this is what this Bill is all about — to soften the blow, as it were.

The Bill is designed to protect employees' interests in regard to pay in the event of their employer becoming insolvent. The Bill is positively a further benefit in the area of worker protection, but certainly no worker can say that his job is safe.

As Senator Hillery has pointed out, Irish Shipping were trading profitably in 1982. We know the plight of that company today. Neither in the public area nor in the private area can anyone sit on his laurels and expect to have a safe job for the rest of his life. It just is not that way any more, regrettably. The Bill has become necessary as a result of an EC directive, but I wonder if that directive was appropriate in some ways to Ireland. From the point of view of our record being so bad, perhaps the Bill could be amended in some way. I understand that Senator Hillery will be suggesting some amendments. For instance, we could do with an element of retrospection in this Bill. We can go back as far as 1980 but a compromise seems to be reasonable rather than a starting date of October 1983. Why not have it start from January 1983?

In my own town I have witnessed some of the trauma I referred to. We are very pleased in the Athlone area that we have done reasonably well despite the very severe financial and economic recession. As the Minister is aware, in the past few months 67 employees of Gentex have been laid off twice. The liquidator was called in. Gentex has not just been an ordinary company. For Athlone and for Athlone people it has been a way of life, but this situation has now ceased. The liquidator was called in, no redundancies were paid and the union in question, the FWUI of which the Minister is a member, took up the case and appealed it to the Employment Appeals Tribunal. They in turn sat in Athlone and they allowed the appeal. The Department of Labour subsequently paid out redundancies of varying amounts and all of which were gratefully received and very useful indeed. It was only right, legally and morally, that the money should have been paid.

These people, too, will become beneficiaries within the terms of this Bill. I do not know the exact amounts they will receive but I sincerely hope it will be sufficient and that it will add further to the comfort of their lives. How long will the 67 people I have referred to have to wait for their money? So far as we are concerned on this side of the House we are only too anxious to facilitate the passage of the Bill. My colleagues and I are very keen to do so that the money can be paid out. I believe and hope that the Minister can co-operate with the unions or with the employees in question and ensure that payment is made before Christmas. My hope is that as a result of a speedy passage for the Bill here today, the Minister can act Santa Claus and bring finance to these people before the Christmas holidays.

I welcome this Bill. I understand the sadness that the workers and their families have suffered. The need for the Bill is quite clear. The Minister stated this morning:

Strong representations have been made to me seeking to have an early implementation date, but this is not feasible for a number of reasons. As with all other protection legislation, it is unfortunately the case that regardless of what implementing date is chosen some workers will lose out. In this case the most objective date which can be chosen is 22 October 1983, the date of the implementing of the EC directive.

That directive has been in existence, I understand, since 1983. So I repeat here this morning my support for the representations and speeches and requests that Deputy Brendan Daly made in the other House. I ask you this morning to change that date from 22 October, 1983 to 1 January, 1983 or, indeed, even to 1 April, 1983 because I am specifically talking about the effects that would have on 90 workers in west Clare. He spoke at length and he made some representation on it, and, indeed, it was a pity that the other Clare Deputies did not follow what they said when it came to voting later in the day on that issue. I hope that one or other of the Clare Senators will do so later on when amendments come before the House. As a former Minister for Labour, Deputy Daly knew what he was talking about. So he knows it is possible.

I support the glowing tributes that Senator Smith paid to the Minister this morning, providing we get action this evening from him. In the Kilrush Pottery factory we are talking about £25,000 minimum notice holiday pay money. The Minister might not know but I am well aware that he made commitments to these workers when he was in Clare campaigning in the EC elections for his Munster colleague on the Sunday of the Fleadh Nua. He met some of the workers on that day and they came away believing that he was going to look after them in some way. I hope the Minister will keep the promise made to them. I do not know in what way the Minister gave the promise to them, but he certainly gave them the impression that he would help them. I do not know the time of day when the promise was made. That might have some bearing on how much the promise meant. If I do not intend standing for Clare I still think I should at least look after the Kilrush workers in west Clare for Deputy Daly's sake. When Senator Hillery puts this amendment here this evening I would ask the Minister to accept it and to bring back the date to 1 January 1983 or to 1 April, 1983 so as to cover workers who have been caught. There are a few of the last supporters of Labour in that group. So, the Minister should do some thinking during lunch time and he might give in here when he did not give in in the other House. We are more gracious in the way we ask for things here, so the Minister might remember those people and back date the Bill even at this late stage.

