Seanad Éireann díospóireacht -
Friday, 30 Jun 2000

Vol. 163 No. 26

Hospitals' Trust (1940) Limited (Payments to Former Employees) Bill, 2000: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

This Bill provides for the making of ex gratia payments of £20,000 to the former employees of the Hospitals' Trust (1940) Limited or their personal representatives. Former employees or their representatives will apply for the ex gratia payment. Applications will be reviewed by an interdepartmental committee and each eligible applicant will be paid £20,000.

The Irish Hospital Sweepstakes was established in 1930 and was promoted by a private company, Hospitals' Trust (1940) Limited, in pursuance of a standing agreement with a sweepstakes committee appointed by the governing bodies of various hospitals. The Hospitals' Trust Fund was used to channel the net proceeds of the sweepstakes to hospitals for capital purposes. Statutory responsibility for the Hospitals' Trust Fund was with the Minister for Health and that for the running of the sweepstakes by Hospitals' Trust (1940) Limited with the Minister for Justice. Overall responsibility for pensions in the private sector, however, rests with the Minister for Social, Community and Family Affairs.

Sales of sweepstakes reached a peak of £18 million in 1961 but then declined until for the three years 1980-82 total sales were only £23.1 million. The expenses as a percentage of the proceeds came to exceed the statutory maximum of 40%. The bulk of the income had come from outside the State, and this had declined severely as legal gambling opportunities arose elsewhere. The hospital sweepstakes made various proposals for new weekly draws but the approval of successive Ministers for Justice was not forthcoming, mainly because it was considered the draws would interfere with and cause unfair compe tition with existing lotteries supporting worthy causes.

The entire workforce, then some 150 persons, were given notice of redundancy in January 1987 and received statutory redundancy payments. The Labour Court in 1987 recommended payment of redundancy of two weeks' pay per year of service in addition to the statutory payments already made. This was rejected by the company on the grounds of inability to pay. Although there was a company pension scheme, most of the persons concerned accepted a once-off lump sum of a few thousand pounds in lieu of the small pensions that were available. They are now dependent on the State old age pension.

In December 1990 the Public Hospitals (Amendment) Act enabled the Minister for Health to take over approximately £481,000 in unclaimed sweepstakes prize money, together with accrued interest, for distribution to former employees of the company. The money was distributed in 1990 and 1991 to the former employees generally regarded as the most seriously disadvantaged when the company ceased operating.

The staff made redundant in 1987 were the only employees of the company who did not receive any compensation over and above statutory redundancy entitlements, apart from a tiny pension or a small lump sum. All other groups of employees of the company who were made redundant prior to 1987 received compensation in the form of enhanced redundancy lump sums and enhanced pensions. Accordingly, this Bill is directed towards the staff who were made redundant in 1987. It provides that they receive a once-off and final payment from the Exchequer of £20,000 each. Some 147 former employees who were made redundant benefited from the Department of Health scheme in 1990-1. It is expected that the number of beneficiaries of this scheme will be similar and the cost to the Exchequer will be somewhat less than £3 million.

It is important to point out that these ex gratia payments do not involve setting a precedent for former employees in other organisations, either public or private. There are several unique features which distinguish the former employees from others. While the employees were employed by a private company, statutory responsibility for running the sweepstakes by Hospitals' Trust (1940) Limited rested with the Minister for Justice. The existence of this company was dependent on the Hospitals' Trust Fund, which was used to disburse the net proceeds of the sweepstakes to hospitals. Statutory responsibility for this fund rested with the Minister for Health.

Those employees who remained with the company until it closed received only their statutory redundancy entitlements, supplemented by a tiny occupational pension or the alternative of a small lump sum. Most of them opted to accept the lump sum which means they are dependent on their old age pension. While more than 30 of these former employees have since died, the majority are single women living in very poor circumstances. I am confident that no other group of former employees of other organisations could claim that their circumstances are similar to those of the sweepstakes employees who were made redundant in 1987.

The purpose of the Bill is to establish a mechanism which will enable ex gratia payments to be made to former employees of Hospitals' Trust (1940) Limited. Section 1 is an interpretation section and defines the terms in the Bill. The term “former employee” is defined as a person who was employed by the company for a period of which not less than 104 weeks was a period of continuous employment within the meaning of Schedule III of the Redundancy Payments Act, 1967, and continued to be employed until 1987. The term “personal representative” has the same meaning as in the Succession Act, 1965.

Section 2 provides that payment may be made to the former employee or, in the case of a deceased employee, to a personal representative. This section also identifies the level of payment at £20,000. Section 3 provides for the appointment of a committee to advise and assist the Minister in implementing the provisions of the Act. The membership of the committee will comprise two officers from the Department of Enterprise, Trade and Employment and one officer each from the Department of Finance and the Department of Health and Children. The remainder of the section deals with the position of chairman of the committee, the quorum for meetings, filling of vacancies, regulation of business and the dissolution of the committee.

