Vol. 117 No. 12
I move:
That Seanad Éireann calls on the Government to amend the Local Government Acts to ensure that local authority employees, who are put on short-time working, will be treated as a special case and do not suffer any reduction in their entitlements to pensions or gratuities.
Senator O'Shea, I understand that you have 20 minutes, and ten minutes to reply at the end.
When the Labour Party put down this motion it was against the background of the 9 per cent reduction in the rates support grant to local authorities in 1987. Now with the announcement of a further 14 per cent reduction in the rates support grant which, coupled with inflation of 3 per cent and a 2½ per cent increase in pay the cut in real terms will be close to 20 per cent for 1988. These two cuts are having horrendous effects on local authorities in terms of the services which they provide and in terms of their levels of employment. One of the local authorities of which I am a member, Waterford County Council, would require an extra £1.9 million in 1988 to retain services at the 1986 level.
Waterford County Council have a water charge of £85 which, I understand, is the highest in the country. Yet this year Waterford County Council had 230 of their staff on short time working. Waterford County Council have a very narrow commercial rates base and, therefore, are exceedingly vulnerable to cutbacks in domestic rates support grants and in particular in agricultural rates support grants.
The representations from the unions in Waterford County Council have been responsible for this motion appearing on the Order Paper. Basically, the motion is concerned with pension and gratuity entitlements of local authority employees who have been involved in short time working or in lay-offs. I have established from the Irish Transport and General Workers' Union that in the present year six local authorities, where they have members, have been involved in short time working.
The Irish Transport and General Workers' Union are the major union involved with local authority employees. Indications are that at least ten local authorities will be involved in short time working in 1988. This is an area which I ask the Minister to clarify. Is it part of the Programme for National Recovery, which is being voted on by individual unions at the moment, that we are to have no compulsory lay-offs in local authorities? Would the Minister clarify that this is the position? Certainly, in the local authorities I have knowledge of, short time working is a very distinct possibility.
Getting back to the substance of the motion, in effect local authority employees must have 200 days' service in one year to qualify for full pension and gratuity. Normally, local authorities would have 260 service days in the course of the year. They pay superannuation contributions on the extra ten days, but these days are absolutely no use to them as they cannot carry them over into another year when they may be short. For pension purposes, a full year's service brings entitlement to 1/80th of pension and 3/80ths of gratuity. However, each day lost under 250 days will result in a loss of 1/250th of pension and gratuity entitlement. Where local authority employees have opted for short time working rather than redundancy they are being unfairly penalised. Not alone do they suffer loss of wages, but they also lose pension and gratuity rights.
The Fianna Fáil amendment which has been put down to this Labour Party motion needs to be clarified. Is there a categorical guarantee from the Government that, where a local authority do not achieve sufficient redundancies or early retirements to provide within their budget the required money for a full year's pay for the remaining workforce, short time working or lay offs can be avoided? I know from senior trade union officials that redundancies or early retirements will not be accepted where lay offs would occur in the remaining workforce. In fairness to local authority employees, there is an urgent need for clarity.
Senior trade union officials have communicated to me a great concern because local authorities cannot pay salaries for all of 1988. Service charges will not yield any significant additional amounts where charges are already high and budgets have been devastated by the Fianna Fáil cutbacks. Local authorities are being destroyed. Consequently, the services which the community now enjoy will either be withdrawn or diminished to totally inadequate levels.
New local authority housing is virtually stopped. I am a member of Waterford Corporation. No new starts were made in 1987, nor will any new starts be made in 1988. In Waterford County Council I understand that, instead of the 50 houses we built per year during the term of the last Government, five houses per year will be built.
I would also like to refer to the recent circular regarding local authority loans. Forty per cent of local authority loans are being pushed off into the private sector. I understand that the local authorities will get only 60 per cent next year compared with what they got this year and £55 million is to be provided by the banks and building societies. Obviously, the people who will come back to the local authorities for loans will have most difficulty in meeting the requirements of the banks, and hence will have a lot of difficulty in reaching repayment targets for the local authorities. Now that the fixed interest has been withdrawn, taking a £21,000 loan there could be a swing of £90 in interest repayments per month. This would be absolutely devastating to people earning under £10,000 per year.
Roads and infrastructure generally are being underfunded. We did not have any surface dressing done in Waterford County Council last year. There was no site cleaning done on roads. It is a matter of pride to all members of Waterford County Council how well our roads have been kept in the past.
In general, I submit there is little logic in the redundancy and early retirement package. People going on early retirement will have to be paid their pensions. There will be the loss of the PAYE and PRSI contributions to the State.
Another area to which we should apply ourselves is national investment in our local authority housing stock, which is a huge investment. At the moment there is a cutback in the maintenance of these houses. We are failing to service our investment. That brings a consequent loss to the State as well.
Our roads are deteriorating and, more important, the development role of local authorities is also being undermined. A circular was issued by the Minister in August seeking that local authorities would put more resources into pollution control. This is hardly possible when we will, very obviously, be losing engineering staff.
There is one small river in County Waterford on which there are 80 potential pollution sources. To monitor each of those, even three a day would be quite reasonable. We do not have the resources, much as we would like to do even that, much as we support what the Minister is seeking to achieve. We must have the resources to do it.
I believe that, if local authorities are to have any future, we need a new revenue base. In recent days we have had the returns on the market survey carried out on behalf of the ICMSA regarding the land tax. It emerged that two-thirds of farmers were in favour of the land tax. The legislation exists already for the land tax. According to the farmers' own figures, about £30 million a year is going to accountants to have farmers' accounts processed. An average of £460 each is being paid by farmers for their accounts. One in four of these would not have any taxable income and would have no tax to pay.
