Unfair Dismissals (Amendment) Bill, 1993: Committee Stage (Resumed).
Debate resumed on amendment No. 21:
In page 8, paragraph (c), line 3, to delete "disregarded" and substitute "deducted but the said amounts shall be payable by the employer to the State as part of the judgment".
When the Minister replied to my amendment last night I listened carefully and later watched it on television to make sure I had heard her words correctly. I do not believe the matter I raised was addressed by the Minister. It is a complicated point which I would like to reiterate.
The Minister spoke about concern for the unfairly dismissed employee, his or her mental stress and uncertainty for the future. The Minister is right to be concerned. In a case where an employer unfairly dismisses an employee, the tribunal or court assesses and judges the case, and assesses damages in recompense. It will take into account all of the effects including such items as stress, uncertainty for the future and the period of unemployment. My proposal is that the tribunal assess damages which must be paid by the employer and received by the employee.
If we adopt the wording proposed in this Bill an open cheque will be supplied by the State for a sum in excess of the damages as assessed. That will occur in every case of wrongful dismissal. Our task in the Seanad is to scrutinise every Bill to ensure we protect the interest of the State. In this case we must protect the interests of the employer and employee but we also must protect the third party, the State.
The State is not necessarily always well represented when there is a clash between two parties. If an employee claims unfair dismissal, wins the case and is then awarded damages, it would appear that by leaving the amendment as it stands we will be giving the employee an open cheque for damages which is unfair to taxpayers. I suggested yesterday the employer should pay the full amount of damages less the amount that the employee had already received and the remainder would be paid by the employer to the State in the manner I described.
The Minister has explained in this debate that these amendments did not come about by chance but after long consultation between representatives of employer and employee organisations. However, we provide an open cheque for damages if we use the word "disregard" rather than the word "deduct". I am convinced my point was not answered by the Minister in her reply yesterday.
I have listened to the points made and looked at the amendment. I could not support it. That amendment could only come from an employer.
If a person is unfairly dismissed and is so deemed by the tribunal, that person is out of a job and may have to rely on social welfare. A review of his or her tax liability could show the dismissed person to be due a refund of income tax. Is Senator Quinn saying whatever back tax is due to the employee should be deducted from compensation awarded by the tribunal?
I am not in favour of this provision but I cannot do anything about the fact that in a great number of cases financial compensation is awarded by the tribunal. One could not agree to have any entitlements deducted if compensation is awarded by the tribunal.
It would not be constitutional to do so.
I understand the case made by Senator Quinn both yesterday and today. Perhaps the exigencies of time had an effect. We started discussing this amendment at about 4.55 and Senator Quinn was under the impression it was to be truncated then forever. That would mean the matter was concluded. So I allayed that fear. Therefore perhaps neither side had a chance to talk through the amendment fully. I clearly understood that needed to be done and we have the opportunity to do so today.
Senator Quinn, I am sure not intentionally, used the words "open cheque" to describe the payment of the claimant/employee. It could not be called an open cheque because the amounts of money awarded in compensation and in rebates of social welfare payments or tax deductions are precisely computed.
My definition of an open cheque is one on which one can write any amount one wishes. This provision does not allow for that.
The agencies concerned are the Department of Social Welfare and the Revenue Commissioners. They would not like it to be suggested that they use "open cheque" methods. It might be said the Departments are too precise but they are careful about the amounts of money which people are paid. They do not write open cheques and that phrase could be damaging were it to become common coinage.
Neither the tribunal, the Department of Social Welfare nor the Revenue Commissioners does its business in an "open cheque" way. The tribunal makes its decision and approves awards which are usually modest. The Department of Social Welfare and the Revenue Commissioners make precise calculations.
I will deal with the substance of the amendment now. The purpose of this section is to give legislative effect to an existing practice of some divisions of the Employment Appeals Tribunal to disregard social welfare payments or income tax rebates made to an unfairly dismissed employee when assessing the employee's financial loss. There is an element of truth in what the Senator said in that the Employment Appeals Tribunal takes account of the circumstances which resulted in the employee bringing his or her case to the tribunal. The existing practice in some divisions of the tribunal is to disregard social welfare payments or income tax rebates. I find it unacceptable that an employee's award should be reduced by the amount of the social welfare payments to which the employee was statutorily entitled while the employer's wrongdoing in unfairly dismissing the employee is effectively subsidised by the employee and the State.
