Deputy Noel Treacy has sought and been granted permission to raise on the Adjournment the continuing closure of the PMPA subsidiaries and the redundancy and statutory payments aspects of the situation. The Deputy is confined to that.
Adjournment Debate. - PMPA Group Closures.
I want to thank the Chair for giving me this opportunity to raise this serious situation and to thank the Minister for Labour for coming here to reply. I am disappointed that the Minister for Trade, Commerce and Tourism, Deputy Cluskey, is not here because when I raised this matter I asked that all the PMPA companies should be discussed——
I do not want to interrupt the Deputy, but the Minister for Trade, Commerce and Tourism has no function in the matter because the administrator was appointed by the courts.
I appreciate that and the fact that you have the right to decide what I am allowed to discuss. Last week the Minister for Trade, Commerce and Tourism challenged the former Taoiseach, Deputy Haughey, to debate this situation in this House. In his presence I accepted that challenge and made four efforts to raise the matter. Now I may discuss this situation but I am confined to certain areas. I believe it is impossible to discuss it without taking the group of companies into account. Nevertheless, I am delighted to have this opportunity of doing so now.
When we take the group of PMPA companies into account we realise it was wholly-owned by Irish investors who invested their money to help the Irish economy. These people are now in a very delicate situation because their hard-earned savings are at risk. The PMPA were one of the biggest companies in the country employing more than 2,000 people up to a few weeks ago.
I want to deal with the closure of the garages and the redundancy situation. Last Wednesday afternoon, 17 out of 34 garage managers got phone calls from the administrator saying they should be at a meeting in Dublin at 10.45 a.m. on Friday week. They were told the garages were being closed. Some of these people, and one of them is in my constituency, tried to contact the local union official, a representative of the Irish Transport and General Workers' Union. Despite the fact that he was in the same town as the garage, the union official refused to meet the PMPA worker. I want the Minister to tell the House whether a prior arrangement had been made between the Government, the administrator, Mr. Kelly, and the unions that no action would be taken when these closures were being forced. This was a very unsatisfactory way for the administrator to get in touch with these people.
In my constituency 20 people were affected, 18 of them married. Sixteen of those 18 have mortgages from some of the bigger financial institutions not associated with the PMPA. These people will not be able to make their repayments and they do not know if they will get their statutory redundancy payments or their holiday money. I want the Minister to allay the fears of the 230 workers in the garages and the 130 workers in McCairns and other groups and let them know where they stand and what are their rights.
The company specialised in insurance for many years and moved into the motor industry. If they had confined themselves to these two areas they might not be in their present difficulties. Because they invested in more risky projects, the group of PMPA companies are threatened. As a businessman I appreciate the difficulty that Mr. Kelly faces. He has a duty to consolidate as much of the company as possible and to hold together the PMPA insurance company and provident society.
I would like to point out the effect of the closure of these subsidiaries on the PMPA insurance company. There were no problems on the surface for the ordinary people in the PMPA group until a month ago. Many people had taken out insurance with that company in good faith and they had special concessions granted. I want to know if the vehicle recovery service, the car replacement service and the engineer's report service are still available to all members of the PMPA insurance company. This is one reason why I wanted the Minister, Deputy Cluskey, to be here this evening because the closure of the subsidiaries has a major effect on the PMPA insurance company.
When a company is in difficulties, if it is to be made solvent, or any of its subsidiaries are to be made solvent, the company should be managed in a prudent way. At present there are people of 18, 19 and 20 years of age, accountancy students——
The Deputy is getting into the commercial aspect of the company which is a matter for the administrator. This is an area in which neither this Minister nor any other Minister has responsibility.
If that is the position I regret it but it is very difficult to deal with one without referring to the other. The receiver's company is paid at the rate of £27.50 an hour. These junior staff have come into these subsidiaries and have taken control. They have ignored the other staff and management. I appreciate that the legal right has been vested in them by the courts, but it is a very sad situation that inexperienced people can come in and take over a company——
Anybody can make an application to the court about this sort of thing but it is not relevant to the subject which has been allowed for the Adjournment this evening.
If these companies are to be made solvent and if there is to be any hope of securing the investment in these companies, it is necessary that senior expert accountants be sent into every subsidiary and not first or second year accountancy students who do not have any experience in controlling or managing companies. I want to ask the Minister or anybody involved in business: "Would you allow a teenager or a 20 year old inexperienced person to come in and take over your company?"
I must explain to the Deputy that, in order to qualify for an Adjournment Debate, the matter being raised must be the responsibility of a Minister. What the Deputy is now dealing with is not the responsibility of the Minister for Labour or the Minister for Tourism. By virtue of an Act passed by this House, it is the responsibility of the administrator, who is responsible to the courts. If any complaint is to be made about him it should be made to somebody who has an interest in the business or it should be made to the courts.
I appreciate your point. I am highlighting the position. It is very serious and it affects thousands of people. I want to go back again to the question of staff. The commitment and loyalty of the PMPA to the nation and to the Government has always been exemplary. They paid all their taxes, their PRSI and their VAT properly and in time. The Minister should make it clear that the workers whose taxes were deducted and whose payments were made will be compensated properly if they are to be made permanently redundant.
The PMPA company invested money in a special pension fund for the staff. Are the investments in that pension fund safe and secure, and will the staff benefit from them? If not, what is the position of those investments? There were 9,000 depositors in the PMPA Provident Society and in the region of 2,000 depositors with the Irish Benefit Building Society, making a total of 11,000 depositors. If these 11,000 depositors came from an average of five, at least 50,000 people are affected by the liquidity situation in the PMPA group. I should like the Minister to tell the House whether the investments in the provident society are safe and secure. If not, can he give a commitment that his Government will make every effort to ensure that genuine people who invested money will be compensated?