In the days when we had agricultural rates small farmers were always to the fore in paying their rates. They had a very honourable record on prompt payment. Speaking to small farmers in my own area, I have been told they would be very much inclined towards the idea of the land tax and that land tax should be paid to local authorities as an addition to other sources of funding. People paying the tax would see, at close hand in terms of county council services, a return on their money and see what their money was actually doing. We have an undertaking from the Government that the idea of a property tax will be looked at in 1989.
I submit that the damage done in 1988 will create a situation which is virtually irretrievable. It will be impossible to get back to the standards, staffing levels and services we are providing at the moment. If the Minister and the Government have given an undertaking, which, I understand, was given during the talks on the Programme for National Recovery that there will not be any compulsory layoffs with local authorities, could the Minister give an undertaking that he will exercise his ministerial discretion regarding the loss of service time of local authority employees?
For instance, if local authority employees lose service time through strike action, it is invariably a condition of resumption that those service days will not be lost for pension and gratuity purposes. If there will be no compulsory or mandatory redundancies, and where local authorities opt for keeping their workforce together in expectation of the day when further finance from some other source will be available, be it a property tax or the reintroduction of the land tax, and where local authorities decide on short time working or lay offs, surely in terms of natural justice the people who opt to hold their jobs and to stay at work, should benefit.
We hear a lot of criticism about people not having the will to work. When we are talking about people who actually want to hold their jobs, surely the Minister for the Environment, who is the relevant Minister, should help those people and grant them the justice of holding their full pension and gratutity entitlements.
I am horrified at what is happening to local authorities. The days of town commissioners are numbered. Town commissioners — and I am a member of Tramore Town Commission — are not spending authorities, as such. Bodies like the Tramore Town Commission, where political divisions are left aside and people gather together around the table to promote various projects on behalf of the area, can be quite successful as pressure groups. If they are not there, an impossible situation arises for county councils because you will have people in the community going to county council officials and saying: "I represent so and so", with no particular mandate.
I also believe that the smaller urban councils are in real trouble. Some of them have staffs as small as three and, with the redundancy package on offer, if people opt for the redundancy package or for the early retirement, how can they possibly continue? On present funding and on present trends there is no way local authorities can continue beyond the next couple of years. I put it to the Minister that he has a responsibility to these good and faithful servants whom some people like to castigate. In my experience they are a very efficient and effective workforce. Because the Government unilaterally decide to withdraw funding and to renege on a commitment given in 1977 when rates were withdrawn — and Fianna Fáil were always to the forefront in saying that central Government should provide sufficient moneys for local authorities — there is a responsibility to these people. They are people who have already lost pension entitlements and gratuity entitlements. The Minister has discretion to regularise that position.
I also ask him to clarify the ongoing situation. Will there be mandatory lay-offs where local authorities operate inside their budgets? Where they do not get sufficient redundancies or sufficient early retirements, will he throw to the wolves, in terms of their pension entitlements and their gratuity entitlements, the people remaining on the staff? These are people who have a commitment to the work ethic and a pride in what they do. Both Houses of the Oireachtas should do everything possible to help.
I second the motion in the name of the Labour Party Senators. We chose this motion, not because it is one of the euphoric subjects that abound every day about all the various cuts in education and health and so on. We are concerned, in consultation with staffs and staff representatives in the local authority area that, because of the fundings which have been notified by the Minister and his Department to the county managers and the county council members by way of their rate estimates, it is inevitable that some members of staff in the coming year will be on short time working. We are concerned that, because of this situation which is outside their control, it is possible that with a loss in the number of days, their entitlements under the Superanuation Acts will be jeopardised. The Minister accepts this in the amendment from the Leader of the House.
It is noted that only paid service is reckonable for superannuation purposes under the local government superannuation code in accordance with a superannuation principle. We know that. That is why we have put down a motion requesting consideration of the amending of the Act to take into account the very special circumstances that will arise. It is inevitable that it will arise.
We are satisfied that a precedent has already been set by other public service bodies in the semi-private sector or semi-State sector. Bord na Móna in particular have had short time working. Following the disastrous weather of 1985 and 1986 certain sectors in Bord na Móna were forced to go on short time. Part of the settlement at the time to accommodate the workers in the industry was that, if the workers agreed to go on short time to get the board out of their difficulties, some of that short working time would be reckonable for superannuation purposes. That happened in Comhlucht Siúicre Éireann Teoranta too. It happened in the Thurles beet factory in particular where workers on short time were told their service was protected for superannuation purposes, in the knowledge that the employees would be returning to the service as soon as finances improved or work was available. We are not looking for anything spectacular in this regard. We are looking for something that has already happened in the semi-State sector.
We have had discussions with the professional people representing the workers in this area. I am the son of a road worker and very proud of it. I am very proud of the fact that he was dedicated to his work all his working life. I know how hard they worked in the days when they had to break stones for a living. They did not grind them as they do now with big machines. I note that the Minister is talking about the voluntary redundancy package and the early retirement package he is offering to people on the basis that there is nothing compulsory about it. Looking at the Estimates it is inevitable that managers will be requesting unions to ask members to go for early retirement or voluntary redundancy.