May I first of all thank the Senators for the contributions and for the generous support that they have given to this measure? A number of specific items have been raised and I will try in sequence to deal with them. First of all, I compliment Senator Hillery for the range of his contribution and for setting this measure within the framework of the need to look at work protection legislation generally. I know that on Committee Stage we will deal with a number of points that are relevant to his contribution, but with respect to the tragedy of Irish Shipping can I just say that attempts to re-negotiate the charter arrangements were extensively undertaken before the decision that the Government finally took was made. In fact, efforts were made over the course of an entire year. I share the view that if there had been worker representation on the board of Irish Shipping in line with the representation that there is in other companies, particularly Aer Lingus which got into difficult circumstances as well and managed with the co-operation of its work force to turn around its operations in a very successful manner, perhaps a similar possibility could have been developed and extended in Irish Shipping. In response to the question as to when I propose to bring in the legislation to extend the worker participation legislation, we are currently in discussions with the parliamentary draftsmen, and it would be my intention and expectation that it would be circulated and taken in the next session.

I share the view and will convey it to the Minister for Finance about the tardiness of the Revenue Commissioners in not collecting money at a regular time and fairly promptly, because this allows what would otherwise be a very effective early warning system to go without the opportunity of availing of it plus the fact that the cash flow implications are inherent in this as well.

I would like to thank Senator Higgins for his welcome support for the Bill and for his encouragement in having it enacted as quickly as possible.

Senator McDonald's contribution, as has been the case on previous occasions, was particularly incisive in relation to the balance between the need to reform company law in general and to maintain some level of compensation balance between the extension of workers' rights on the one hand and the extension of the rights for creditors vis-à-vis small companies. We are in effect doing two things in this Bill. We are protecting the rights of workers in one sense by means of a fund which will be funded by the employers. In so doing we are also giving the workers de facto a preferential position compared with that of small creditors many of whom go into subsequential bankruptcy following on the insolvency of a major company.

The reform of company law which was raised by a number of Senators is something that we will deal with, particularly the fly-by-night company director that has frequently enough been seen. They are not by any means the normal kind of company director that is the experience of our mixed economy, but they have existed and they can still legally exist where they can close down on a Monday and open on a Tuesday and essentially trade in the same area. I should tell the House that the Cabinet are currently reviewing a substantial memorandum on the reform of company law which will make some provision for the Fourth Directive, referred to by Senator Smith, and which will give the House and, indeed, the other House a substantial amount of legislative work to do. As Senator O'Donoghue said company law has only been reformed once or twice in this century and in fact it is only about 100 years old. There is a lot of technical legislative work in which the expertise of this House will be called upon to help the Government and the Civil Service in getting the right kind of company law that is appropriate for the last 16 years of this century and hopefully will take us into the first 25 years of the next century.

In that context, he raised the question of pensions and, indeed, other Senators raised the question of pensions and why it was that we were not addressing ourselves to the problem of pension fund contributions and the continuation of pension payments after a company goes into insolvency. The answer is that it is a complex area and, in particular, the fund contributions for this measure would come exclusively from the employer. I do not think that anybody is seriously suggesting that pensions and the receipt of pensions should come from a fund that is not contributed to by both the workers and the employers. The consequences of trying to extend this fund into the ongoing pension payment until the termination of life or whatever the conditional pension might be out of a fund that was exclusively funded from the employers would seem to me to be inequitable. It would also have an enormous cost implication on the size of the employer contribution that would be required in the fund.

The other point made by Senator O'Donoghue was in connection with the EC and the "Godfather" role the EC is having not just in relation to this legislation but also in relation to other legislation.

We have referred to the role of the EC in all of this and we have taken the date on which the directive became a legal obligation upon the member states as the commencement date for this legislation. I will return to that later. It points out the very positive social contribution in some areas of social legislation that the EC has been able to provide within our society.