The amendment goes some way towards dealing with this problem but is unnecessarily inflexible in directing the repayment in all cases of those moneys. Compensation is awarded only to an unfairly dismissed employee who may be, as I stated yesterday, facing into a period of unemployment of unknown duration. The tribunal takes this into account when making its decision but it is difficult to quantify in monetary terms. First, there is the employee's state of mind. In a small town or village the reason given by the employer for dismissing the employee would become common knowledge. Even though the tribunal has vindicated the employee, the controversy resulting from the dismissal may render him or her feeling insecure about their prospects of future employment. This should not be the case but, unfortunately, it may be.
The employee during that period will involuntarily use up valuable social welfare credits for which he or she has paid. The adjudicative bodies under this legislation should not be charged with the responsibility of deciding what, if any, portion of those payments should be repaid. Nothing in my proposal prevents the Department of Social Welfare from recouping moneys to which it may be statutorily entitled. The repayment of income tax rebates should be decided by the Revenue Commissioners. It is up to the appropriate body to assess what, if any, amount should be repaid. Senator Quinn's amendment does not allow for this flexibility.
Under this legislation awards in excess of £6,000 are liable for taxation under the income tax code. This is not a large amount bearing in mind the circumstances about which I spoke. Reducing an award by the amount of a rebate received on termination of employment would, therefore, if the award is over £6,000, amount to double taxation of the employee. This amendment, if carried, could result in the unfair treatment of an employee and I am sure the House does not wish this to happen.
Senator Sherlock suggested that the amendment would benefit employers. However, its intent is to penalise employers for, and provide a deterrent against, unfair dismissals and to avoid imposing costs on taxpayers.
My use of the term "open cheque" was also misunderstood. I was pointing out that if we disregard other income, such as social welfare payments or tax rebates, we will not know what amount in excess of the recompense awarded by the tribunal will have been received by the recipient and, thus, will be unaware of the amount paid by the State in each case. The State should not supplement sums awarded by the tribunal against employers; it should have no direct role in arguments between employers and employees. Although I appreciate the Minister's argument, I believe the present position should be discontinued and I hope she will reconsider her position.
I wish to repeat a general point I made on Second Stage. While reinstatement would be the preferred remedy of the House, since financial compensation is the most common form of redress, it is appropriate that we discuss this issue. I take the view — as the Minister has done — that tax rebates and social welfare payments may be disregarded as relatively small sums are involved. The average compensation awarded by the tribunal in 1989 was £3,232; in 1990 it was £3,600 and in 1991 it was £2,660.
May I make one final point? Payment of compensation defeats the purpose of this Bill. We must seek redress and reinstatement rather than compensation.
We dealt with that point yesterday, although it slightly impinges on what we are saying today. We would all favour reinstatement as a remedy but this is usually not possible due to the circumstances surrounding cases. I neglected to point out to Senator Quinn that where an employee is awarded compensation, a copy of the tribunal's findings is sent to the Department of Social Welfare and the Revenue Commissioners. When this legislation was being prepared both agencies were consulted and expressed satisfaction with its content.
Are compensation awards treated as income by the Department of Social Welfare when assessing entitlement to unemployment assistance?
I am unable to answer that because it is a specialised social welfare area. However, I assume that some action is taken by the Revenue Commissioners and the Department of Social Welfare based on the information contained in the copies of the successful claims sent to them.
Amendment, by leave, withdrawn.
Question proposed: "That section 6, as amended, stand part of the Bill."
Section 6 introduces a new principle, where a person who has been dismissed unfairly but has not suffered any financial loss will get compensation under the Bill. It is a traumatic experience for anyone to lose their job unfairly, even if they get another job the following week and suffer no financial loss. All they can achieve by going to the tribunal is to vindicate their rights having been dismissed unfairly. The Bill allows that where re-engagement is not possible, they should be paid four weeks' remuneration. I put down a number of amendments, as did other Members and I am curious to know why they were ruled out of order as they will not be a charge against the Exchequer. The employer will be paying the extra——
They were ruled out of order because of financial implications.