As my colleague Senator O'Shea said, if voluntary redundancies are not accepted and if in the striking of our rates — and you will find responsible Labour Party members on councils — within the parameters laid down by the Department, and taking into account the reduction in the rates support grant, which would not double or treble water charges or cripple small shopkeepers and others in the rateable valuation sector, the manager does not have sufficient funds to retain his full workforce he will be forced to put some of them on short working time. In such circumstances it is not unreasonable that, in the interests of fair play, we should ensure that time lost to them would be reckonable for superannuation purposes.
While I am certain these things will happen I sincerely hope I am wrong and that this time next year the Minister will have proved his own point. The reduction in the environmental budget is almost £100 million in the Book of Estimates in page 31. It is £93.859 million. In the rate support grant there is a reduction of 12 per cent, now reckoned to be 14 per cent.
The new figure for 1988 is £225 million. It is a reduction from £256 million. We have to take that into account. If I go to the capital budget and look at the amount of money that has been allocated for road improvement schemes there is, in fact, a reduction of over £16 million for roads for this coming year.
It will be argued that in road repairs, especially major road and primary road works and by-passes which are all vital, the actual employment content might not be as great as some of these figures would indicate. A lot of machinery is used, but there is a nucleus and a hard core in the workforce that will be required on the national primary road section of all the county councils. They would be considered to be permanent employees.
The public are aware of the fact that the Government published a national road plan, going into the nineties. Either the Minister is reneging on that plan or reneging on a previous Minister's commitment to ordinary servants. I am sorry to have to use that word but that is the word used by the Department for employees in the sector of local authorities who are not, in fact, officials, county managers or county engineers, but ordinary road workers. They are referred to under the Act as "servants". They were given a status by a predecessor of the Minister's, Deputy Liam Kavanagh, in writing and honoured by the Government of the day. I hope it will be honoured by the Minister and by this Government. Employees have some rights in the area of expecting to continue to work in the jobs which they have and in which they are performing well. Unless they misbehave they should be considered to have some form of permanency of employment if at all possible.
If the Minister is saying there will be no compulsory redundancies and a previous Government said that for the first time road workers would have a semblance of permanency in their workplace, we have a problem. The Minister would want to address it as the motion requests him to do. By ministerial order he could try to ensure that in circumstances outside the control of the employee, account would be taken of their very special circumstances for pension purposes. Their pensions are small enough when they retire after years of hard work which is often criticised, as Senator O'Shea stated, by the public at large. They do important work on county roads and on minor roads. We do not have enough people doing that kind of productive work to stop road flooding, to clean county roads and remove bushes from them, to get flood water off them, to stop aquaplaning and to prevent road accidents and all the things we would like to see done.
The Minister will have our support for employing workers where they can be seen to be giving a service to the people. People are prepared to pay for the service. In the past, 99.9 per cent of ratepayers across the whole spectrum — in my own county in particular and I am competent to speak about this — paid their rates which funded local authorities effectively. This left a lot of discretion to members of local authorities on how to spend that money effectively and efficiently. Because of the change that has taken place and the withdrawal back into central Government of the system of funding of local authorities, the Minister has removed some of that control. This is why we are saying that, with the controls he now has within his Department and by ministerial order, we hope he will take account of the sentiments we are expressing in the motion. This is not an unreasonable request and we sincerely hope that, when the Minister is replying, he will confirm the points made by Senator O'Shea and take on board the reasonable case we are making which would not cost very much money and accept a principle that has been accepted in the semi-State sector already.
I move amendment No. 1:
To delete all words after "Seanad Éireann" and substitute the following: "takes note that only paid service is reckonable for superannuation purposes under the Local Government Superannuation Code, in accordance with a superannuation principle, which applies to pension schemes throughout the public service generally, and recognises that action has been taken by the Minister for the Environment in the implementation of the voluntary redundancy/early retirement package to facilitate the termination of existing or proposed short time working by local authority employees."
The granting of pensions or gratuities to local authority employees is governed by the statutory provisions of the Local Government Superannuation Revision Consolidation Scheme, 1986, and the Local Government Superannuation Act, 1956. In accordance with those provisions and in line with the superannuation principle which applies to pension schemes throughout the public service generally, only paid service is reckonable by local authority employees for pension or gratuity purposes. The question as to whether periods of absence due to the operation of short time working arrangements should be allowed to reckon as pensionable service by local authority employees was considered in 1982 by the Working Party on Local Authority Superannuation and an amendment of the existing provisions was not recommended. The question was also raised during the periods in office of previous Administrations and, after full examination, it was accepted that it would be inappropriate to change this fundamental superannuation principle.
The amendment outlines the statutory position and shows the Minister's concern that short time working by local authority employees should be terminated as soon as possible and it indicates the action he has already taken in this regard. The contributions by the two previous speakers were fairly wide-ranging, I should like to refer to some of the aspects they covered in my brief contribution. I understand Senators are limited to ten minutes. I do not think anyone would question my sympathy for local authority workers. Senator Ferris mentioned that his father was a local authority worker. My father was a local authority worker also, so I have something in common with the Senator. Not alone that, I have experience of working on the roads of County Meath with a shovel. Many people may feel it is a pity that I got beyond that point. Later I reached a stage where I was designing the roads, and many of the main roads, of County Meath. Indeed, at that period I was a member of a union.
Senator O'Shea mentioned that the union in County Waterford are responsible for this motion. I was a member of Jimmy Tully's union — the Federation of Rural Workers. I left it as a fully paid-up member. I have a record in the House of calling a spade a spade and in paying tribute where it is due. I realised even then and understood the great work the union had done. I was a shop steward in that union. I was conscious at different times of the good work they did and I saw, during that period, the union bringing dignity, not alone to the roadworker, but to the families of the roadworker. I have always acknowledged that fact.