Section 4 provides that applications must be made within two months of the passing of the Act, although this may be extended by the Minister. Such information as the Minister may require to process the application must be provided. Where applications are refused the applicant must be so notified in writing and the reasons for the refusal must be given. Applicants must be informed that they can appeal the decision within 21 days. Appeals against such refusals may be made within 21 days. The Minister must consider such appeals and notify the applicant of the final decision and the reasons for this decision.

Section 5 prohibits the giving of false information in relation to an application for payment. It provides for a maximum fine of £1,000, but recognises that certain defences are available. Section 6 provides that applications for payment must be referred to the committee. The committee will ascertain whether the applicant is a former employee. If the former employee is not the applicant, the committee must verify the status of the applicant in relation to the former employee. This section provides that the committee report to the Minister on its investigations and activities. The section also provides that the committee can require applicants to answer questions and provide information and documents relevant to the application. Section 7 provides that, in the case of a deceased former employee, payment will be made to the personal representative.

Section 8 provides that administrative expenses incurred by the Minister will be paid from moneys provided by the Oireachtas. Section 9 is a formal section which provides the Short Title.

This Bill represents the final chapter in the ongoing saga concerning the treatment of a small group of Sweepstakes workers who were made redundant in 1987. The perception is widespread that these workers were badly dealt with both by their former employer and the State. The Bill vindicates the campaign of these former employees for a generous gesture by Government. It is hoped that these former employees will take some satisfaction from this ex gratia payment. I commend the Bill to the House.

Mr. J. Doyle

I welcome the Minister of State to the House and wish to expedite the passage of the Bill.

This is welcome legislation. It is a pity it did not come at Christmas because it is a real bonus for the people who so richly deserve it. I lived less than half a mile from the headquarters of the Hospital Sweepstakes. It was founded in 1930 and did wonderful work throughout the 1930s, 1940s and 1950s, when it financed the capital programme for many of our hospitals. In 1948 Dr. Noel Browne made good use of the money it raised to build a number of hospitals.

Most of the workforce were women. The management was very sympathetic in its employment of widows, especially those with large families. It was before its time in that it employed people with physical disabilities. It offered good employment to people no one else would employ at the time.

The trust was very profitable between the 1940s and 1960s. It reached its peak in 1961 when tickets were in great demand. The sweepstakes were run on the results of three races – the Grand National, the Derby and the Cambridgeshire. The trust would increase its staff on a temporary basis 13 weeks prior to the races.

In the late 1970s the Hospital Sweepstakes came into competition with other fund raising activities and the prizes were no longer as attractive. The national lottery was established in the late 1980s and although the Hospital Sweepstakes applied to manage the lottery, it failed and that was the death knell for the sweepstakes.

In 1987 the 150 remaining workers received redundancy notices and were only offered £2 a week pension or a lump sum of £4,000. Most of them understandably took the lump sum. The pension fund established by the management of the Sweepstakes was totally inadequate. Subsequently, the Labour Court made the decision that the employees should get two weeks pay for each year of service. As the State was a beneficiary from the Hospital Sweepstakes, many people felt there was an obligation on the Exchequer to pay the figure decided on by the Labour Court. Unfortunately the Government of the time did not feel able to do that.

Some the employees had given over 40 years' service and they felt hard done by. This legislation is welcome because it will give assistance to the last employees of the Hospital Sweepstakes. I pay tribute to the dignified way in which they approached this matter. They appealed to us in an appropriate manner and there was no lobbying outside the gates of Leinster House with banners. I am delighted that in the last budget the Government made provision for £20,000 for each of the employees of the Irish Hospitals' Sweepstakes. The legislation is most welcome and I commend it to the House.

Mr. Costello

I welcome the Bill which is overdue. Successive Governments have been remiss in not ensuring that the absence of such legislation was not resolved before now. It is particularly unfortunate considering that most of the former employees were women who worked there for a number of years and are now elderly. Most of them have been in difficult circumstances in the intervening 12 or 13 years. The responsibility in this case rested with the employer and the State, both of whom have been remiss.

The employer was remiss because the Hospitals' Trust sweepstakes garnered huge revenues in earlier years. The provision of two weeks' pay per annum served, plus the statutory redundancy, as was proposed by the Labour Court, did not impose an enormous burden on the employer, considering the extent of profits that were made over the years. I do not believe for a moment that all those profits have been frittered away or that the employers went bankrupt. We all know who the employers were. They certainly did very well out of the hospital sweepstakes and became wealthy.