If you want to talk to me in my office I will give you the full details of the ruling.
The point I made regarding section 6 is that four weeks' pay is a miserly amount of compensation to give a person who is unfairly dismissed but suffers no financial loss. The figure should be increased.
That is the general point.
I would like the Minister to look at an anomaly in section 6 (a) (ii): if an employee incurred no financial loss then a payment of four weeks' remuneration can be paid to him. However, if the tribunal finds that an employee suffered a loss of, say, one week's pay, they cannot award four weeks' pay. If the tribunal determines that there is a financial loss of less than four weeks' pay can they decide to pay up to four weeks, remuneration?
He or she does not even get the minimum.
If somebody has suffered no financial loss they can be awarded four weeks' pay, but if they have only one week's financial loss then the tribunal, by my interpretation, has not the discretion to pay up to four weeks' remuneration.
I think the point is well made. I was going to make it myself even though I do not have the answer to it. In practice, the number of cases that would fall into this category would be small — about half a dozen — but the principle raised is important. In a nutshell it means that a person could be awarded up to four weeks' pay while not having suffered any loss. Yet a person who genuinely is entitled to one, two or three weeks' pay would not get the maximum of four week's pay which somebody who suffered no loss would be awarded. I do not have the answer but I think it is an interesting point.
The previous arrangement was no loss, no money. In this Bill we sought to effect a change in that, and every change brings its own anomaly.
We tried to improve that but our amendment was not accepted.
All I can suggest is that it is a better anomaly than the one that went before.
Maybe if the Minister looked at our suggested amendment which was ruled out of order it might be a way of overcoming this. Perhaps the Minister might look at it for Report Stage.
Since the amendments have been ruled out of order they cannot be taken on Report Stage.
May I suggest that the Minister could arrange them differently and make them work.
I wish to make a few brief comments on this section. I am disappointed that my amendment concerning leave of absence has not been accepted. On the question of compensation, it has to be taken into consideration that if a person is awarded compensation and they are in receipt of unemployment benefit, that compensation is their right, as the Minister said, as they have paid their contributions; there might equally have been a rebate of tax. We must take on board the example given by Senator Neville of a person who may be in receipt of unemployment assistance. All unemployment assistance is means tested. I am aware of no circumstances where unemployment assistance is not means tested.
Question put and declared carried.
I move amendment No. 22:
In page 9, paragraph (b), to delete lines 26 to 36.
I put down this amendment because the Minister of State spoke about legalism and the need to reduce it to a minimum. I was surprised that this legislation provides that an employee with a grievance can go to a tribunal without going to a rights commissioner first. I think the right procedure would be to initiate a case with the rights commissioner and then move on.
This amendment proposes the deletion of a technical amendment which has been framed to improve the working of the tribunal and to cut down on unnecessary paper work by claimants seeking redress. As drafted, section 8 (5) of the Principal Act requires either party to notify an objection to the hearing of a claim by a rights commissioner to the rights commissioner himself. This has given rise to a situation of "mock referral" whereby a claimant who wishes to proceed directly to the tribunal must first refer his or her case to a rights commissioner while simultaneously, perhaps, stating their objection to a rights commissioner hearing.
It is desirable, therefore, that the provision in the Bill should stand so that a claimant may direct a case to the tribunal without involving a rights commissioner if that is what they want to do. I think it simplifies the matter and makes it clear for a claimant.
Amendment, by leave, withdrawn.
I move amendment No. 23:
In page 10, paragraph (d), to delete lines 3 to 9 and substitute the following:
"(b) when a person is eligible to claim unfair dismissal under the Unfair Dismissal Acts, 1977 and 1993, that person is not eligible to bring a claim under the Industrial Relations Acts, 1946 to 1990.".
The provision in this Bill on alternative remedies available to dismissed employees should be simplified. I think it should provide that where an employee has a right to claim under the unfair dismissals legislation he or she should be barred from bringing a claim based on dismissal to the Labour Court. In other words, if they opt for the tribunal they should not then be able to go to the Labour Court. This simplification would be more conducive to good industrial relations. It would not bar employees who do not have a statutory right under the Unfair Dismissals Acts from bringing a case under the Industrial Relations Act, 1946. It would only apply to those covered by the terms of the Unfair Dismissals Acts.