There cannot be any doubt about my sympathy for the roadworker. Indeed, Senator Ferris mentioned the "stonies"— I did not work as one, but I saw them working. Shortly before my time, many of them came from the West and they worked hard and were not very well treated. They worked with their hammers by the side of the road and got badly paid for it. The "stonies" with the chisel sometimes carved out objects that are works of art now. Tribute has been paid to them in Stone Mad and in other publications. The “stonie” who worked hard in those periods by the side of the road and got badly paid for it, deserves a tribute. I would like to pay tribute to all local authority workers. Nobody would question the contribution they made and unfortunately, they were very wrongly the butt of jokes over a period. They had certain skills which are irreplaceable; they did marvelous work.
While being concerned in this particular area, the Government must have concern on a broader front. In dealing with employees of local authorities we must bear in mind that very many people are unable to get employment of any kind; they must be considered. This area of legislation requires updating or amendment of some kind. We must look at other areas such as short time for example. My staff are on short time; there is a general problem there and this area might be looked at. In the area of redundancy, for example, where an employer is reimbursed to the extent of 60 per cent, a case could be made to increase this amount so that the employees could get better terms and more time would be allowed per year. Many reforms in this area could be considered, not just one type of employee.
Senator O'Shea referred to local authority loans and the arrangements the Minister has made with regard to contributions by the building societies and the banks. I welcome that. That will do great good. Also the Minister indicated that the fixed interest clause will be changed. Again, I welcome this because obviously when interest rates go down it is to the advantage of those who borrow that the rate would not be fixed. I look forward to further clarification of this scheme. Those in the construction industry and people who want to build houses will welcome it.
It is impossible to cover everything. Roads have been referred to and also their deterioration. I want, as I have done before, to congratulate the Minister on the great improvement in roads. There was a period when it was impossible to travel, particularly on county roads because of potholes. We had a debate in this House in that regard. By reason of the fact that he made finance available for that problem, the Minister has overcome it.
I would like to spend some time on the question of farmer's tax but obviously I do not have enough time. I was one of those who felt that the land tax would be a great asset to farmers, but again I was one of a large number of people called to the Beechmount Hotel in Navan by farmers to canvass against that provision. I felt that the genuine farmer would benefit from the land tax and that not all those who own land are farmers. I would like to develop that theme but obviously I do not have enough time. When this option was available to farmers and they canvassed against it, it is hard to understand now why they are going back on that. We all share the Minister's concern about this problem.
I would like to thank all those who have contributed so far to the debate which is of particular interest to me. The debate may have strayed a little from the original wording of the motion but it is all interesting and timely in so far as many of our authorities are concerning themselves with the estimates at this time. I will confine myself to the motion and to the amendment.
The introduction of measures such as short time working is entirely a matter for each individual local authority having regard to the level of their work programmes and the financial resources available to them.
Having said that, I would like to make it clear that I am anxious to see that any short time working which has been introduced by local authorities should be ended as quickly as possible. It would also be my aim to ensure that the need for such measures in the future is avoided if at all possible. With the foregoing in mind in particular I take the view that the implementation of the Government's voluntary redundancy early retirement package in local authorities must, as a priority, assist in bringing short time working to an end. In mid-October I authorised local authorities to offer the terms of the package to all grades of staff, including eligible staff now on short time working except key staff or those required to maintain essential services. The redundancy early retirement terms provide for a range of different benefits depending on the length of service, age and whether the staff concerned pay full or modified PRSI.
In addition to authorising local authorities to offer the terms to all grades of staff I have also sanctioned the immediate application of the terms to sufficient numbers of eligible staff across all grades to facilitate the termination of any exist-at ing or proposed short time working arrangements. In that connection I have also asked managers to co-operate with the implementation of the terms of a code of practice on security in employment for local authority non-officer grades first issued to local authorities in November 1985. As Senator Ferris rightly said it was introduced by Deputy Liam Kavanagh at the time. That code is voluntary and non-statutory.
Its initial aim was to regard 85 per cent of those in non-officer grades, generally those with more than two and a half years of service, as permanent, that is, that they should not be subject to measures such as short time working which any local authority found necessary to introduce. Such measures would first affect employees employed in a temporary capacity, that is, those with less than two and a half years of service before those regarded as permanent could be affected. The code also set out a procedure to be followed in all short time working situations which arose. All local authority managers are currently taking action to implement the voluntary redundancy early retirement package.
In the context of preparing the 1988 local authority estimates I asked each manager to submit a report to me on the measures he proposes to take to maximise savings on manpower costs together with the target number of voluntary redundancies envisaged in the local authorities under his control. I have received a number of these reports and I understand that the remainder will be submitted to me over the next few weeks. In the meantime I understand that the terms have now been offered to all staff. I must emphasise that the terms are applicable across all grades and will not be confined to any one category of staff to the exclusion of others.
After the target number of redundancies has been identified and the level of interest in the terms among the staff has been ascertained, managers must submit detailed proposals for implementing the package to my Department for sanction. I have asked them to do this as quickly as possible. In the meantime I have told them that, if there is any case where surplus staff have already been clearly identified and they are satisfied that other options such as redeployment are not available, proposals to apply the terms immediately in such cases in advance of their overall proposals for the local authority concerned should be submitted to my Department for urgent consideration. An immediate decision will issue on any proposals to implement the package in such cases. Proposals for a few local authorities to implement the package on the foregoing basis have already been sanctioned.