Senator McGonagle's political and trade union experience underscores the need for having this kind of measure. On the one hand, when a company goes into insolvency the trading companies who are affected by that insolvency are not exclusively affected by it. Presumably they would have other customers and presumably they are in a position where if they are trading profitably they can carry on until such time as the liquidator can make arrangements to come to a settlement on outstanding moneys due to them. That is not so in the case of workers who are exclusively working for that company and who have allowed an average of two to three weeks of arrears of back money, wages and salaries, to try to assist the company in the first instance to continue. They find that their money, essential income, is stopped and they have little or no prospect of receiving it. The trauma of that reality on top of the tragedy of losing their jobs is frightening. Senator Fallon referred to it. Legislation is long overdue and it is to the shame of our political society that we have not introduced this legislation much sooner than we are proposing to do today.

Senator Smith raised the question of the role of the Revenue Commissioners in a vein similar to that in which Senator Hillery spoke, and he talked about the cost in administering the scheme and the difficulties we have currently with our nearest political neighbour in relation to policing the boundaries of a state which generates problems for security in our own State. I would be very much in sympathy with the sentiments that he expressed in that regard, and I hope that the ongoing discussions that will take place between our two countries will attempt to resolve that problem and reduce the disproportionate burden of cost that the citizens of this State have to carry to provide security for a problem that is not of our making.

Senator Smith turned to the tragedy in relation to his own town and constituency of Nenagh and the position in relation to Castle Brand. It is very clear that the workers who contributed over the 50 years to the pension fund there or whenever the pension fund was instituted, should have been better protected. There are many pension fund schemes in operation which were set up at a time when the employer class or the capitalist class in this country had a very patronising attitude to workers and felt that they either could not be trusted or that they were not capable of acting as trustees in their own pension fund. That is patently nonsense and would be seen as such by all Members of this House in 1984. Therefore I propose to take steps to ensure that the trustees of such pension funds are representative of both participants in the pension fund. I would go further and support the point raised by Senator Harte that pension fund contributors in a particular company should avail of the trade union movement to provide trustees if they do not want to do it themselves or do not want to be so directly involved. The trade union movement has both the position and the expertise to ensure that the kind of tragedy that has happened in the Castle Brand pension fund could be avoided.

Senator Harte also referred to the need to reform and impose company law, and raised the position of an employee whose company did not go to formal liquidation or insolvency but which simply, so to speak, disappeared in the night. We can take this up at some length on Committee Stage if the House so wishes. In that instance where there is not a formal liquidation, where there is not somebody to whom the workers or the workers' representative can present their claim or their case, I have taken power within the Bill for the Minister for Labour to step in. Where a company disappears, if the workers arrive on a Monday and find that the plant, the factory or the shop is closed and that the worker is non-protectable, the procedures would be as follows: the workers or their representative can come to the Department of Labour and make a formal complaint or claim and I will appoint a relevant officer with powers similar to those of the relevant officer who would be the liquidator in a formal liquidation to make the normal investigations and if satisfied that the workers have a bona fide claim in respect of lost wages, then they would be paid accordingly. This is part of the problem with regard to the question of cost. When we confer this right retrospectively to 22 October 1983 we have a reasonable estimation, although with very inadequate statistics, of the formal liquidations and the formal insolvencies that have taken place but we have no estimation whatever of the informal ones. We have attempted to make provision in the fund to cover what we reckon would be a reasonable estimate of what the demand would be on the one hand and quite frankly, to minimise the level of contribution that the employers would have to make on the other. It is frequently referred to in the House and in public affairs generally that one of the difficulties that employers are currently experiencing in the Irish environment where trading conditions are difficult is the level of public taxation that they have to carry and specifically in relation to employment, employers have on numerous occasions referred to the high level of employment cost that their PRSI contribution represents. They have referred to the PRSI contribution as a tax on employment. For every worker who is paid £100 PRSI, £120 has to be found, £12 extra of which comes from the employer's contribution. It does represent a charge albeit a much smaller charge than employers in other EC countries have to pay. It is a claim being made by employers and those who would argue that we should make this fund retrospective to various dates for various reasons that we should have regard to the difficulties that employers have in recruiting staff or maintaining staff or increasing the workforce and to the fact that we are trying to balance one consideration against the other.

