I propose to take Questions Nos. 211 and 218 together.
Moorepark Technology Ltd (MTL) is a subsidiary of Teagasc, the Agriculture, Food and Development Authority, with 57% of shares owned by Teagasc and the remainder by a number of dairying processing companies. As a subsidiary of a non commercial state agency, MTL is required to obtain Departmental approval for pay rates. It is also the case that under the ‘Articles of Association' for MTL, both the number of employees and their remuneration are subject to the sanction of Teagasc, the Department of Agriculture, Food and the Marine and the Department of Finance now the Department of Public Expenditure and Reform.
In the past, pay rates in MTL have been approved based on dairy industry norms and the application of private sector pay increases negotiated in the context of National Agreements. Staff salaries are paid from MTL's trading activities and Teagasc provide additional management support from its own resources
The refusal by MTL in 2009 to pay the 3.5% increase under the "Towards 2016 Review and Transitional Arrangement" was based on ‘inability to pay' at that time. The impact on the future cost of the public sector pensions of the claimants (i.e. the cost implications for public pension liabilities of the awarding of private sector pay increases) was also relevant. It is understood that most other private employers in the dairy industry have not paid the ‘Towards 2016 Review and Transitional Arrangement' pay increases on the basis of their ‘inability to pay'.
In addition to inability to pay, cognisance must now be taken of the introduction, in December 2009, of the Financial Emergency Measures in the Public Interest (No. 2) Act 2009. MTL is deemed under this legislation to be a "public service body" inter alia by virtue of the fact that they have a public service pension scheme. MTL is, therefore, statutorily prohibited from increasing pay rates and the pay reductions specified in the Act must apply to the staff of MTL. The Financial Emergency Act also takes precedence over the Labour Court findings in LCR 19725 on the status of MTL staff, which was made just after the enactment of the legislation.