The amendment would deny to every employee eligible to bring a claim for unfair dismissal under this legislation access to the dispute settling procedures provided under industrial relations legislation. I consider such a broad ranging amendment to be fraught with unsatisfactory implications in practice compared with the provision in the Bill. That is in general terms.
I know that the intent of the amendment is to simplify the process and cut out alleged unnecessary avenues and, therefore, perhaps bureaucracy. I think the provisions of the new section 10 (a) (b) of the Bill allow the parties concerned with dismissal to choose the appropriate avenue of redress themselves.
This amendment would actually cut off that option. However, it should be noted that industrial relations legislation limits to cases involving "disputes" the circumstances in which a dismissal may be processed through the Labour Relations Commission and the Labour Court. Where an industrial dispute concerning dismissal has arisen, the relevant expertise in related conciliation and mediation machinery available in the Labour Relations Commission makes it uniquely suited to processing these cases. If the amendment were accepted, however, this avenue of redress would be closed to such cases unless the employee concerned was ineligible under the unfair dismissals legislation, that is had been employed for less than one year in that employment. I do not consider this a desirable state of affairs and I would prefer a proposal which left the decision about which option of redress to be pursued entirely to the parties concerned. The introduction of this proposal would create inflexibility whereas choice of route, depending on the type of case in many instances, is the guiding light in such matters. I know Senator Neville no less than Senator Hillery, has a wide-ranging knowledge of this legislation. We seek not to cut off an avenue which can be utilised satisfactorily.
I gather from what the Minister of State is saying that if the amendment were accepted, and one had a dispute or a strike arising from a dismissal that dispute could not——
It would spread into a dispute as distinct from being a single person——
The point I am making, to confirm what the Minister said, is that if a dispute or a strike arose because of a dismissal, then if my amendment were accepted, that dispute could not go to the Labour Court because it arose from a dismissal. Is that what the Minister is saying?
I am a little confused. Is there a misprint on the bottom of that page in section 23 where it says, "in page 10, paragraph (d)". Are we referring to paragraph (b)? I have got a little lost there.
Paragraph (b), lines 3 to 9.
So it is paragraph (b). Thank you, that solves my problem.
The Senator has obviously accepted my point.
Am I interpreting the Minister's point correctly?
The Senator is, precisely.
I am so pleased we understand one another.
Amendment, by leave, withdrawn.
Government amendment No. 24:
In page 10, subsection (11), line 14, to delete "1992" and substitute "1993".
This is a technical amendment. The Bill was drafted in times of cheerfulness and optimism when we thought we were going to complete its passage through both Houses earlier. We now need to refer to the Social Welfare Bill, 1993 instead of 1992 because we are in a different calendar year.
Amendment agreed to.
Section 7, as amended, agreed to.
Sections 8 to 10, inclusive, agreed to.
Amendments Nos. 25, 27, 29, 30, 31, 33, 34 and 35 are cognate and consequential on amendment No. 37, and all may be discussed together.
I move amendment No. 25:
In page 11, subsection (1) line 11, to delete "Circuit Court" and substitute "Appellate Division of the Tribunal".
During this discussion over the last few days I have heard statements from people with expertise in industrial relations, such as Senator Hillery and Senator O'Toole. From a layman's point of view the Unfair Dismissals Act, 1977, which was meant to be informal and to allow people with labour relations problems to have their grievances heard by the tribunal, has not worked out as intended. The Minister of State said she wanted to reduce legalism from day one in this debate, and that is the principle of these amendments. The White Paper stated that major changes were necessary in the appeals procedure under the legislation. At present either party to a dispute may appeal a determination by the tribunal to the Circuit Court. Originally it was envisaged that such appeals would be few and far between but they have now become frequent with a significant number of determinations being appealed to the courts.
The discussion document mentions, "establishing an informal Tribunal with industrial relations expertise", but this to some extent undermines it. The ICTU, the FUE and the Employment Appeals Tribunal have expressed dissatisfaction with the role of the Circuit Court. Once a decision is appealed to the Circuit Court it amounts to a complete rehearing where both parties can call further evidence if they wish, and all issues of law are reopened. A further anomaly, not referred to in the discussion document but requiring some reform, is that decisions of the Circuit Court can now be appealed to the High Court. Initially we set up a tribunal to deal with grievances of employees who consider they have been unfairly dismissed, and now we find ourselves going from that tribunal to the Circuit Court and, in some cases, to the High Court where new evidence can be called.