As far as any planned short time working in local authorities is concerned, I have made it clear to managers that I expect that, rather than going down that road, any local authority planning such an arrangement should instead ensure that their voluntary redundancy terms are implemented immediately to the extent necessary to avoid short time working. As far as short time working which is already taking place is concerned I have also emphasised to managers that I want the immediate implementation of the package to make an early impact on reducing and phasing out sooner rather than later such short time working. I am confident from discussions which I have had with managers in this regard that their full co-operation will be forthcoming. I have asked them to keep me informed especially of progress in implementing the package in the counties affected.
Detailed negotiations with staff interests on the implementation of the package will take place at local level. It is important that as much co-operation as possible from the staff should be encouraged in view of the voluntary nature of the scheme. At the suggestion of the Irish Congress of Trade Unions with whom I had discussions in this matter, I am also making arrangements for consultations centrally between the interests involved on any general problems that may arise. There are early indications of a considerable degree of interest from local authority staff in the voluntary redundancy early retirement measures. It will not, of course, be possible to determine whether the number willing to accept the terms is sufficient until all staff who have been offered the package have responded to it and have been given an indication that the manager concerned is willing to accept the particular application.
Staff will also be advised of the precise amounts payable to them under the scheme before being asked to make a final decision. I confidently expect that there will be a sufficient take-up of the scheme to ensure that local authorities can in a planned way match staffing levels with their requirements and available resources and, in particular, end arrangements such as short time working which are unsatisfactory from many points of view.
In so far as the superannuation aspects are concerned, the principles which govern the reckoning of service under the local government superannuation code do not differ between officer and non-officer grades. The principle involved in the motion before the Seanad is that a member of an officer or non-officer grade is not entitled to reckon as pensionable service any period in respect of which he is not paid. This is in line with the position in the public service generally and it would not be appropriate for me to seek to amend the existing provisions in this regard.
Many improvements have been made to the code over recent years. For example, major improvements were introduced in 1977 and 1984 as a result of the implementation of the recommendations of the Joint Working Party on Local Authority Superannuation. The reckonability of periods of absence due to short time working as pensionable service was one of the matters considered by the working party in 1982 but a change in the existing position in this regard was not recommended. Representations have also been received in my Department on a number of occasions in recent years on the same point and successive Ministers have, after full consideration, accepted that it would not be appropriate to change the present statutory position.
One of the results of the improvements introduced in 1977 is that an employee may now reckon all his service days, subject to a maximum of 250 in any year, where previous he could not reckon service days in any financial year in which he had less than 200 service days. By way of clarification I would like to say that, while unpaid absences due to short time working are not reckonable, an interruption of employment in such circumstances does not deprive a pensionable employee of this pensionable status or lessen his accrued superannuation entitlements.
It is important to understand that the whole concept of local authority superannuation is based on the fact that it is service-related and in the case of an employee a service day means a day on which he works in a whole time capacity for a local authority or is granted paid leave. His conditions of employment take account of this position. The various employment protection measures and the redundancy payments Acts apply to local authority non-officer grades on the same basis as employees generally and they are assured of full benefits, for example, unemployment and pay-related benefits under the Social Welfare Acts. While ideally employment should be without interruption, this is not always possible. The overall position regarding security of tenure of non-officer employees is that their employment and conditions of service are matters for each local authority.
I am very conscious of the difficulties which short term working creates for employees and their families and I am concerned to ensure that anything which can be done to reduce short term working to the minimum is done. For this reason I asked local authorities to make a special effort in this area and to avail of every opportunity presented to them through the implementation of the voluntary redundancy early retirement package to terminate existing or proposed short time working by local authorities employees. I am satisfied that this is the best approach to alleviating the problem, including its consequential effects on superannuation and I am confident that the efforts of local authorities in this regard will bring about a noticeable reduction in the amount of short time working over the coming months. Go raibh míle maith agat.
When I saw this motion I went to the Library to have a look at the legislation governing the superannuation of local authority employees and I discovered that, apart from a private Act of Dublin Corporation and Dublin, Limerick and Waterford City Management Acts, there was no specific statutory power to give non-officer employees — I dislike the word "servant"; I am glad the Minister did not use that word in his speech tonight; our legislation does unfortunately categorise officer and servant — a pension prior to the Act of 1948. Part III of that Act provided that legislation and that was superseded in total by the 1956 Act.
The 1948 Act attempted to provide a superannuation scheme not only for non-officers of urban bodies, the bulk of whom had permanent employment, but also for the non-officers of county councils, a high proportion of whom had no permanent status at that time and would not have full employment each year. The normal criterion for accruing pensionable service is that it be full time and permanent. If the superannuation scheme insisted that local authority employees and county council workers would be full time and permanent, very few of them would qualify under the legislation up to then. The Act of 1948, accordingly, provided that service of 200 days or more in a year would be regarded as pensionable service but it also laid down a number of conditions which were removed by the 1956 Act. These conditions were replaced in the 1956 Act by a single simple objective, namely, that non-officers would have to have 200 days service to qualify for pension rights. Indeed, it might interest Members to know that for a contribution of 4 per cent — that was a halfpenny in the shilling — the non-officers would then be entitled to a pension of one-sixth of the pensionable remuneration on that date of retirement multiplied by the number of years reckonable service, subject to a maximum 40 years.
There were two schemes introduced, as far as I can ascertain, one in 1977 and 1986. The pension and gratuity rights were changed under these schemes. Under the 1986 superannuation scheme the number of service days which constitutes a service year amounted to 150. We come to the kernel of the motion tonight when we look at the legislation regarding what is reckonable service. A service day is a day on which an employee is at work, or is paid, or is on sick leave subject to one year's sick leave absence in every four years. An employee could not be credited with a service day on a day on which he absented himself from work other than on sick leave, or on any days during a period of short term working.
