Company Closures: Motion

Senator Denis Landy

I move:

That Seanad Éireann:

notes with grave concern the recent closure of the TalkTalk call centre in Waterford, with the consequent devastating loss of 575 jobs;

notes with concern the reports that further collective job losses at other companies may be likely;

deplores the fact that the employees of TalkTalk were given only 30 days' notice of the closure of the call centre;

notes that the State has provided significant financial incentives to companies like TalkTalk which establish in the State;

commends the Government for the introduction of job creation initiatives like JobBridge, and commends further the work being done by Ministers, Government agencies and others to stimulate job creation and to protect existing jobs in Ireland;

notes the different protections which exist for employees in collective redundancy situations under both national and EU law;

proposes that greater protections be put in place for employees facing collective redundancy situations; and

proposes the Government review existing legislation to consider that a longer notice period than 30 days should be provided by a company, particularly where a company employing significant numbers of people is proposing to make redundancies on a collective scale.

I welcome the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and thank him for taking time to come to the House to discuss this important motion. The closure of the TalkTalk company came as a massive blow to everyone, especially those living in the south east. The suddenness of the announcement took us by surprise and it was clear from the Minister's statements on the issue that neither he, his Department, IDA Ireland nor any of the local agencies had any inkling that the closure of the company was imminent. In addition to the loss of 575 jobs, a large number of jobs have been lost across the south east, from counties Kilkenny and Wexford to south Tipperary. In my area of Carrick-on-Suir and Clonmel, 120 jobs have been lost.

The closure of TalkTalk was a shock to the system, particularly for the company's workers who were in gainful employment and working hard in extremely difficult conditions. Having accepted new productivity arrangements at least three times in recent years, it was ironic and sickening to note that while senior management prepared the announcement of the closure behind the scenes, arrangements were being made for 100 staff to attend a party in England to celebrate the company. The party was held the weekend after it was announced that the company's offices in Waterford would close.

A large number of jobs — probably close to the number lost in TalkTalk — will be lost in ancillary employment in the region as a result of the closure. I compliment the Government on its quick response to the announcement. The Tánaiste and Minister for Foreign Affairs and Trade and the Minister for Jobs, Enterprise and Innovation visited Waterford and met the workforce within days. The Minister also established a task force which will report to him by the end of September. I look forward to the task force report and will discuss the elements I believe it should include. The Minister for Social Protection, Deputy Joan Burton, put in place all the services required by staff, including access to the money advice and budgeting service, FÁS and social welfare payments. Former TalkTalk staff will be advised of their social welfare entitlements in the medium term and retrained and upskilled. We need a more comprehensive response, however, one which will pave the way for the future of Waterford and the south east.

As the Minister will be aware, the upgrading to university status of Waterford Institute of Technology is a major issue in the region. I am pleased to note the Higher Education Authority hopes to sign off on formal advice to the Minister on this issue and that he hopes to publish the relevant criteria before the end of December. One positive development arising from the closure of TalkTalk is that it has placed centre stage the possibility of having a technological university for the south east.

An in-depth analysis is required for the entire south-east region which lags behind the rest of the country in terms of inward investment and IDA Ireland promoted jobs. The unemployment rate, at 20%, is the highest of any region. IDA Ireland supported jobs need to be dispersed around the south east. Ten years ago IDA Ireland closed its Waterford office, which was its headquarters for the south east, and transferred it to Cork. While some IDA Ireland staff remain in Waterford, the city is no longer a headquarters for the agency. Until ten years ago, the south east was treated on a par with the rest of the country but appears to have been on a downward spiral since then. I ask the Minister to comment.

We must develop indigenous industries in the south east. The region has a fantastic opportunity to develop its agriculture sector as it has the best beef and dairy land in the country. We are not making enough of this opportunity, as demonstrated by the closure of Waterford Creamery in Dungarvan. We need to refocus on the agriculture sector.

The Minister, in his efforts to improve employment in the south east, should also focus on education. We in south Tipperary had the pleasure of hosting the Taoiseach last Thursday when he opened an extension of the Merck Sharp & Dohme facility resulting in the creation of 70 new jobs in research and development. If one was to scope the number of local people employed in the new facility, one would find it is very low. We must ensure second level education gears people to take up jobs in their own areas by pushing the subjects in which they require competence and ensuring students attend university and acquire qualifications with a view to gaining employment in their local areas. The brain drain from the south east is noticeable. In the case of Merck Sharp & Dohme, for instance, only a small number of local people are employed in the new facility.