The State also did well out of the sweepstakes. The Departments of Justice and Health would have had a particular responsibility in this matter as the State relied largely on the sweepstakes to fund hospitals.

It is a shame that the Government and Opposition could not have joined forces before now to ensure that a reasonable amount of compensation was paid to make up for the negligence of these employers. As Senator Joe Doyle said, the Hospitals' Trust employees always acted in a dignified fashion. They were courteous people who worked loyally for what they saw as a good cause, in the interests of the State. They made possible a level of service that could not otherwise have been provided in the medical sector. Since the employees played a significant role and made a significant contribution to the welfare of the State, it now behoves us to commend their efforts by making this ex gratia payment. It would be nice if this payment could be made in the run up to Christmas, as it would be an appropriate Christmas present.

Mr. Cassidy

We want to pay them before Christmas.

Mr. Costello

Pardon?

Mr. Cassidy

Does the Senator not want them to be paid until Christmas?

Mr. Costello

It could have been paid last Christmas or, indeed, the Christmas before that. The payment is overdue and it does not place an enormous burden on the State. I commend the Bill to the House.

Mr. Cassidy

I congratulate the Minister and the Government on introducing this legislation which is long overdue. I cannot understand why previous Governments, whatever their political persuasions, did not do it. In its time, the Irish Hospital Sweepstakes was a marvellous institution. The funding was used for hospitals and the sweepstakes kept national morale high in difficult times from the 1930s to the 1960s.

We know about the success of sponsored programmes on RTÉ, but the biggest and best of these was the Irish Hospital Sweepstakes programme, presented by the great Bart Bastable. He used to conclude the show every night with a one-liner that went, "Makes no difference where you are, you can wish upon a star". At a time when money was scarce, housing deplorable, employment non-existent and emigration rampant, the Hospital Sweepstakes draw, which took place three times a year, gave people a little hope. In those days the sweepstakes jackpot was £50,000, which today would not pay half the cost of a bungalow in rural Ireland, or put a deposit on a house in Dublin.

Mr. J. Doyle

It would not be a deposit on a house.

Mr. Norris

You would get a good price for it, though.

Mr. Cassidy

It would not even buy a site in Dublin.

Mr. Costello

It might buy a tractor in rural Ireland.

Mr. Cassidy

We have come such a long way from when such a sum was the biggest prize money of its time. We are very pleased for the people who are entitled to this payment and I hope the Government will pay the money as soon as possible. No one should have to wait until Christmas for it.

I would like to ask a few questions about the provisions of the Bill, however. Does the legislation only concern former employees who retired after 1987? I understand that 30 former employees have passed on to their eternal reward. Does that mean that their next of kin can claim the £20,000? If that is the case, what is the position for those who retired and received very little before 1987? One dear friend of my family received very little in 1985 and retired in poor circumstances, despite the fact that she was an eminent person in the Hospital Sweepstakes company. She was one of the leading people who met with dignitaries on special occasions. I would like to think that, while she has passed on to her eternal reward, her next of kin might be eligible for the payment.

I understand that not everyone can be facilitated, but a reasonable sum of £3 million has been made available by the Government to address this problem. Previous speakers referred to the dignified way in which former Hospitals' Trust employees had sought action by the Government. I also want to congratulate them. One does not have to demonstrate at the gates of Leinster House in order to obtain one's goals. The Bill shows that nowadays Governments do listen.

Mr. Norris

I would like to go through the ritual of welcoming the Minister of State to the House. As he knows, I take particular pleasure in welcoming him.

Mr. Treacy

I thank the Senator.

Mr. Norris

We have always had a good positive relationship politically. I am not at all surprised that this legislation has been brought to the House by him. While I am sure he is fed up with me rehearsing it, I remember that he took some quite difficult decisions on the Child Care Act in order to include an important section which has already benefited children. I am not surprised that this humane measure has come before the House under the aegis of the Minister of State.

I have a sentimental attachment to the sweepstakes because I was brought up in Dublin 4, that place so hated by the media conspiracy. I was born, however, in central Africa. My mother used to describe the place where I was born as a long, low, white building – the Clinique Reine Elisabeth, in what was then Leopoldville – with nurses in starched uniforms. For a time, I thought I had an extraordinary memory and that I could remember the few weeks after I was born because I had a very clear picture in my mind of this place which I thought was the Clinique Reine Elisabeth. Then one day, while sitting on the number 18 bus which had stopped outside the sweepstakes' office, I happened to look over and there was the long building of my memories, with a nurse but she was cardboard cut-out, pulling a ticket from a drum.