The tribunal is not a court of law and can allow the strict rules of evidence to be relaxed. When, however, an appeal goes to the Circuit Court or High Court, the judge will apply a different set of rules than those that prevail in the tribunal. It is quite anomalous to provide for an appeal from a tribunal which applies one set of rules of evidence to a court which operates another set of rules. A system has to be found whereby appeals can be made to a body constituted similarly to the tribunal, comprising representatives from the work place, and with the same rules and standards that apply at the tribunal itself. For that reason we have tabled these amendments setting down what we believe to be the kind of appeals system that should operate under the legislation. The White Paper states, in paragraph 43 on page 24:
"Major changes may be necessary in the appeals procedure under the legislation".
A major recommendation in the White Paper was that the appeals system be changed. Unfortunately, the legislation before us does not provide for that. For that reason, Senator Neville and myself have moved these amendments to provide for such an appeals system.
The Bill as drafted does not alter the basic provision of the 1977 Act under which either party in an unfair dismissal case has a right of appeal to the Circuit Court. Senator Doyle is quite right to say that there have been many cases going from the tribunal to the Circuit Court which was never the intention of the 1977 Act. The amendment proposed by Senators Doyle and Neville would appear to be designed to replace the Circuit Court by a newly constituted appellate division of the Employment Appeals Tribunal which would henceforth deal with the determination of appeals from the tribunal. We discussed this at great length and both Senators took care when drafting these amendments, but I do not think any benefits would be derived from these amendments.
There have been criticisms of the 1977 Act, which I fully accept, whereby proceedings in the Circuit Court involve in effect a rehearing of the case in question. However, section 11 in the Bill, which replaces section 10 of the original Act, lays down revised procedures for the enforcement of tribunal determinations and orders of the Circuit Court on appeal. The new section makes it clear that a rehearing of the facts is not part of the enforcement procedures and Senator Doyle explicitly raised that point. The new section in the Bill as drafted makes it clear that a rehearing of the facts is not part of the enforcement procedures. This revised provision will do much to overcome the criticism of the role of the Circuit Court under the 1977 Act. The amendment, if accepted, would impose a further layer of bureaucracy on the procedures of the tribunal and people would go to the Appellate Division more frequently than they attend the Circuit Court. This would diminish the role, function and status of the Employment Appeals Tribunal. I doubt whether the amendment is legally feasible. The removal of the right of appeal to the courts, set up under the Constitution, could be a breach of constitutional justice. A citizen has the right to go to a court of law.
An individual may go to a court on a point of law but not on a point of fact. The case was well put by Senator Doyle. There are two systems of hearings: one is relaxed and hearsay evidence is, to a certain extent, accepted; the other is formal, with one person. The tribunal has a strong input from people with experience of industrial relations, employers and trade unions. The legal presence acts as a chair rather than playing a determining role. It allows lay people with experience in this area to determine the justice——
The avenue is open to a totally different approach to the hearing, where legalism is present, where the laws of evidence are changed and where areas of hearsay evidence are completely ruled out. Employers are in a better position when such cases reach the courts because of financial considerations, etc. Often an individual who has been unfairly dismissed has no job and is in a vulnerable position. A lawyer usually asks for a cheque from the employee if he is unsure whether he will receive his fee after the case is heard. Therefore, it is fair that the employer should go to a court rather than the employee because of the costs factor.
Members of the Appellate Division of the tribunal must be experienced in this area and the chairperson should have the status of a judge. The Minister might reconsider this amendment on Report Stage. A case should go to the Appellate Division only if evidence which was not available or was not presented to the original Employment Appeals Tribunal becomes available. Such measures might help overcome the Minister's concern about reducing the status of the Employment Appeals Tribunal because of the availability of the Appellate Division. I would prefer to see it as a different tribunal rather than a division of the present tribunal.