Call centre businesses are moving out of Ireland, which is a cause of major concern. Clonmel has an indigenous call centre company, Intellicom, which employs approximately 125 people. Providing support to these types of businesses is arguably more worthwhile than supporting outside businesses locating here because the former are unlikely to leave the country when grant supports are no longer available. External companies may also leave to employ workers at lower wage levels elsewhere in the world. We should encourage indigenous companies more.

The motion refers to increasing the redundancy notice period to workers from the current 30 days as provided for under the Protection of Employment Act 1977. The notice period should be increased to 60 days, as provided for under a 1998 EU directive. Across the water, the notice period for staff is 90 days. I have heard the argument, attributed in part to the Minister although I have not seen as much in writing, that IDA Ireland has expressed concern that increasing the term of redundancy notice time to staff would be a deterrent for new industry to come to the country. I compliment the IDA on its work. We had a report on the amount of business that has come to the country in recent months, which is very encouraging. However, I cannot and do not accept the argument that if a new company is being brought in and faces a requirement to give 60 days' notice then, even if everything else fits into place, the company will choose not to come here as a result of that provision. That does not stand up. I would like to hear the Minister's comments on that issue.

Another matter we must address in regard to these workers is the utilisation of the European Globalisation Adjustment Fund. We need to maximise the opportunities afforded by it. There have already been some experiences with the fund in the cases of Dell, Waterford Crystal and SR Technics that we did not handle very well. We left money behind because the criteria for drawing it down were too tight and staff could not avail of it. We did not interpret those criteria as broadly as did countries such as Spain and Germany which have been more successful in using this fund. I understand it must be applied to within one month of a company closure. Best practice across Europe in this regard should be examined. We have the goodwill of the EU Commissioner with responsibility for employment, social affairs and inclusion, László Andor, who was very supportive of an application on our part, and has stated so publicly. We should use the time available to put together a very broad application for this funding.

There is one further small matter which is a severe bugbear to the staff who work in TalkTalk. They were employed on both a basic wage and a commission basis. The commission in general was based at €30 per hour. In the redundancy package, however, the bonus commission is being calculated at €10 per hour. This is very mean-minded on the part of the company. The Minister might address this via his Department.

One might ask what good an extra 30 days would be for workers. First, it would give them an opportunity to accept the situation over a longer period and help them to put in place their financial arrangements, work with outsource services and allow them to get new job applications and CVs ready. It would also help them to digest their new situation as it relates to social welfare. It would give the business an opportunity to be sold as a going concern. I refer to an instance where all that I mention has actually happened. When Johnson & Johnson in Cashel announced its closure plans these were done on a staged basis. The minimum notice given was approximately two months to ten weeks. Some 50 of the staff have already secured employment in Abbott Vascular in Clonmel through work done by Johnson & Johnson with an outsource company. That is proof positive of the benefit of giving extra time to staff who are to be made redundant. I ask the Minister to consider this motion and respond positively to our request.

An Leas-Chathaoirleach

Senator Bacik is seconding the motion.

Senator Ivana Bacik

I welcome the Minister, Deputy Bruton, to the House and thank him for attending personally to deal with this important motion on the part of the Labour Party Senators. I am grateful to my colleague, Senator Landy, for proposing the motion, particularly given the area from which he comes and his local knowledge. I also acknowledge the presence in the Visitors' Gallery of Deputy Ann Phelan, who with Deputy Ciara Conway, also of the Labour Party, has been very active on this issue.

In any discussion of a motion such as this, the first matter is to offer our sympathy to the workers at the TalkTalk call centre in Waterford. The devastating loss of 575 jobs was a tragedy for the south east and the Waterford area, in particular. I have a personal interest in jobs in the south east region. My grandfather, Charles Bacik, who came to Ireland from the Czech Republic in 1946, set up Waterford Glass after World War II. At one time that company was the biggest employer in the Waterford area and it was with great sadness we saw its closure. However, a positive story is emerging from Waterford Glass with the new Waterford Crystal showroom which is a great draw to the city. I visited it last year. It is a very impressive facility and there is much manufacturing taking place. I hope this will continue.