I remember the ladies from the Sweepstakes very well. They were respectable women and many of them had financial difficulties or strain. Many of them were widows, but they had considerable respectability and decency. They had the opportunity to make a few bob but it was hard work for other people in the Sweep. However, in the period after the war, everybody was glad to get into it. One sister of James Joyce, and possibly two of his sisters, were employed there.

What puzzles me is how it operated because it was a curious public-private partnership in advance of the notion of such partnerships. The McGrath family appeared to do extremely well out of it but, in that period, there were several other unexplained aspects, the most notorious of which was The Irish Press. All the money contributed by people in America, who did not have many resources, for the creation of a national newspaper, principally for the Fianna Fáil Party, wound up under the personal control of the de Valera family, the current generation of which has not shown any great managerial capacity.

Mr. Cassidy

Another one should be established to tell the truth in the news.

Mr. Norris

I agree with the Leader that it would be good to have an alternative source. It is a pity and the Irish Press is greatly missed in terms of balance. I would be happy to see it again but I think that is a vain hope.

Such problems have arisen before and I remember the terrible situation in which former employees of Irish Shipping were placed as a result of bad management policies. I remember them protesting outside the gates of Leinster House. I would not like it construed from the Leader's comments that people who protested outside the gates were lacking in dignity. I am sure that is not what he meant. On occasions those people were outside the gates and marched around with placards, but they maintained their dignity. They did the State great service but they received very little reward for it.

Everybody enjoyed the Sweepstakes. There was almost a sense of guilt about it because it was a grey area. Gambling in the 1940s, 1950s and 1960s was looked on as slightly risqué. Ireland was unusual in having this type of lottery. Tickets were got to America and England almost through subterfuge because lotteries and gaming were illegal in those two jurisdictions. However, a series of thrills were involved. If one's ticket was pulled and one got a horse – I am not sure how the £50,000 came into it – one could sell it to people like Terry Rogers. They would take a part interest in the horse so one was guaranteed something.

Mr. J. Doyle

Provided one's horse won.

Mr. Norris

One got it anyway if Terry Rogers bought half the ticket. One got what he paid. One got this money regardless of whether the horse won. It was a type of insurance policy.

Mr. J. Doyle

One got it from Terry Rogers.

Mr. Norris

One could have one's cake and eat a certain small portion of it. I am glad that these people are being looked after. It is a generous and imaginative measure. I take on board the points made by the Leader about people prior to 1985. There always tends to be a cut off point but it would be wonderful if everybody who was employed by the Sweepstakes could be looked after.

There may have to be a cut off point if the person concerned is dead. One cannot have seventeenth cousins materialising from Australia, claiming £20,000 on behalf of a person whom they never saw in their lives. However, cases such as that mentioned by the Leader should be considered. If somebody was prominent in the organisation, did good work for it and was excluded simply by an accident of time, their case should be considered. This is a good day for the Seanad because the Bill is decent and generous. It is no less than the people involved deserve. However, as was the case with regard to Irish Shipping, people do not always get what they deserve.

Acting Chairman (Dr. Henry)

A relative of mine used to send her nieces and nephews birthday presents of sweepstakes tickets in a mass card. This shows that she cared for them spiritually and temporally.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

Indeed, spiritually and temporally. I thank all the Senators for their positive and supportive comments. We all want to achieve a quick mechanism to address the shabby treatment of the former employees who, unfortunately, were made redundant when the Sweepstakes closed down in 1987. The Bill provides such a mechanism. Senators have fine memories of the Sweepstakes. We remember the great sensations, opportunities and wonder it provided. As the Leader said, £50,000 was a huge amount of money at that time.

People who left before the Sweepstakes closed got a better deal than those who stayed until the end and this is the reason for the Bill. The people who left early got additional redundancy sums and better pensions. Those who were loyal to the end and who, on age grounds, were entitled to stay on found, when the company ultimately went into liquidation, that they were faced with the stark reality that they no longer had employment or pensions; or, if they had a pension, it was very small. They received very little money at the time and it had to keep them going until they qualified for the old age pension. Hence, we have a moral and legal responsibility to ensure that they are looked after and politically this is being done.

When the Bill is enacted, we will ensure that all eligible former employees are encouraged to apply for the ex gratia payments. The committee will be established quickly to review the applications and we intend that there will be no delay in making the payments. My Department, which has responsibility for redundancy payments, has a list of the people who qualified for redundancy payments in the past. The Department of Health and Children has a list of the people to whom it paid special contributions in 1991. The lists have been checked already and they are accurate apart from five or six names. There will be no problem communicating with the people concerned and it is our intention to distribute the money as rapidly as possible after the Bill is signed by the President. I thank the House for its co-operation.

Question put and agreed to.

Acting Chairman

When is it proposed to take Committee Stage?

Mr. Cassidy

Now.

Agreed to take remaining Stages today.