One of the themes I tried to develop on Second Stage was that a dispute is best solved close to where it occurs. I would prefer — and I am sure the House would share this view — if disputes or threats of dismissals could be resolved before they reach the dismissal stage. However, that is not to say that there is no place for the tribunal. The existence of third party machinery in the area of labour management relations has its place. Nevertheless, there is the temptation to use the Employment Appeals Tribunal prematurely rather than devote energy to solving a dispute before it reaches that stage. I favour the existence of the tribunal.
Fewer cases are now appealed to the Circuit Court and as Senator Neville said, the lay input into the adjudication process and the experience gained by the tribunal over the years has meant more disputes can be resolved at that level.
If there is another layer, of an appellate kind, on top of the existing tribunal, that will be almost an invitation to go to the next stage. In labour management relations the best way to resolve a dispute is eyeball to eyeball. Disputes can be resolved by using the knowledge and skills of people in the workplace.
I have confidence in the wisdom of the tribunal and I would not like to see the introduction of an Appellate Division.
I agree with the interpretation of this amendment, which would allow an individual to appeal a decision made by the Employment Appeals Tribunal. Often employers arrive at hearings with good legal advice and it is unfortunate that no provision is made to provide free legal aid for those who cannot afford legal representation. It is unfair that a trade union official must present his case against a senior counsel. Claims relating to unfair dismissals may include technical points of law and legal representation is necessary.
An employee who is unaware that a transfer of undertakings is taking place may accept statutory redundancy. When the transfer is complete the employee may discover that his job has been given to somebody else. Is there an EC directive which prohibits legislation from protecting workers in that regard? Free legal aid should be available to those who cannot afford legal representation.
I listened to and understood Senator Hillery's point that the best place to settle a dispute is close to where it occurs. The second best place to settle a dispute is, as Senator Hillery said, at the Employment Appeals Tribunal rather than in the courts. The informality of such a setting has considerable advantages when trying to reach a settlement. People suffer trauma when they have to go to a court of law. The suggestion of an Appellate Division of the tribunal is sensible. The Minister might reconsider this amendment on Report Stage, as suggested by Senator Neville.
I would not be adding an extra layer to the existing tribunal; I would be removing the court as a layer and replacing it by the Appellate Division.
This cannot be done under the Constitution. We have taken advice on it.
The White Paper on unfair dismissals states that all three bodies consider that appeals to the court should be limited to matters of determination to the High Court on a point of law only. It is suggested that this recommendation be accepted. As this practice already operates under the redundancy payments Acts and in the Labour Court under the equality legislation, how is it unconstitutional?
We were advised that it would be unconstitutional and I and my officials are bound to take such advice in the preparation of legislation. The White Paper was introduced in 1987 and following that, it was closely scrutinised and that fact emerged after discussion with my officials. The Circuit Court would remain as a court of appeal for any citizen on any matter. The Appellate Division of the Employment Appeals Tribunal, to which the amendments refer, would be an intermediate layer.
The majority of cases referred to the Circuit Court are settled before they get there, and this has not been pointed out. This debate has revealed a great dissatisfaction with the way the Employment Appeals Tribunal does its business. We have all agreed that there is increased legalism in the operation of the tribunal.
Although the Bill setting up the tribunal allows employers and employees to have a solicitor present, the hope was that they would not do so, but would have their cases deliberated in a more informal atmosphere. I know from informal discussions I have had with people outside the House and with representative bodies, such as ICTU, that there is growing concern about the increased legalism in what was meant to be a relatively simple procedure. That has been highlighted time and again in this debate. It underlines the points Senator Sherlock made and we keep referring back to it——
That is the only way to get the point across.
Coincidentally, I will be meeting the chairman of the tribunal shortly and I hope to meet all the members of the tribunal as soon as possible. It is clear to me that there is a need for straight talking and I intend to do this. We should try to make the tribunal conform to what was intended rather than for it to become another court, with all the trappings.
Question put: "That the words proposed to be deleted stand."
The Committee divided: Tá, 23; Níl, 12.
- Bohan, Eddie.
- Byrne, Seán.
- Calnan, Michael.
- Cashin, Bill.
- Daly, Brendan.
- Farrell, Willie.
- Finneran, Michael.
- Fitzgerald, Tom.
- Gallagher, Ann.
- Hillery, Brian.
- Kelleher, Billy.
- Kelly, Mary.
- Kiely, Dan.
