Wednesday, 25 January 2012

Questions (6, 7, 8, 9, 10)

Clare Daly


6Deputy Clare Daly asked the Minister for Jobs; Enterprise and Innovation the legislative measures, if any, he intends to introduce to prevent scenarios such as Vita Cortex and La Senza whereby places of employment are closed without prior warning being provided to employees and without provision being made for statutory or enhanced redundancy terms. [4108/12]

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John Halligan


8Deputy John Halligan asked the Minister for Jobs; Enterprise and Innovation in the context of the treatment of workers in Vita Cortex, La Senza and Lagan Brick and other similar cases such as the Jane Norman chain in mid 2011, in which workers are denied the rights and entitlements by employers, the measures and legislation he proposes to put in place to ensure that such occurrences are not repeated; and if he will make a statement on the matter. [4111/12]

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Billy Kelleher


15Deputy Billy Kelleher asked the Minister for Jobs; Enterprise and Innovation if he has considered a resolution mechanism to expedite labour disputes to prevent a repeat of the treatment of workers at a company (details supplied); and if he will make a statement on the matter. [4154/12]

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Derek Keating


31Deputy Derek Keating asked the Minister for Jobs; Enterprise and Innovation if, in view of the La Senza case in Liffey Valley (details supplied) in which workers were told that they were no longer required to report for work on 10 January 2012 and following the intervention by the trade union group and the Minister for State, he will outline the lessons that have been learned from this case; if there is a need for new legislation; the protections in place to ensure that it does not happen again; and if he will make a statement on the matter. [3946/12]

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Richard Boyd Barrett


45Deputy Richard Boyd Barrett asked the Minister for Jobs; Enterprise and Innovation in the context of the treatment of workers in Vita Cortex, La Senza and Lagan Brick and other similar cases such as the Jane Norman chain in mid 2011, in which workers are denied the rights and entitlements by employers, the measures and legislation he proposes to put in place to ensure that such occurrences are not repeated; and if he will make a statement on the matter. [4112/12]

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Oral answers (77 contributions) (Question to Minister for Jobs, Enterprise and Innovation)

I propose to take Questions Nos. 6, 8, 15, 31 and 45 together.

The number of cases that have arisen in recent times of companies becoming insolvent and not engaging in timely and adequate dialogue with their employees is regrettable. I fully understand the pressures companies are under, but this should not be an excuse for treating employees shabbily.

There are various legislative protections in place in both my Department and the Department of Social Protection to protect employees in situations such as those that have arisen in recent weeks. The arrangements in place offer comprehensive protections, but as recent events have clearly indicated, they require the willingness of all parties to ensure legal obligations are discharged. The Protection of Employment Act 1977, as amended, makes it mandatory for employers proposing a collective redundancy to engage in an information and consultation process with employees' representatives and provide certain information on the proposed redundancies. An employer is prohibited from issuing any notice of redundancy during the mandatory employee information and consultation period.

The Minimum Notice and Terms of Employment Acts 1973 to 2001 make it mandatory for employers to provide a minimum period of notice in advance of any dismissal for employees with at least 13 weeks service. The notice period ranges in scale from one week to eight weeks, depending on the number of years of service. The Organisation of Working Time Act 1997 provides that most employees are entitled to four weeks annual holidays for each leave year withpro rata entitlements for periods of employment of less than one year.

The redundancy payment legislation, administered by the Department of Social Protection, obliges employers to pay a statutory redundancy lump sum to eligible employees. Where an employer is unable or unwilling to pay, the Department of Social Protection has provision to make a payment from the social insurance fund. The insolvency funds also provide for claims that follow the failure of an employer, for reasons of insolvency, to make payments to employees that are properly due. These include payments in respect of such categories as arrears of wages due, holiday pay entitlement, pension contributions, etc.

Where workers believe their rights under legislation have not been respected by their employer, they have a right to pursue their complaint before the Rights Commissioners or the Employment Appeals Tribunal, as appropriate. Where disputes arise between workers and employers, the Labour Relations Commission can assist with dispute resolution services. The LRC has a very strong record of brokering solutions in many cases. However, not all situations are amenable to being resolved through conciliation. We must remember that the system of industrial relations in Ireland is essentially voluntary in nature and responsibility for the resolution of industrial disputes between employers and workers, whether in redundancy or other collective disputes, rests with the employer, the workers and their representatives. Recent developments have given us all cause for concern and my Department is monitoring developments in close consultation with the LRC.