The Minister has quite clearly indicated in his speech tonight that he is in touch with city and county managers. I was in touch with my own personnel department in Dublin Corporation and, even though we are suffering certain effects from cutbacks in local authority funding, I am glad to know there is no one in Dublin Corporation on short time working. This is a problem with other local authorities as Senator O'Shea has indicated here tonight. I have been aware of that for some time also. The Minister indicated that he is urging City and County managers to avail of the early retirement and redundancy package to cut out short time working and eliminate that problem. I hope the Minister is successful and that sufficient people will apply because the very important word is "voluntary".
There will be some people in the local authority service who might want to stay on, who might be on short term and might hope, in a better economic climate which the Minister's Government promises, that they would get back to full term employment and may not be anxious to take the early retirement or voluntary redundancy. If early retirement and voluntary redundancy is going to be as attractive as the Minister says, then many people will take it up; and that might leave only a minority of people who will want to stay on on short term with the hope of getting back.
Particular consideration of their situation would not be a great burden on the State. What the motion is asking — and I certainly support the principle — is that people on short term employment in that category, and who are not anxious to take up the redundancy package or early retirement, be given credit for the time they are on short term employment, so that even though the short term employment affects their weekly or monthly wage at present it will not affect their pension and gratuity rights when they reach retiring age. That is a reasonable request and I fully support the motion.
I have listened to the contributions of the Senators and the Minister with some interest. I learned with concern from Senator O'Shea that local authorities are being destroyed. That should not surprise us as much as we might immediately imagine, because I have read the Irish Constitution a number of times and I have had to talk on it a few times. One of the things that has amazed me in a remarkable document, which deals with individual rights in considerable depth, is that I cannot either find or interpret any clause which deals specifically with local government; but I am sure I stand to be corrected.
There are two extremely interesting clauses. Article 15.1.3 allows for the Oireachtas to sit outside of Dublin and Article 15.2 allows for the creation or recognition of subordinate legislatures. Although I have been critical of parts of this Constitution, as many Senators have been, the document as a whole is a remarkable document which has already got tailor-made for us the means of decentralising Ireland and also accommodating different aspects and different traditions of Irish life. What we have not got is the next stage. There is allusion to county councils. I do not see the words "urban council" in the document. There has not been sufficient attention paid to the need to develop power right down to where the people actually work. If one were to make a main criticism of the Constitution it is, in a sense that, if it has failed people it has failed them because of that omission, because after all in the last 50 years the Irish people are now — at least we hope — adequately educated. We should therefore be able to take on board responsibility for decision-making where we live and where we work and we should be trusted to do so. It is the liberation of the energy that is at present tied up inside the people that will be one of the answers to our problems as we move into the future.
As far as the particular problem of the moment is concerned, in the short term certainly we all recognise the dilemma of the State finances and we all have to acknowledge, whether we like it or not, whether we are critical of it or not, that the present Government are certainly taking the bull by the horns, so to speak, and are determined to take action.
I listened with interest to Senator Doyle. He quite rightly makes a plea for those who want to remain in local government service and who are remaining so, not with the idea of having a cushy part-time life but with perhaps the prospect that things will work out for the better and that they will eventually be able to anticipate a more full-time existence. May I suggest that the pension might be able to bridge the gap between the Minister and Senator Doyle if one considers what is done in the national health service? A pension is given on one-eightieth for every year served taking the average of the last three years of service. That would allow for the possibility of an upturn in the economics. It would allow for the possibility of the part-time work at present. A person would have to gamble, because in a sense he would be taking on trust that there was going to be an upturn; but it would allow him to anticipate the possibility of having a reasonable pension at the end of the day.
As far as the Minister's proposals are concerned, there is an attempt made to produce pleasantly structured unemployment. By that I mean the voluntary aspect has been emphasised. There are people who like to take up the opportunity to change their employment if that is feasible; there are people who like to retire early and make use of the time that is left to them and who feel that the pension they will receive will be adequate to meet their needs. But there remains those people to whom both Senator O'Shea and Senator Doyle have referred.
I was interested in the comment made about two-thirds of the farmers being in favour of land tax. It is appalling that £30 million goes to accountants — and I would have to question that because it seems such a huge figure — and that the average farmer pays £460 per annum to his accountant. If the farmers are prepared to pay land tax to the local community I will conclude by suggesting that one might look at the system of taxing in the country in conjunction with what I have said about the need to decentralise and push out quantums of power to where people actually work and live. Consider the following model; if 10 per cent of the total taxes of the people went to the capital, if 20 per cent of the taxes collected in the region went to the regional capital, if 40 per cent of the taxes collected from people there went to the local district or local community, you still have 30 per cent left for redistribution by the centre or region to be moved from the prosperous communities into the more deprived communities. It is in that type of rethink of the whole taxing structure, in conjunction with a look at the need for a new article in the Constitution in relation to the need to decentralise, that the long-term solution will come and which will give the people about whom Senator Doyle is concerned a more likely prospect of regaining full employment in the service that they wish. I do not want to go into the mathematics of it but I have just given that outline — have I any time left?
The Senator has one minute.
If that is the case the mathematics are too complicated for one minute because I have a very hard time getting to grips with them myself. It is a proposal which our group made to the New Ireland Forum. It has at least been recorded there officially in the files and I suppose if we worked at it we might be able to produce something worthwhile on paper.