- Kiely, Rory.
- Lanigan, Mick.
- McGennis, Marian.
- McGowan, Paddy.
- Mooney, Paschal.
- Mullooly, Brian.
- O'Brien, Francis.
- Townsend, Jim.
- Wall, Jack.
- Wilson, Gordon.
- Cregan, Denis (Dino).
- Dardis, John.
- Doyle, Joe.
- Enright, Thomas W.
- Honan, Cathy.
- Howard, Michael.
- Naughten, Liam.
- Neville, Daniel.
- Quinn, Feargal.
- Ross, Shane P.N.
- Sherlock, Joe.
- Taylor-Quinn, Madeleine.
Tellers: Tá, Senators Mullooly and Wall; Níl, Senators Neville and Doyle.
Question declared carried.
Amendment declared lost.
Amendments Nos. 26, 28 and 32 are Government amendments and are related and may be discussed together.
Government amendment No. 26:
In page 11, subsection (1), line 13, to delete "this Act" and substitute "the Principal Act".
Amendments Nos. 26, 28 and 32 are technical amendments requested by the parliamentary draftsman. The reference to "this Act" is not sufficiently precise since the arrangements for redress referred to in lines 13, 16, 17 and 44 are contained in the Principal Act and not in this Act.
Amendment agreed to.
Amendment No. 27 not moved.
Government amendment No. 28:
In page 11, subsection (2) (a), lines 16 and 17, to delete "this Act" and substitute "the Principal Act".
Amendment agreed to.
Amendments Nos. 29 to 31, inclusive, not moved.
Government amendment No. 32:
In page 11, subsection (3) (a), line 44, to delete "this Act" and substitute "the Principal Act".
Amendment agreed to.
Amendments Nos. 33 to 35, inclusive, not moved.
I move amendment No. 36:
In page 12, subsection (4) (a), line 32, after "interest" to insert "at the penalty rate prevailing at the time as imposed by the Revenue Commissioners on tax withheld".
The provision in this section relating to payment of interest on discharged determinations of the tribunal is an entirely new departure in the context of this legislation. There is specific provision in regulations made pursuant to section 22 of the Courts Act for a judge to order payment by a debtor of interest at the rate of 8 per cent per annum. This is the rate used generally in court proceedings where, for example, there is a period between the date of the cause of the action and the date of the judgment. The rate is reviewed periodically and was last reviewed in 1989. The rate is set so as to allow some measure of compensation to the claimant for the value of foregoing payment of a financial award.
The amendment would substitute instead of the interest rate provided in the legislation the rate of interest levied by Revenue Commissioners on overdue taxes, that is, 1.25 per cent per month, as set out in section 46 of the Finance Act, 1978. It is a penal rate of interest set to ensure that there is substantial financial disbenefit for taxpayers in keeping funds on deposit rather than paying taxes due. In order to ensure that this is the case, any financial loss to business arising from payment of this interest cannot be offset by taxes.
It is not my purpose that these punitive measures would be used in this respect but I want to give the employee additional financial compensation in respect of the period for which the award is foregone but the approach in this amendment might be counter-productive. The rate of interest is set at a level to guarantee that any award will be paid.
The purpose of the amendment is to increase the interest rate of 8 per cent per annum mentioned by the Minister. There might be a middle course between the punitive tax I have asked for and the 8 per cent the Minister has suggested.
Amendment put and declared lost.
Question proposed: "That section 11, as amended, stand part of the Bill."
I know it will be regarded as a stupid thing to do at this stage, but I must ask if section 11, which Senator Neville and Senator Doyle have failed to amend, is superfluous. The only reference to the Minister is in section 11 (2) (b) (ii): "if he considers it appropriate to make the application having regard to all the circumstances, the Minister,". Could somebody explain that reference to the Minister?
Under the Principal Act, if, within six weeks, an employer does not carry out the terms specified in the determination of the appeals tribunal, the Minister for Labour may, at his own expense, bring the matter to the Circuit Court on behalf of the employee. If it finds that the employee is entitled to redress, the court will order the employer to make the appropriate redress. Will the Minister still have the power to bring proceedings to the Circuit Court where an employer has failed to make the redress granted by the tribunal? What is the purpose of this section, because the six weeks is provided in the Principal Act?