There has been very bad news on the jobs front in the south east. As the Minister will be aware, the unemployment rate in the region has consistently been above the national average, being at 18.2% currently, compared with 14.3% nationally. The closure of TalkTalk came in a context where there was already a serious issue in regard to job retention in the south east. As our motion notes, when the job losses were announced, only 30 days' notice of the closure of the call centre was given to the employees, with no extra notice given to the Government. That was in spite of the fact that the State had provided significant financial incentives to TalkTalk, as we do to multinational companies which establish in the State. When the closure was announced the response of the Government was commendable. As Senator Landy observed, the Minister and other senior members of the Government, including the Tánaiste, visited Waterford and met with the workers from TalkTalk, which was very welcome.

However, as our motion points out, there are reports suggesting that further collective job losses at other companies in the foreseeable future may be likely. What we are seeking, therefore, is twofold. First, we propose that greater protections be put in place by the Government to assist employees in any company, including TalkTalk, who face collective redundancy situations. In particular, as Senator Landy stated, we propose that existing legislation be reviewed in order to provide for a longer notice period than 30 days, especially in cases where a large company is proposing to make collective redundancies. We are conscious that an extension of the 30-day period could be made within the terms of the EU directive.

The motion also looks at the bigger picture and commends the Government for the introduction of job creation initiatives. It seeks to explore what else might be done for job creation. We all hope to hear constructive suggestions today in the Seanad as to how job creation strategies could be developed.

We acknowledge the work in job creation already done by the Government in the short time it has been in office. We have put jobs at the top of the agenda, as promised in the programme for Government. We have carried out a number of measures which are already having an impact on job creation and retention, such as the restoration of the national minimum wage, the cutting of PRSI and VAT rates and the introduction of the JobBridge, Springboard and other programmes for job creation and internship schemes, as are noted in the motion.

I turn to the issue of protection of workers in collective redundancy situations. The notice period is a key issue for my party. I emphasise a further issue that was noted by Senator Landy, namely, support from the European Globalisation Adjustment Fund and whether further funding can be sought for the TalkTalk workers from that fund. As we heard, funding has already been sought for other mass redundancy situations in companies such as Waterford Crystal, Dell and SR Technics.

There are other issues in regard to redundancy and job losses which are rather different. One point was raised with me on a number of occasions during the general election campaign and I have no doubt it was raised also on doorsteps with many other Members. It concerns self-employed people, entrepreneurs whose businesses collapsed, and who, in many cases, had employed several people. The persons involved have very little protection in this situation which does not fit the definition of redundancy under EU or national law. I raise that point with the Minister, as I have done with the Minister for Social Protection, Deputy Joan Burton, under whose remit it comes.

On job creation, the third anniversary of the bank guarantee falls this week, as Senator Barrett pointed out. It is a significant anniversary. It sticks in the throats of all of us to have to see a further recapitalisation of banks and additional billions of euro going to Anglo Irish Bank, which is the subject of the related amendment. However, as the Government has consistently maintained, the restructuring and recapitalisation of banks is necessary in order to ensure that we have economic growth and to get us out of the economic crisis created by the failed policies of the previous Fianna Fáil-led Government. It is not appropriate that we, as proposers of the motion, would accept the amendment, which misses the point of our argument. It is two-fold point which we hope the Minister will address. First, there should be greater protection in collective redundancy cases, particularly with regard to lengthening of the notice period and, second, we should consider how best to ensure job creation and retention policies that work. There were some very positive announcements in the recent past and Senator Landy referred to some in his area. There are also plenty in Dublin taking in development of jobs and creation of further employment backed by the IDA. We hope to see more of it in future.

Senator David Cullinane

I move amendment No. 1:

To delete all words after "State;" and substitute the following:—

"—notes that the programme for government commits the Government to; ‘reform the current law on employees' rights to engage in collective bargaining, (Industrial Relations (Amendment) Act 2001), so as to ensure compliance by the State with recent judgements of the European Court of Human Rights;

notes that a single unsecured and unguaranteed bond in Anglo Irish Bank to the value of €700 million is due to mature in the next five weeks;

proposes greater protections be put in place for employees facing collective redundancy situations;

proposes that where a company is making redundancies that a notice period of 90 days shall be provided by that company;

and

calls on the Government to:

(i) enact the promised legislation on the right to collective bargaining as a priority in the legislative programme, and

(ii) cease payment to all senior bond holders payment in Anglo Irish Bank including the €700 million due to mature shortly and divert a significant portion of the savings to job creation and tackling unemployment.".