The Minister's answer is not good enough. He has merely outlined thestatus quo and the backdrop against which the scandalous decisions have been made by employers to leave workers with nothing, without notice of closures which are sprung on them deliberately to evade the making of statutory redundancy payments. This is happening within the legislative framework outlined by the Minister, which clearly shows that systems and the level of enforcement are inadequate. There is an onus on the Minister to look further.

The question asked what action the Minister would take, and there are a number of measures on which I would like the Minister to comment. The only way workers can meet the threat when closure is sprung on them is by occupying the place of work. Although it did not happen in Vita Cortex and La Senza, when workers occupied the place of work in Thomas Cook, they were dragged out. There should be a provision in these instances where workers could be given legal immunity. That is particularly relevant where people have given all their adult lives working in a particular place. Will the Minister comment on that?

Such people should be entitled to examine the books and the financial claims being made by employers, such as Vita Cortex's Jack Ronan, who say they have no money when everybody knows they have. Organisations such as KPMG represented La Senza in breaching legislation and avoiding statutory provisions, and they have been employed by Departments, which should not happen. The last issue is in the area of enforcement, for which the Minister's Department is responsible, and measures for staffing adequately the Employment Appeals Tribunal and other organisations.

I appeal to Members to make questions and replies short.

The various agencies and supports that have been outlined have been active in some of these disputes, and in some cases there have been successful resolutions, as the Deputy probably knows. There is active discussion ongoing in some cases, with SIPTU involved with the Labour Relations Commission and a proposal being put. In another of the cases, following discussions between Mandate and KPMG, the administrator, the outstanding moneys are being paid, with workers getting their entitlements. Portraying the issue as if the system is simply not working should not be the case. There have been cases that any of us would regard as not the way business should be done, and for instance, there may not have been sufficient notice. The agencies I outlined in my reply are taking action and achieving success in some cases. With other cases the disputes are proving particularly difficult.

Employers are under an obligation to give statutory notice and there are legal enforcement powers if there is a failure to do so. Those powers remain available. We have a system of voluntary industrial relations, with experienced machinery to help both sides reach conclusions. We allow those to work through but there are reserve powers; for example, in the case of redundancy, the Minister for Social Protection would pursue an employer to recover, on behalf of the taxpayer, moneys that may have been paid.

I know the Minister has engaged in a hands-on way with the two companies mentioned but I will bring his attention to another case. He mentioned the responsibility of employers and the usefulness of the labour relations machinery. In my constituency, there was an employer that was, effectively, the State. This relates to St. Enda's Sports Complex in Limerick, which went out of business. The employees had not been paid redundancy and took the employer to the Labour Court last May, and the court's recommendation was that the employees be paid because the redundancy happened because of the withdrawal of funding by a Department. The Department of Education and Skills informed me the money had been put aside to pay the business but the Department of Public Expenditure and Reform has refused to allow the money to be paid. We are talking about 28 workers and a grand total of €80,000, which is an infinitesimal amount of money when we consider what bondholders are being paid. A Department is liable for this €80,000 but the State is refusing to honour a recommendation of the Labour Court. Will the Minister investigate that and revert to me?

I do not know of the case. From the Deputy's statement, it sounds like the case has gone through the agencies for which I am responsible. At this point it is an issue in respect of honouring a recommendation. I will seek information on behalf of the Deputy but it is not available to me at the moment.

I am dealing first with the people who put down the questions and others can contribute if there is time.

I am taking Deputy Halligan's question.

The Deputy has a question of his own and I will come to him after Deputy Keating.

I am taking Deputy Halligan's question.

I am not aware of that. I will come back to the Deputy after Deputy Keating asks his question.

I refer specifically to the La Senza workers, and I know those who found themselves in a vulnerable position would like to express a sincere thanks to all those who provided support during the time in which they were in a very vulnerable and difficult position. I acknowledge the role of Mandate in those circumstances, although I was particularly disappointed with the role of IBEC, which could have been far more supportive.

Will the Minister consider introducing a dedicated section of the labour relations system that might respond if there is a repeat of these events, as people suggest is likely to happen again because of recent trends? I know the Government is making every effort to create jobs but we must be mindful as a Dáil and Parliament of the people who are in employment and who find themselves in a very vulnerable position. We have seen far too many cases of this recently.

I would be advised by the Labour Relations Commission, which is the body with experience in this sphere. It is a very hands-on agency and it is not a question of allocating a particular section to work on this. It is every man to the pumps in these cases and from the chief executive down its best effort is put into finding a solution. Sometimes it is not possible to bring about a solution and sometimes it is, as was the case with Lagan Brick, as the intervention seems to have been successful. Unfortunately, the intervention so far with Vita Cortex has not been successful. It is not an issue of finding a new section or hiving off an area in this regard.