In the original Act the only way redress can be obtained is via the Minister. Henceforth, both the aggrieved party — the person who feels themselves injured due to lack of payment — and the Minister will be able to bring court proceedings.
The provision in this section relating to payment of interest on undischarged determinations of the tribunal is a new departure in the context of this legislation. There is specific provision and regulations made pursuant to section 22 of the Courts Act for a judge to order payment by a debtor of interest at a rate of 8 per cent. In general, that would happen when the judge ordered that a certain amount be paid but it was not. The courts have fixed the rate at 8 per cent per annum and we have adopted that provision and put it into this legislation.
Many people are concerned that it now takes nine months to get a case to the tribunal. I do not want to labour the point — and it has been discussed a lot by those involved in industrial relations — but, I ask the Minister to look seriously at the delays. I raised the matter on Second Stage and on the basis of finance and I again ask the Minister to ensure that cases come to the tribunal as quickly as possible.
The Senator is right. Legalism and long delays are two of the outstanding matters which must be addressed in the talks I will have shortly with the chairman of the tribunal. The Senator is correct about appeals being dragged out. I am afraid people will lose faith in the tribunal — which was set up in good faith — because of delays and because of legalism. Doubts are beginning to emerge about the tribunal and my Department must stop that. I will pursue the point the Senator raised.
Any backlog is disturbing but it seems to me that a number of cases are allocated a half day when that much time is not required or justified; in some case an appeal might only take a half an hour. There might be merit in introducing a prehearing device to speed up cases.
That is a good point: at present, a half day is allocated to each case and if a case is settled quickly the tribunal does not sit for the rest of the allocated time. There should be a system to make the tribunal more efficient.
Another disturbing point is that if a case requires more than half a day, the adjournment can be for months and it is hard to pick up the threads of these cases after long delays. I have seen cases adjourned on three occasions with interruptions of up to three or four months between each sitting. It is difficult for the tribunal to adjudicate and it is difficult for the parties involved to make a coherent case if there are lengthy interruptions. In respect of the point Senator Hillery made, no case brought to the tribunal in 1993 has yet been heard: it is still dealing with cases from 1992.
This interchange is useful. The business of the tribunal must be streamlined, but its ethos — that one gets a fair hearing — must, of course, be maintained. Over a number of years a degree of inflexibility has developed in the operation of the tribunal and this must be looked at. I assure the House that I will pursue this matter and I will draw on the points made in this debate. I assure the House that I intend to go about that matter arising from the debate we have had here.
Would the Minister agree in view of what has been stated that restructuring of the tribunal is necessary at this time? Could there be a full time chairperson and could the chairperson be drawn from outside the legal profession? This would be beneficial to the full restructuring of the tribunal.
The purpose of having a legal person as Chair was that he or she would be an advocate and an ombuds-person for both employer and employee and would possess the necessary expertise. The point about the appointment of a full time Chair will be considered in the context of a review of the whole system.
Senator Sherlock made the point that there should be a full time chairperson.
He said a non-legal chairperson.
I would not agree with him on that point. The Chair should be held by a legal person. The Unfair Dismissals Acts are legal documents. While lay people have the most input into the tribunal, a legal presence is needed to interpret the law.
The point is well made by Senator Sherlock that there is a need for a full time chairman of the tribunal.
Question put and agreed to.
There is a printing error in amendment No. 37. On subsection (2) (a) "Chairmen" should read "Chairman".
Amendment No. 37 not moved.
Section 12 agreed to.
Sections 13 to 16, inclusive, agreed to.
Government amendment No. 38:
In page 14, subsection (4), line 7, to delete "July" and substitute "October".
This is a technical matter. Section 17 (4) of the Bill provides the date for the coming into force of the legislation. It was intended to have it effective from July 1993. In the event that this is not possible, the effect date has been set at 1 October 1993.
Could the Minister meet the tribunal before the Bill is taken in the Dáil so that she will have the benefit of discussions with them?
Amendment put and agreed to.
Section 17, as amended, agreed to.
Title agreed to.
Bill reported with amendments.
When is it proposed to take the next Stage?
Report Stage ordered for 3 p.m. today.
Sitting suspended at 12.15 p.m. and resumed at 12.30 p.m.