Other companies under much more stringent law cannot accept money from minors. The PMPA were able to accept money from minors and, as a result, parents making investments for their children's future invested money in the PMPA society. They are not sure whether those investments are now null and void.
I sympathise with the Deputy's efforts to raise matters about which he is concerned, but I must point out that what he is dealing with now is not the responsibility of the Minister for Labour or the Minister for Tourism.
It is very difficult to deal with one matter without referring to the other. I appeal to the Minister to give a de facto guarantee that the staff in the subsidiary companies who are now redundant — and most of these companies are in the country areas, three in my own province and one in my own constituency — will receive their proper redundancy, that their pension investments are safe and that whatever money they are entitled to through the investments they made in the PMPA companies will be honoured in toto by the Government and that they will ensure that the administrator of the company, Mr. Kelly, will pay the staff what they are entitled to.
If I were on the other side of the House — and I was on that side more than I was on this side — I would raise this matter on the Adjournment. In my constituency we have exactly the same problem of people who have been laid off as a result of what happened to the PMPA. Therefore, I have every sympathy with the case the Deputy has made for the employees of the company, and people who have invested their money in the company thinking they were helping the Irish economy by investing in an Irish company with Irish employees. I am totally at one with the Deputy in his approach to the problem and in trying to do what he can for the staff of the company and the subsidiaries. Nevertheless, I am confined in my remarks to the operations of my Department in this instance, that is, redundancies and what follows as a result.
Three hundred and forty-eight employees of various PMPA companies throughout the country were laid off last Friday, 25 November. They had received notice of lay off on Friday 18 November 1983. It is understood that this action was undertaken by the administrator following a detailed examination of the PMPA Group subsidaries which indicated that many were incurring significant, ongoing losses without any realistic prospect of recovery. The administrator has pointed out that under the legislation it is his duty to preserve the assets of the PMPA Insurance Company and to protect it from the ongoing cash drain which was occurring because of the losses in the subsidaries.
The bulk of the lay-offs affected the PMPA Garage Division, accounting for some 234 employees; other PMPA subsidaries accounted for the remainder, 114 persons. Accordingly, the total number of persons laid off on Friday last was 348. The PMPA Garage Division consists of a total of 31 garages of which 17 were closed.
Discussions between the administrator and trade unions representing the workers have taken place and further discussions have been arranged. The administrator is making arrangements to issue statutory redundancy notices to all employees affected by the lay offs tomorrow. These notices will expire on 16 December 1983.
I should point out that some employees to whom these notices will issue would, on the basis of their service with their separate companies, be entitled to longer periods of notice and I have been given to understand that in these cases the administrator proposes to make additional payments in lieu of notice.
I am taking all possible steps to ensure that the employees in question who will be made redundant will receive their full statutory entitlements and I have no reason to believe that they will not receive those entitlements. Officers of my Department are in contact with the administrator of the PMPA group of companies and he is fully aware of the position regarding the statutory entitlements of the employees.
The Deputy has referred to matters to which I cannot reply because they are not covered by the operations of my Department. He referred to contributions to the pensions fund. I am sorry, but this is a matter for the administrator, as are the moneys paid into the building societies. Any investment made in the company is also a matter for the administrator. I am sorry I cannot expand on what will be the outcome in that area.
I cannot tell the Deputy the position with regard to the vehicle recovery service and so on. I will look into it and let him know as soon as possible. Because of the amount of notice given to me I cannot give him that information at the moment.
The Deputy has asked me to give guarantees. I can certainly tell him here and now that statutory redundancy payments, minimum notice and holiday pay will apply to the members of the PMPA garages division who have received their statutory redundancy notices. That, at least, is information which the Deputy will be keen to have and which will be of some little help to those who have been the victims of this unfortunate demise of the PMPA garage division, in so far as it affects the 17 garages. That is as far as I can guarantee, where my Department are concerned. It is of some benefit to know that that will be the case and I can give that assurance to the Deputy.
The other questions which he has asked are either matters for the administrator or, in the case of the vehicle recovery service, something on which I shall get the up to date information for him as soon as possible.
There was one very relevant question which the Minister has not answered. That was whether or not there was a prior arrangement between his Government, his Department, his administrator and the unions about the way in which these closures would be brought about.
I am not aware of any agreement whatsoever on this basis. I can state categorically that, where my Department are concerned in dealing with industrial relations, no such agreement was made between Government, unions and the company as to the way lay-offs or closures were to be made. The discussions at present continuing between the unions and the administrator is an area in which the unions and the administrator have their own rights under industrial relations law.
There has been no conspiracy of any sort in this area to bring about any closures in any sector of the company. It is purely the administrator's decision and that is the only answer that I can give.
Is there any substance in the fear which some workers have that a technical point could be adduced to deprive them of their redundancy money?
I cannot at the moment envisage any technical point which would do this. Even if the company were totally insolvent, the workers would receive their redundancy payments direct from the Department of Labour——
I know that.
——unless somebody's period of work in the company was so short as not to allow him——
That is not the point.
——to receive it. That would be the only way in which I could see a person not receiving his redundancy money. As far as I know, for the numbers that I have given here, there can be no technicalities which would deprive anybody of redundancy money.
The Dáil adjourned at 5.30 p.m. until 2.30 p.m. Tuesday, 6 December 1983.