On the question of Athlone — Senator Fallon raised the point of the prospect of trying to get quick and effective payment as soon as possible and the point was raised by other Senators also — it is our intention if this Bill is enacted to move as quickly as we can to make payments. The regulations are in draft form and the claim forms are in draft form and will be available within a week or so. Subject to the necessary information being correct and all the detail being complied with, it would be my intention to give a direction that where possible and feasible payments will be made as soon as possible. If that enables payment to be made from the Department and from the fund before Christmas I will be very happy.

I have avoided making any reference to the Leas-Chathaoirleach's contribution until the last because it warrants a certain kind of riposte that is in the same tone and quality as her own contribution. I had the temerity to visit Clare without her permission during June.

An Leas-Chathaoirleach

I would invite the Minister.

I realised as I left the outskirts of Limerick that I was heading into very difficult and dangerous country, and it was confirmed when I saw at the far end of the town of Ennis the statue of someone who on occasion the Leas-Chathaoirleach has made reference to. I was glad to see that the spectacles had been returned.

An Leas-Chathaoirleach

I have no regrets ever for referring to him.

When I saw his august presence I felt that your resounding presence that emanates and fills this Chamber on many occasions was everywhere. I did not stay late into the night. The meeting I had was in the middle of the day. The undertaking I gave to the Kilrush Pottery workers whom I met — and you are well informed, as I would expect, in that part of the world — was that I would do everything possible to try to meet what was a reasonable claim on their behalf. We have looked at the situation and I was festooned and besieged with representations from Deputy Madeline Taylor-Quinn and from Deputy Donal Carey and from the Transport and General Workers Union representatives in Clare. Quite frankly, and I say this with some reluctance, we are not in a position to accede to either of the two options that the Fianna Fáil Party in the other House gave us in relation to the retrospection date. Indeed, Deputy Brendan Daly was particularly vociferous in trying to press this point. The reason why we are not in a position is that the fund is not as flaithiúlach as would appear. The claims on it this year are going to be enormous. It may very well be that we will have to look at the possibility of increasing the level of employer contribution.

I am very conscious of the critical balance that many companies are currently in in terms of their trading position. Therefore, it is with great reluctance that I request the Government and the Minister for Finance to add to the cost of employment. This has to be seen in objective terms as a cost to employment. For that reason we are not in a position to go back further than the date of 22 October 1983.

I would point out to Senator Honan that her constituency colleague, Deputy Daly, was in the Department of Labour during the time when this directive was passed by the EC and then it was on the order book, so to speak, of work to be done. The Government from 1977 through until 1981 — it had no difficulties in terms of its parliamentary majority — negotiated that directive because the directive was agreed upon on 22 October 1980 and member states were given three years within which to bring forward the legislation and after which the legal date from which they were liable was 22 October. Therefore, one can draw the conclusion that if the concern that Deputy Daly has expressed so vociferously over the last few days in the other House had been applied effectively in the Department of Labour when he was in Mespil Road, then the workers in Kilrush Potteries would not be in the unfortunate position that they are in today. But that is of little consolation to those people or to any other workers who find themselves in that situation. Our statistics are not sufficiently adequate to enable us to make the date retrospective from that point. Regrettably, I cannot accede to the request.

In conclusion, I thank Senators for their contributions and confirm what I said in my opening speech on Second Stage, that all the legislation we have in the worker protection area needs to be looked at and reviewed in the context of seeing whether it provides adequate and effective protection and if it enables the economy on which workers are dependent for their livelihood to function and prosper. It is my desire and my intention to have such a comprehensive review with one clear understanding that in bringing forward any changes or reforms that will be necessary — it is quite clear that changes and reforms will be necessary — we do not throw out the baby with the bath water, that we do not unlearn the lessons of history, so to speak, in terms of the way in which these measures have been painfully put onto the Statute Book. I thank the House for its co-operation.

Question put and agreed to.

An Leas-Chathaoirleach

Next Stage?

It is proposed in accordance with our decision this morning to take Committee Stage at 3 p.m. today.

Committee Stage ordered for 3 p.m.