I share the Deputy's concern as this is a worrying trend and we need to get both sides to understand their responsibilities. We should not see such disputes reach this stage. On another side I am trying to improve the operation of the employee relations and industrial relations machinery to co-ordinate and improve the system. There is a design to promote better compliance and understanding rather than relying on dispute mechanisms to such an extent. I accept the point being made by the Deputy but I am not sure a dedicated section would make a difference.

Is it not the case that the only reason these issues are even being discussed is that workers took action and forced a response from this Government. I refer specifically to the cases of Vita Cortex, La Senza and Lagan Brick. The issue raised by those struggles is what the Government will do to prevent a recurrence of this. Workers want the Minister to ensure that workers who are owed money by companies will have first call in the administration process, and companies will not be able to shelter moneys owed to workers under other company names when those firms still trade in the State. Administrators like KPMG should have a strict code of conduct applied on how to treat workers in these cases.

There is a specific case where employees did not engage in an occupation but the Minister is aware of it and has done nothing. Workers for the Jane Norman chain received exactly the same outrageous treatment when they had contracts terminated in June 2011. They were not paid for a month and have still not received wages. The firm went into administration and the workers were still not paid the money owed. Some three or four months later, the Jane Norman chain, under the new ownership of Edinburgh Woollen Mills, again set up Jane Norman to trade in the State. The workers have still not been paid. Will the Minister intervene in this case, of which I believe he is aware, to ensure those workers are paid the month's wages they are owed, and that the situation cannot arise where a company sacks its workers, owes them money and redundancy, which still has not been paid, and then sets up again a few months later paying workers less and employing them on lower conditions? What is the Minister going to do about that?

The point must be made that the State is standing by workers in these situations. For example, where cases have been pursued under the Redundancy Acts, it is the State that pays workers and ensures they get their rights. The State would then have to pursue the employer, as is required under the law, to recover the money from the employer in those cases. It is not the case that the State is not standing by workers; it is seeking to protect workers in this situation.

Not in parts of Limerick.

We seek to ensure it is not the taxpayer that is always left having to deal with these situations. The State uses the machinery to protect both itself and workers in these cases. I understand that in the case of Jane Norman, the administration that occurred there has recognised insolvency status under Irish legislation. The money due to the workers will-----

What about the month's wages that were not paid?

-----fall to be paid from the insolvency payments scheme. The State will honour the position of those workers. A number of cases are still to be heard by the rights commissioner service in respect of employees from the company.

The truth is that the State seeks to support both sides in resolving disputes. Where they fail and there is genuine insolvency, the State obviously honours the commitment to workers. In cases where dispute resolution fails and the situation is not genuine, the State pursues the employer to recover costs. Where there is failure to give 30 days notice, the State can pursue charges against the company concerned. Legally enforceable powers will be pursued in cases where they are appropriate.

I will take three brief questions from Deputies Tóibín, Catherine Murphy and Buttimer.

A Leas-Cheann Comhairle, I wish to ask a supplementary question.

We have only three minutes left. We have already spent 15 minutes on this question.

We are entitled to ask supplementary questions.

The Deputy will have to raise the matter in some other way. We are doing our best to be fair.

I am sorry, a Leas-Cheann Comhairle.

No way. My question is on the Order Paper and I am entitled to ask a supplementary question.

The Deputy should please resume his seat.

No, a Leas-Cheann Comhairle.

Then the Deputy will have to leave the House.

Could you explain to me, a Leas-Cheann Comhairle, why I am not entitled to a supplementary question?

Because there are five Deputies with questions.

Of course. I am allowing three other Deputies to ask a brief question.

You are selecting three Members.

They are three people who have an interest in the issue.

Why is the time not divided evenly?

I divided it among the five Deputies who tabled questions.

Yes, and I am one of them.

Please, Deputy Boyd Barrett. I call Deputy Tóibín.

Am I getting a supplementary question?

I am calling Deputy Tóibín.

Am I getting a supplementary question?

As Chairman, I can call people as I wish. Deputy Boyd Barrett should please resume his seat.

Am I getting a supplementary question?

Deputy Boyd Barrett should please resume his seat.

Am I getting a supplementary question?

I am calling Deputy Tóibín. Deputy Boyd Barrett should resume his seat.

I want to know if I am getting a supplementary question.

