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Dáil Éireann díospóireacht -
Wednesday, 3 Oct 2001

Vol. 541 No. 2

Adjournment Debate. - Factory Closures.

The Peerless Rug factory in Athy, County Kildare closed on 7 July with the loss of 65 jobs. Some of the workers who lost their jobs in that closure had been with the firm for 27 years. The workers were offered statutory redundancy payments only. They then found that moneys from a savings fund to which they had contributed were being returned to them in the form of cheques drawn on the company's account, but those cheques were not honoured. There is a question as to how moneys that were being routed into a savings account for the workers fell to be repaid by cheques on the company's account. I will return to that point in a moment.

Many workers found that insurance premia, which they understood were being paid by deduction from their wages, had not been paid to the insurers for some time. I am not quite sure what the length of time was but it was certainly a period of some months.

Prior to the closure of the plant in Athy, equipment was moved from that plant to another plant owned by the same principals. This was equipment that was required for making the products at the Athy plant. Today, products that were previously manufactured in Athy are being produced in other plants owned by the same principals.

It is no wonder that in addition to the shock of finding themselves unemployed, the workers from Peerless Rug feel a deep sense of injustice about how they have been treated. They took various kinds of action, including seeking an improvement in redundancy payments through the Labour Court. They did what the Government invariably recommends in dispute cases – they pursued the industrial relations machinery of the State.

The principals of the firm failed to attend either of two Labour Court hearings and in their absence the court recommended that the workers should be paid statutory redundancy plus three weeks per year of service. To date, no action on this recommendation has been taken by the principals.

Last month I wrote to the Tánaiste and Minister for Enterprise, Trade and Employment to ask her what steps she would take to ensure compliance with the Labour Court's ruling. I received an acknowledgement dated 11 September, but nothing since then. I would like a substantive reply now. The workers demand such a reply. This is a particularly urgent matter since the workers used the industrial relations machinery of the State. They were vindicated by the Labour Court which made a recommendation but so far we have not seen any action on foot of the Labour Court's recommendation. In the absence of the Tánaiste, perhaps the Minister of State can tell me whether any investigation has been carried out into the circumstances in which the workers' payments into a savings account appear to have gone into a company account rather than into a separate account? If such an investigation has been carried out, what have been the results and is any action contemplated? Is this a case of misapplication or misdirection of funds, or is something more serious involved? What are the obligations of the principals – who are still in business with several other companies – concerning insurance premia, apparently deducted from workers' pay cheques but not passed on to the insurers?

I recognise that the Tánaiste met workers from Peerless Rug some time ago. She listened to them with apparent understanding, although I do not know if she listened with any sympathy. However, there has been no action so far from the Tánaiste. The workers used the State's industrial relations procedures and were vindicated. The Tánaiste must have had some purpose in mind when meeting them, so I want to know what action is being taken to give effect to the Labour Court's recommendation. What investigations, if any, have been undertaken into the savings fund and the insurance premia? Can the Minister of State give any indication of the action that is being taken to improve the lot of these workers?

I thank Deputy Dukes for having raised this matter. I am aware of the issues surrounding this case because I met briefly a number of the workers today when Deputy Power introduced them to me on a visit to Leinster House. As the Deputy is aware, in May this year Peerless Rug announced that the company would close on 20 July. The reasons given related to the competitive nature of the business, resources and associated costs. I am informed that the company offered to pay statutory redundancy entitlements to its employees but the offer was rejected by the employees who had sought 8.5 weeks pay per year of service in addition to statutory entitle ments and the 2% increase payable under the PPF since 1 April this year.

The issue was referred to the Labour Relations Commission and conciliation took place on 21 June. No agreement was reached and the dispute was then referred to the Labour Court. The matter was heard on 9 July, following which the court issued its recommendation. The company was represented at this hearing by its receiver who was appointed on 4 July. The court recommended that the company pay the employees three weeks pay per year of service plus statutory entitlements.

With regard to the Labour Court recommendations, I stress that the Labour Court is not a court of law. It operates as an industrial relations tribunal, hearing both sides in trade disputes and then issuing recommendations setting out its opinion on the dispute and the terms on which it considers the dispute should be settled. While these recommendations are not binding on the parties concerned, the parties are expected to give serious consideration to the court's recommendation. Ultimately, however, responsibility for the settlement of a dispute rests with the parties.

My Department has no function under the Redundancy Payment Acts regarding payments over and above the statutory amounts. Responsibility for the payment of statutory redundancy entitlements rests with the employer, in the first instance. In the case of Peerless Rug, the receiver advised my Department in mid-July that the company was insolvent and unable to pay redundancy entitlements. Therefore, my Department paid all eligible employees their statutory lump sum from the social insurance fund calculated in accordance with the Redundancy Payments Acts, 1967 to 1991. I am pleased to inform the House that all statutory payments were made by the end of August.

The Deputy acknowledged that the Minister visited Athy on 12 July and met the workers at Peerless Rugs. On 12 September she announced that Enterprise Ireland and FÁS would each provide £20,000 for Kildare County Council for the recruitment of an executive by the Athy investment, development and employment forum. This new executive will make a major contribution to the development of Athy and help develop a series of responses to the socio-economic issues being faced by the town.

Deputy Dukes raised some issues regarding the savings fund and insurance. I will make inquiries and come back to the Deputy regarding these issues.

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