There are ten minutes left and there are two Senators offering. If Senator O'Callaghan wants to share the time with his colleague, that is a matter for themselves.
I will be brief. I would like to second the amendment and to say at the outset that I welcome the Minister's comments here this evening. There is obviously merit in the motion. One imagines that the state of play as we currently know it is effectively the result of the deliberations of the joint working party on workers' superannuation. The joint working parties, who by their very nature are concerned for the wellbeing of workers in any aspect of industry, had an input and despite that fact the regulations has not been changed. The deliberations in 1982 by the same joint working party again decided it should not be changed. In the climate of the day to contemplate changing it now would be most unwise.
The Minister has, very definitely, adopted a much more pragmatic approach in making serious efforts effectively to eliminate the principle of part time working. I represent a local authority with 2,500 employees and I can say we do not have any employees on short time and never have had over the duration of my term as a member of the county council in Cork. Therefore I cannot comment on it with any degree of knowledge. The approach being adopted by the Minister is obviously the correct one, that is, to eliminate the concept altogether. While it might be Utopian to strive to have a situation in which every local authority had no workers on short time, it is one we should aspire to. The modus operandi being introduced by this Minister is the right one, that is to pursue voluntary redundancies which will in time produce a slimmed down and much fitter local authority than we currently have and this phenomenon of road workers being on short time with monotonous regularity in some counties will hopefully be eliminated. That, as I said at the outset, is the Minister's intention.
The Minister has made his position abundantly clear to county managers in relation to the even handed approach he will be insisting upon in relation to the appropriation of the various categories of persons who will be accepted for voluntary redundancy. They will not all be county council road workers. In many county councils, the planning staffs and sanitary services staffs and all the engineering staffs, architect staffs and so on, increase and increase while the number of workers doing the physical work of maintaining and servicing our road network decreases. That phenomenon is in evidence in every county council where gradually over the years the numbers of road workers has steadily decreased.
We are producing various pieces of legislation and it is very evident from the track record of this Minister in the short duration he has been in office that he intends to produce a lot of legislation. That is very welcome. I instance as a case in point his very welcome comments over the weekend in relation to the need for and his desire to control pollution. When I was a member of Cork County Council some years ago, we got new legislation in relation to litter control and, on the very same day, we got a letter from the then Department of the Public Service indicating that there was no change in the situation in relation to staff or employee recruitment. How in those circumstances do you pursue the implementation of a new piece of legislation like the Litter Bill?
Public authority members comment almost on a daily basis on the disarray in relation to litter, dumping and so on. Yet, in tandem with the arrival of a new piece of legislation in relation to control, we have advice that we may not employ any people. We would all laud the Minister's desire to be even handed in relation to the appropriation of the voluntary redundancy package but he should be mindful of the fact that, in our desire to implement other legislation, such as the Litter Bill, for example, implementation requires additional staff or a meaningful redeployment of staff.
Certainly amongst the unions in Cork County Council, there is willingness to enter into meaningful dialogue with regard to relocation of workers from one category to another. The unions appear to be quite happy. Management can resolve the problem if there is a reasonable approach across the board. There is this desire, I have no doubt, to approach the matter fairly and to ensure even-handedness in the voluntary redundancy packages.
The difficulty of funding is the ultimate problem. The way the Minister has approached the problem of the shortfall in funding generally is to be welcomed because all Departments have been expected to take their share of the chop. It is quite obvious that the Department of the Environment have taken almost more than their fair share. Some of the innovative moves the Minister has made in recent weeks are to be welcomed, certainly in the areas touched on by Senator O'Shea. I do not agree with the Senator's point. I had occasion to argue the toss with a member of his party yesterday at a council meeting.
The provisions in relation to the SDA loans are long overdue. It is all very well to talk about when loans get back to 15 per cent and 16 per cent, but the logical conclusion is that the effort to be cost effective is a superfluous exercise from day one. It should be pursued only on the basis that the spiral will continue to go down rather than up. At the moment it is quite permissible for people to negotiate loans from any of the normal building agencies on better terms than they would get from their local county council. Why should they not avail of them? That move by the Minister is to be welcomed. It should also be said that the concept of obtaining a loan to build a new home from a banking or house-building agency is not new. It is not a concept that the Minister dreamt up. That has always been in existence. I was quite surprised to hear members at a local authority meeting recently saying it was a new phenomenon. It certainly is not.
Let us approach the matter honestly. A person or a couple wishing to purchase or build a new home should be provided with every facility to avail of lower interest rates where possible. It will be incumbent upon the Government and the Minister to ensure that the rates stay down. We should not be negative in political debate. There were people at our meeting yesterday talking about 20 per cent——
It hardly arises on this motion.
I accept that. Senator O'Shea referred to some of the ramifications of some of the Minister's decisions. I just wanted to touch on that. The Minister would love to come in here this evening and say: "Yes, no problem. We will consider this for superannuation purposes." Of course, it is not easy. I am making the point that I welcome the Minister's approach this evening. He is endeavouring to be evenhanded and his ultimate desire, and I have no doubt the desire of every member of a local authority would be the total elimination of short term working.
Senator Kiely, you have two minutes.