Deputy Boyd Barrett should resume his seat or leave the House. I am calling Deputy Tóibín.

On a point of order, will you explain to me, a Leas-Cheann Comhairle-----

The Chair is on its feet.

Could you explain to me-----

I want Deputy Boyd Barrett to resume his seat or leave the House.

It is a point of order.

It is not a point of order.

It is a point of order.

Why am I not entitled to a supplementary question?

The Chair is on its feet. Deputy Boyd Barrett should resume his seat.

This is wasting time.

Deputy Boyd Barrett should resume his seat.

Will you explain why I am not entitled to ask a supplementary question?

Deputy Boyd Barrett should resume his seat. I ask the Deputy to leave the House. The Deputy should leave the House. If he does not resume his seat, he should leave the House.

I am just sitting down.

I asked the Deputy to leave the House.

Could I give my time to Deputy Boyd Barrett to ask his supplementary question?

I call Deputy Boyd Barrett.

I thank Deputy Tóibín very much. All I want to know is whether that is a commitment from the Minister that the Jane Norman workers will be paid the moneys owed to them and that the Minister is going to investigate the matter and ensure those workers receive the same justice that workers in La Senza and others are attempting to receive? Can I get a commitment that the Minister will investigate the Jane Norman case?

I call Deputy Murphy.

I will give up any opportunity to ask a question in favour of Deputy Daly.

I will come back to the Deputy. I call Deputy Buttimer.

I compliment the Labour Relations Commission, LRC, and the Minister on taking the initiative in the Vita Cortex case. However, it has not succeeded. It appears that a deal was done but at the 11th hour one of the parties reneged and walked away. The situation is that 32 people were denied their entitlements by the owner of a company who has engaged with NAMA. I appreciate that the Minister has engaged with the LRC on the matter, but what can we do for these workers who are being denied their rights and entitlements? This group of people have been engaged in a sit-in for in excess of 40 days. These workers are not prohibiting other work being done. They are engaging in a democratic action to receive their entitlements. They are not militants. They are not part of any group of mavericks. They are genuine, decent people who have in some cases worked for 47 years in the company. Where can they go now?

The Minister has avoided many of these issues which have not been sorted. Some La Senza workers are not being paid social welfare for the days of the sit-in. Tens of thousands of workers are waiting for statutory redundancy payments. Some cases came in under the radar before Christmas. The Minister has made a lot of points about the industrial relations machinery of the State, such as the LRC, but what will he do given that there is a waiting list of 74 weeks for rights commissioner cases? That is nearly a year and a half. We have 15 rights commissioners and 44 staff in the LRC. That is a reduction on the previous staff number yet, as the Minister acknowledged, the demands are greater. He is not resourcing the machinery on which he seeks to rely. What will he do about that? Why is he continuing to use agencies such as KPMG for statutory or Government work given that it has been involved in bad practice?

Some of those issues are way beyond my responsibilities. My understanding in the case Deputy Boyd Barrett raised is that a UK administration was appointed. The workers were not given their proper right of notice in that case. It does appear to be an insolvency and under law the power of the Minister in such a case is-----

The company is trading again in the country.

I will investigate whether that is the case and if that is undermining the position. My understanding is that the insolvency fund will be called into action to honour commitments to employees. I will take note of what the Deputy said. He said that the company that went into administration is still trading. I will investigate that.

Deputy Buttimer asked what the next move is in respect of Vita Cortex. An application has been made under the terms of the Redundancy Acts to the Department of Social Protection. In the normal course of events it will pay out money to the workers when it has assessed the claim and seek to recover moneys from the employer. There is also a question of redundancy sums being pursued which are beyond statutory redundancy. That is not covered by the Department of Social Protection. The LRC is maintaining contact with both sides to see whether there is scope to intervene. That is the difficulty. Through the LRC we will keep a close eye on matters and consider whether there is anything we can do to intervene.

On the question of social welfare and KPMG being involved in other cases, it does appear that KPMG and Mandate had discussions that resulted in a fruitful outcome in that case. Like the Deputy, I was surprised at the initial response that appeared to be forthcoming, but the administrator seems to have mended its hand and that issue has been resolved. I can understand the impatience of Deputies. Our system relies on co-operation from both sides, particularly employers, in honouring their responsibilities and is meant to maintain a voluntary approach. It has served us well for many years and across many disputes. We have established expertise that is clearly being put under strain by these disputes, but we will keep a watching brief and seek to make it work to the advantage of workers who are exposed in this way.