Dáil Éireann díospóireacht -
Wednesday, 3 Feb 1971

Vol. 251 No. 4

Redundancy Contributions (Variation of Rates) Order, 1971: Motion.

Minister for Labour (Mr. J. Brennan)

I move:

That Dáil Éireann approve the following Order in draft—

Redundancy Contributions (Variation of Rates) Order, 1971

a copy of which Order in draft was laid before Dáil Éireann on 12th January, 1971.

This resolution proposes approval of a draft order to provide for variations in the rates of weekly redundancy contributions. Subsections (1) and (2) of section 28 of the Redundancy Payments Act, 1967 provide that the rates of the weekly contributions should amount to 1s in respect of each male employee, of which the employer contributes 8d and the employee 4d and 9d for each female employee, made up of an employer's portion of 6d and a contribution of 3d from the employee. Subsection (3) of section 28 provides that these rates might be varied by an order of the Minister for Labour but under section 5 (1) of the Act such an order must be approved in draft form by an affirmatory resolution of both Houses of the Oireachtas.

The need for the draft order now before the House arises from the proposed introduction of decimalisation on 15th February next. The components of the rates of weekly redundancy contributions are not convertible to precise decimal currency equivalents so that the decimalised rates proposed and mentioned in the draft order of necessity represent departures from the existing rates. The proposed decimalised rates are, in fact, the precise conversion rates specified in the whole new penny conversion table contained in the Decimal Currency Act, 1970.

As compared with the existing rates male employees and employers of women will have to pay very slightly more by way of redundancy contributions, whereas women workers and employers of men will be required to pay slightly less. The effect of the new rates on the annual income to the redundancy fund will be slight.

I am sure that Deputies will accept that the rates proposed in the draft order represent an equitable conversion of the existing contribution rates to decimal. Any Deputy who wishes to raise any points or ask any questions about the redundancy payments scheme generally will have an opportunity of doing so in the debate on Second Stage of the Redundancy Payments Bill, 1970, which I hope will be taken later today. In the meantime, I recommend the resolution approving the proposed order to the House.

Mr. P. Belton

I agree that with the change to the decimal system there is no unit that will hit dead on with what was paid before but I should like the Minister to tell us the number of males employed as against the number of females employed. Under the old system the employer paid 8d for a male employee and now it is only 7.2d. I think that is correct. For females it was 6d. I am taking the money as the old money rather than the new money. Where the old rate for men was 8d the new one will be 3p, or 7.2d in old money. For female employees it was 6d and now it is 3p, which is 7.2d. The total amount paid, therefore, was 1s 2d and in the new amount, if you add the two, it will be 1s 2.4d, which seems to be more. I know that there are fewer female employees than male employees but could the Minister not tell us how much the redundancy fund is going to gain on this? If he works out the number of males employed and the number of females employed he can tell us the amount the fund is going to gain. The employer paid 4d for a male worker before this but now it is 4.8d and the female is now 2.4d as against 3d before. Could the Minister not have told us how much the fund would gain or lose by these alterations? Has he got that information?

Mr. J. Brennan

I will give the information on Second Reading of the Bill.

Mr. P. Belton

I thought that, perhaps, the halfpenny might come into it somewhere but if this were used you would still get above or below it. Is it correct that the Minister is trying to keep to the old repayments as nearly as possible? I do not suppose there is any other way of dealing with this. The only thing is that in one case the men have to pay .8p more and for that the employer pays .8p less. For the female it is .6p and the employer has to pay 1.2p extra.

Mr. Tully

We must admit that it was necessary to change in view of decimalisation and nobody will quarrel with that. However, I would quarrel with the system used by the Minister. We were told in this House that no matter what happened when decimalisation was introduced there would not be any increase in prices. All over this country at the present time the sharks are using the change to decimalisation to increase prices. Because of the fact that very many people do not understand decimalisation they frequently find that a penny is added to the bill with the result that prices are soaring. There is a town 30 miles from here and every time a persons pays a bill it is converted to decimals and the customer is told "Well, of course you forgot to add the penny" and this sum is added. In this instance I thought the Minister would make an effort to set a good example and reduce the amount. He could have done that because the Redundancy Fund is running at a surplus of £500,000 per year. The amount by which the redundancy payment is being improved is only £360,000 per year so the Minister could have rounded the amounts down in all cases without adversely affecting the fund. I think the Minister made a mistake in not setting an example in this case. The temptation to get that little bit extra by rounding up prices is bad enough but to do it by catching the employee is wrong. I admit the Minister had to decimalise but I think he made a mistake in rounding up the figures.

Mr. P. Belton

I think the Minister is trying to keep as near as possible to the former amounts.

Mr. J. Brennan

Yes. What I thought the most equitable system to apply was the conversion table which sets out the whole new penny conversion table in decimal currency. That is what we have applied. It results in the employers, in the case of men, getting off with a little less and the workers paying a little more. For women the employers pay more than they did in the past and the female contributors pay a little less. I do not want to go into any detail on this because I shall probably cover it again. The employers' portion, so far as men are concerned, is estimated to be £58,000 less; the workers' portion will be £58,000 more, which leaves no change on the male side. For women the employers' portion will be £46,000 more, the workers' portion £23,000 less, which gives an overall change in the fund of £23,000.

Mr. Tully

Which it did not need.

Mr. J. Brennan

I do not want to go into any detail at this stage on the question of the fund needing the money. The surplus in the Redundancy Fund is something on which one cannot speculate. One cannot gamble very much on it because we must be prepared to meet contingencies at any time.

Mr. Tully

Is the Minister afraid of more closures?

Mr. J. Brennan

I have only to look at the case of England where they ran into deficit and had to increase the rates a couple of times. One can never anticipate when the need for a surplus in the fund would arise.

Mr. P. Belton

I agree it is difficult to have the rates dead on but would the Minister not agree that it would have been better to have rounded down the figure if only for the reason that the Government should set an example to the rest of the people? If people see that the Government are rounding up figures they will certainly not be encouraged to reduce them.

Mr. J. Brennan

I do not think we would have been justified in rounding them down.

Mr. Tully

As the fund has a surplus of £500,000 I think we could have rounded down in this case.

Mr. J. Brennan

I do not want to have to come later and ask for an increase.

Mr. Tully

The Minister will do that eventually anyway.

Mr. P. Belton

If it is necessary to have increases it would be better to do it later rather than to use the changeover to decimalisation as the occasion for the increase. I know the amount is not large but the timing is wrong.

Mr. J. Brennan

It is .6p.

Mr. Tully

Four shillings per year per man may not be very much but if he has not got it it could mean a great deal.

Mr. P. Belton

I realise that the Minister wants to keep to straightforward decimal figures of 3p, 2p and 1p and this I can understand, but it would have been better if the figures had not been rounded upwards.

Mr. J. Brennan

We kept to the table and I think we were justified in doing that. That does not mean to say that by keeping to that table in all other things it will work out as an overall increase.

Mr. Tully

The Government are not setting a good example.

Mr. J. Brennan

It is not a bad example.

Question put and agreed to.