Dáil Éireann díospóireacht -
Thursday, 28 Jun 1990

Vol. 400 No. 6

Ceisteanna—Questions. Oral Answers. - Compensation for Loss of Employment.

Michael Bell

Ceist:

15 Mr. Bell asked the Minister for Labour the manner in which the Statute of Limitations is applied by his Department, in relation to payments from the social insurance fund affecting compensation payable under the Protection of Employees (Employers' Insolvency) Act, 1984, with particular reference to awards of the Employment Appeals Tribunal which arise from dismissals since 22 October 1983, and for which special provision was enacted in section 4 (2) of the Protection of Employees (Employers Insolvency) Act, 1984; and, in view of his reply to a parliamentary question of 23 May 1990, on the scope of the legislation, which differs from the reasons given to and accepted by Dáil Éireann for that ministerial amendment to the Bill, if he will indicate the effective steps proposed to be taken by his Department to safeguard and secure the payment of compensation for workers who have lost their jobs since 1983, and of the payment of awards made by the tribunal, notwithstanding the statute of limitations.

Michael Bell

Ceist:

20 Mr. Bell asked the Minister for Labour if his attention has been drawn to (1) the provisions of the Redundancy Payments Act, 1967, as amended, which enable him to make redundancy lump sum payments to employees where employers, including fly-by-night or informally insolvent firms or companies, failed to pay the lump sums in cases where the employees concerned had taken all reasonable steps, other than legal proceedings, to obtain payment of the lump sums, (2) and the fact that employees of those delinquent firms have not yet been paid compensation due under the Minimum Notice and Terms of Employment Act, 1973, for want of proper notice of dismissal; if he will now promote primary legislation in this parliamentary session to enable compensation for lack of minimum notice to be paid from the fund where the employee has taken all reasonable steps, other than legal proceedings, to obtain payment of the compensation as in the Redundancy Payments Act; alternatively, if he will promote measures for a decision of the Government to anticipate amending legislation as previously occurred in relation to Section 8 of the Redundancy Payments Act, 1971, in view of the number of awards of the Tribunal since 1983, which are not being paid from the fund.

Mr. B. Ahern

I propose to take Questions Nos. 15 and 20 together. To date the statute of limitations has not applied in relation to claims under the Protection of Employees (Employers' Insolvency) Act, 1984. There are, however, provisions in the 1984 Act which impose time-limits and these must be applied.

As I explained in my reply to the Deputy on 23 May 1990, following detailed examination of the matter, I have concluded that it would not be feasible to make regulations to extend the scope of the 1984 Act to so-called "informal insolvencies". There are a number of issues involved which could give rise to difficulties. The main reason, however, for my decision is that I have received legal advice to the effect that it would not be feasible by regulation to extend and implement any defination of employer's insolvency beyond those categories set out in section 1 (3) of the 1984 Act. Primary legislation would be necessary for that purpose and I have no proposals for such legislation.

The Deputy refers to a provision in the Redundancy Payments Act, 1967, which enables the payment of a lump sum from the Social Insurance Fund direct to a qualified employee where the employer has failed or refused to pay. I must point out that there are significant differences between the functions of the two Acts and in the way in which they were drafted. The Protection of Employees (Employers' Insolvency) Act, 1984, was designed to protect certain employee entitlements solely in cases of the insolvency of the employer. The provision referred to in the Redundancy Payments Act was designed to cover all cases of failure to pay the statutory entitlement regardless of the reason for the failure. As I have stated earlier, it is not feasible to incorporate into the Protection of Employees (Employers' Insolvency) Act, 1984, provision for making payments in any cases other than in cases where the employer is insolvent as defined in the Act.

There is provision in the Minimum Notice and Terms of Employment Act, 1973, which enables me to institute and maintain proceedings on behalf of employees who receive favourable awards from the Employment Appeals Tribunal and many successful cases have been instituted. There are cases, however, where it is clear from the legal advice that there is no prospect of recovery on behalf of the employee. I must be guided by the legal advice in any particular case.

Mr. Bell

The two questions are set down under separate headings because they cover two separate sets of legislation and it is virtually impossible to straddle them with one question. Has the Minister any indication — from the records of his Department or from officials — as to the amount of moneys outstanding to unfortunate workers who have lost out substantially under the redundancy and minimum notice legislation? Is there any way in which outstanding moneys can be paid to these unfortunate workers?

Mr. B. Ahern

We had the figures for such cases in relation to a previous question. I do not have them with me but I will send the information to the Deputy. When the Act was going through, the previous Minister for Labour hoped that in section 4 (2) a way could be found of tackling the fly-by-night operators. Unfortunately, it is not just a matter of the law in relation to labour or the Social Insurance Fund because it also involves the laws on bankruptcy and winding up and their implications for the individuals and companies involved. It includes a whole range of complex issues and procedures and the Attorney General's advice is that, even by amending the regulations, we cannot achieve what was hoped for when the matter was discussed in 1984. The State does not have the power to intervene under the powers in relation to the legislation on social welfare and in budget financial resolutions but, even if they had, if they paid some of the debts which arise in insolvency cases they might be lumbered with the lot. It has been the view of successive Attorneys General that this would be the case, so I am not just talking about money under the employers' insolvency fund. We would be getting into the issue of bankruptcies, and the courts would not be able to distinguish between them. This was the advice in 1984. It has been raised a number of times since but it is still the position.

Mr. Bell

Will the Minister agree that the main problem is that, in the majority of these cases, even if the employee who is declared redundant or loses through minimum notice were to establish a case against an employer, in the vast number of cases there is no money to meet the payment? In many of these cases, some employers, particularly in the building trade, have set up businesses in London, Manchester or other cities. They are operating and making substantial profits but, because they are outside the jurisdiction, these unfortunate people cannot claim against them.

Mr. B. Ahern

Deputy Bell is right; that is why I answered the two questions together. With regard to the issue of minimum notice highlighted in the Deputy's question, I would say that is precisely what happens in informal insolvency cases. I took the policy decision that whenever somebody does not pay up under the provisions of the 1973 Act the Department takes such a person to court. I know that perhaps not all Ministers for Labour took such action; nonetheless I felt an obligation on me to endeavour to do so. In the case of informal insolvencies it has been my experience that one can never extract a penny from the people involved, that all one does is pursue legal action, that if one can even trace the people to bring them to court one is doing well. Unfortunately while the provision of the Protection of Employees (Employers' Insolvency) Act, 1984 covered a lot — and constituted extremely good legislation initiated by the previous Government — on this particular aspect it cannot have the desired effect without incurring all kinds of other extensive costs. We have been endeavouring for the best part of six years now to find a solution, which would appear to be an impossibility.

Mr. Bell

Would the Minister agree that perhaps this could be dealt with by way of a second stage tribunal whereby such tribunal could examine the implications of cases awarded previously so that provision could be made within existing legislation for such tribunal, comprised of employers and trade union representatives, to make an award? Would the Minister agree that this would mean that, under existing legislation, regulations could be enacted in order to effect payment from the Social Insurance Fund?

Mr. B. Ahern

When I effected amendments some years ago I undertook to have the matter re-examined even though the matter had come to a close at that stage. I am prepared to examine any suggestions. It is a highly complex matter, invoking bankruptcy and company law legislation far beyond what was envisaged at that time of the passage of the Protection of Employees (Employers' Involvency) Act, 1984. I will ask the Attorney General to examine the points the Deputy has raised.