Vol. 410 No. 7
5 Mr. T. O'Sullivan asked the Minister for Labour whether, in view of the recent upward trend in redundancies, he will hold discussions with the social partners to consider measures to reduce the level of redundancies by providing financial incentives for flexible voluntary work sharing options, having regard to the Labour Party's proposed work reorganisation scheme, 1989 (details supplied); and if he will make a statement on the matter.
Redundancy statistics have shown in the first six months of this year an increase compared with the same period in the previous year. The figures for May and June 1991, however, show an improvement over those of recent years. I should also add that the redundancy figures stabilised in 1989 and 1990 at about 13,000 as opposed to figures of the order of 30,000 in 1983 and 1984.
With regard to flexible voluntary work sharing, as I mentioned recently in reply to another parliamentary question, it is clear that the expansion of part-time employment, reduced working hours, job sharing and other proposals in that sphere, offer many advantages to certain groups in society, as well as contributing to the more efficient functioning of the labour market. I feel, however, that the increased use of work sharing as a way of distributing available employment is primarily a matter for negotiation between employers and workers' representatives or individual employees. In any consideration of work sharing, it is imperative that regard should be had to potential cost implications and to the need to improve the competitiveness of Irish goods and services internationally.
I think the Minister will agree that redundancies have been a major contributory factor to the present unemployment figures. While it was a very good scheme, it has been abused by companies who were profitable and have used the scheme to increase profitability. That applies to both the private and public sectors. Likewise companies who have been in receipt of major grant aid from the Government have shed jobs. It is not in the context of the Minister's recent question of job sharing. We are talking about something entirely different. We are talking about part-time work as an alternative to redundancies where a certain number of jobs would be available in a company and would be shared until there was a pick-up in business. That is what I have in mind. The Minister has evaded that. Perhaps he will respond directly to that aspect of my question.
Over a number of years I have been very critical particularly of large firms who have used the redundancy scheme rather than diversifying into other industries. I had a great debate in public with one major company in 1988 and I think they see the folly of the ways they followed. However, I am not going to pursue that.
I have examined the proposals Deputy O'Sullivan has made available. I would have some difficulty not with the concept but with the cost or feasibility of putting them into operation. I am not saying the redundancy system is perfect but I do not believe there is any bonanza for people who are made redundant. The proposal in Deputy O'Sullivan's position paper — which I welcome as an effort to do something constructive and I am not criticising the preparation of the document — would make the system more cumbersome and would involve financial difficulties.
Let us say for the record that under the present system a person made redundant gets a half week's pay up to the age of 41, a full week for those years served over age 41 and an additional week. By and large, it is not a bonanza for anyone. In the schemes mentioned in Deputy O'Sullivan's paper we would be talking about a week's pay for every year served over 25 years of age and five weeks' pay on top of that. That would not do away with redundancy schemes. In my reading of the document, if a company ran into difficulty even after the three year mandatory period provided in the document, a person would still use the redundancy scheme. The Deputy also suggested that the rebate scheme be switched from the present 50 per cent to 65 per cent. The difficulty is that someone has to pay and the social insurance fund would have to be reimbursed fairly massively to do that. I see some wisdom in trying to convince people not to go the redundancy route, and I will continue to look at ways of doing that. The Deputy's paper is a long one and I have studied it in detail. If he wishes I can give him my reply here.
With a view to stemming the flood of redundancies and as a means of tackling the unemployment problem, it is necessary for us to conserve existing jobs. We should try to prevent or at least discourage further redundancies. The Minister spoke in terms of a week's pay per year of service. We have had the experience of companies paying up to nine week's wages for one year of service. This is the type of offer that workers cannot refuse.
We must proceed by way of question.
I am trying to make my point to the Minister. It is not usual for people to get one week's wages for one year of service. Maybe we should welcome the fact that a person will get a windfall after a number of years' service but effectively what is happening is that people are being encouraged to become redundant, and that is a much greater cost factor. As regards the rebate system, it would be much better to pay 65 per cent and keep people at work rather than pay them social welfare. It is with that in mind that the paper was drafted.