Thank you. I welcome the two minutes I have to comment on this. Listening to Senator Ferris you would think this problem arose within the past six or seven months since the Fianna Fáil Government got into power. In the past number of years a directive was sent to all local authorities to ensure that for every three made redundant only one replacement could take place irrespective of sector. I am very glad the Minister has introduced voluntary redundancy. I am delighted with the working and hope the Opposition will not try to turn it into enforced redundancy. As a Senator mentioned this evening, it gives an ideal opportunity to a local authority worker to opt for the voluntary redundancy early retirement package and possibly use the money to go into business. I am delighted in particular that this voluntary redundancy scheme is not just for the man on the ground with the shovel or the pick, that it starts at the top. The last time we spoke about the reform of local government I said it might be no harm to look into some of the cupboards where the cobwebs have been for a number of years.
Your time has expired.
I support the amendment. I welcome the remarks made here this evening by the Minister.
I call on Senator O'Shea to conclude the debate.
Go raibh maith agat. The Minister mentioned that we seemed to have strayed from the substance of the motion and I will try to be as relevant in summing up, in deference to the Minister who in certain ways could be accused of not remaining totally relevant himself in his reply. However, that is a small point. One point I would make to the Minister is that at present 250 service days are required for full pension and gratuity entitlements; that 260 days would be the norm; and there are ten days per year for which local authority workers would be paying a superannuation contribution. Those days are absolutely useless to them. I put it to the Minister that those days or the accumulation of those days could be used to make good the years in which they had been short time working. In other words, if somebody missed, for instance, 50 days in a particular year, if he had five years of working ten days extra could the regulation be changed so that those days could be used to make good the 50 days in the year in which he was short? Just a small point which I would ask the Minister to clarify. I understand from senior trade union people that a commitment has been given in talks with the Minister and senior trade union officials that there will not be compulsory lay-offs in local authorities; in other words, there will not be compulsory short time working. There is no question of an undertaking being given to unions that there will be no compulsory short time working in 1988?
It would be just as well, a Leas Chathaoirligh, if I refer the Senator to the earlier part of my contribution. It sets out pretty clearly the arrangements I had with the unions in so far as short time working is concerned. With the idea of reducing that and clearing it up and bringing back those who have already been let off, I agreed to apply the package to all grades in all local authorities, not just the ones named by the county managers, so that those who would take up the package could be replaced by those on short time and brought back. That is the essence of what I was saying this evening. It is very important and I hope the Senator understands it because it means that those who are on short time and who do not wish to take redundancy will be brought back into the service.
Full time?
That is right.
The word Utopian was used by somebody on the other side. There is no way in my view that local authorities will get sufficient redundancies or sufficient early retirements to obviate the necessity to revert to short time working. The Minister has not yet stated whether or not any undertaking was given to the unions. I would like to go on to another point.
I would hardly think that Utopian is the right terminology to apply to what will happen in local authorities in 1988.
Senator O'Shea to continue.
I was saying that it was a Utopian aspiration. In regard to social welfare paid while persons are on short time working, someone who has two children is about £4 less well off per week when he is in receipt of social welfare and on short time working. That is a more general point. It seems crazy where somebody who has been a net contributor under this scheme to the Exchequer is on short time working, he is only £4 worse off. One of the comments made by Senator Robb, although not relevant to the motion, about the distribution of taxation away from the centre — something in which I would have a lot of interest — deserves comment.
The pundits are telling us that by the year 2000, 50 per cent of jobs will be in the tourism, leisure related area. If we are running down local authorities, if roads tend to get into a much worse state — and no one can deny that is happening and will continue to happen in a big way — this certainly makes our country less attractive for tourists. In a way we are probably eating the seed potatoes in the sense that we are neglecting our base and a very important part of our infrastructure. A question which the Minister did not refer to is the discretion he has under the Bill to allow pension entitlement for periods of short time working. We know, for instance, that when a strike happens and service days are lost, the Minister has discretion to grant those days as service days. If his aspiration is reached and there is no short time working in 1988, could the Minister in that context consider regularising the situation for people who have suffered reduction of pension and gratuity rights heretofore?
There is no precedent to accommodate that.
Senator O'Shea to continue.
If I can refer to what Senator O'Callaghan said regarding local authority loans, I have never seen myself as being a knocker but that is up to other people to judge. The point I want to make is that local authority loans are available to persons with an income under £10,000, persons who are just out of the reach of local authority housing and a subsidy situation had existed, with these loans, certainly with the SDA loan. With the maximum ordinary loan being at £21,000, if we take the lowest interest rates we have had in the eighties and the highest interest rates, there could be a swing of £90.00 per month on interest repayments on those loans. This is absolutely horrendous and absolutely at variance with the whole spirit of SDA loans, with the whole spirit of loans for local authorities.
There is no denying that the type of client who will be going to local authorities for loans from here on will be those who have not succeeded in getting loans from banks or building societies. They are persons who have a lot more difficulty in repaying. The income limit of £10,000 is too low, but that is another point. Many persons for instance were housed under the £5,000 surrender grant introduced by the last Government and there are persons who up to now could have availed of the existing loans. We are removing from such persons the opportunity to provide their own houses. That cannot be good and it is something that I cannot support. I feel I am not being destructive in making that comment. That is an absolutely constructive comment and an honest and realistic comment on what is happening.
I understand that the Fianna Fáil amendment is a noting amendment, and I have no doubt but that when we come to vote on it tonight that Fianna Fáil Members will support it. However, I would ask the Minister, if he achieves his objective of there being no compulsory lay-offs in local authorities to review sympathetically the situation of the people referred to in the motion who have already lost entitlement.
I am now putting the question: "That the motion, as amended, be agreed to."
Before the item on the Adjournment, may I ask the Leader of the House when it is proposed we meet again?
At 10.30 a.m. tomorrow.