I welcome the motion tabled by the Labour Party. Senator Daly mentioned this morning that the motion would come to zero and this is a view I do not share. There is a good intention behind the motion and I support much of what is in it. It deals in a very real way with the shabby way in which the workers at TalkTalk were treated in Waterford city. Like the Leader of the House, Senator Cummins, I come from Waterford city and represent it and the county. Our city and county are hurt because of the job losses seen in the past decade, including those in Waterford Crystal, ABB Transformers, The Foundry, Teva Pharmaceuticals, GlaxoSmithKline and many other companies in the manufacturing, construction and service sectors. All of these have been devastating blows to Waterford, both in the city and the county.

We are not alone as Waterford and the south east are under-performing. That area has 3% more people on the live register than is the case in other regions. There are nearly 500,000 people in the State out of work, which is an indication of the poor performance of the domestic economy and that we are still not getting the job recovery we need. It also shows the madness of how we are bankrupting ourselves as a country to repay speculators and bondholders at a time when so many people are out of work. That is the reason we included the portion of the amendment dealing with banks. The amendment mentions the €700 million that will be paid to Anglo Irish Bank to repay one bondholder. That is the kind of madness we are seeing in the country when people like the employees of TalkTalk are losing their jobs.

I welcome the motion as it highlights the real problems facing workers, although we have tabled an amendment because it falls short. Part of the amendment calls on the Government to deliver on the promised legislation to make good on workers' rights and vindicate the rights of all workers to collective bargaining. This was promised in the programme for Government and the parties now in power indicated that every worker would have the right to collective bargaining. That is one of the issues on which I hope the Minister will deliver.

Currently, the Minister is reviewing employment rights bodies and merging some of them. I do not have a difficulty in that regard but I ask the Minister to ensure we use the opportunity to protect and enhance the rights of workers. The Labour Party motion mentions 30 days' notice, which was given to TalkTalk employees, but putting our hand on heart we must admit that this is a minimum requirement which companies should give. That legislation is already in place. We should either amend the legislation to reflect a 60-day or 90-day notice or we simply cry crocodile tears for the workers. We will end up in a position, either in the south east or any other region in the State, where other workers will find themselves in the same predicament as the TalkTalk employees.

We have already had this discussion with the Minister and, interestingly, he has indicated that he is not supportive of changing that portion of employment rights legislation. That worries me because as with the reform of the joint labour committees and the merging of the employment rights bodies, there is an attempt by the Minister's party in particular to hollow out much of the current employment rights legislation that was fought hard for by workers. That should be protected and not in any way neutralised by the Leader's party. It would be fundamentally wrong.

There is something obscene about the money being allocated to the banks. A recent report indicated that over €65 billion will have gone into the banks over the course of the next number of years if we continue along the same path. It seems that there are tea and biscuits for the workers at TalkTalk while bankers and people who speculated and gambled are taking the money. Waterford workers and people up and the down the country who have been let down by the State are out of work. We had the discussion this morning about civil and human rights, with the president of the Irish Human Rights Commission before the House. I argued that one of the fundamental rights in any society must be the right to a job or employment, yet nearly 500,000 people are out of work in the country.

Many people in Waterford are prepared to give this Government and Minister fair wind. The Minister met with public representatives and committed to being part of developing a jobs plan for the south east and asking enterprise agencies to see what they could do. There will be opportunities for public representatives to feed into that, and I had a conversation with the Minister outside the Chamber about some proposals I made on what could be done to create employment in Waterford. The time for talking is over and we need action, not just in Waterford but across the country.

I support the Labour Party motion because it deals with the disgraceful way in which the workers at TalkTalk were treated. We must move beyond giving sympathy to the workers and simply tabling motions. We must get real on the issues affecting people in this country, including the working people being let down because legislation is not sufficiently robust. If we want to follow through on the courage of our convictions, I ask Senators to support the Sinn Féin amendment which at least proposes action in the form of a 90-day notice period.

Senator Bacik argued that our amendment missed the point but it goes right to the heart of the matter. We cannot continue with a position where the country is being broken economically and financially. We are borrowing significant amounts but almost all of that money is going into the banks. We speak about employment proposals and some of the ideas formulated by the Labour Party when in opposition, such as front-loading critical infrastructure and labour-intensive programmes, but we are cutting capital programmes up and down the country. We must face up to that reality and deliver at some point not just a jobs initiative that does nothing——

Senator Maurice Cummins

Rubbish. The banks have no money.

Senator David Cullinane

It does nothing. The jobs initiative should create jobs people want so we can get people back to work.

Senator Trevor Ó Clochartaigh

Ba mhaith liom cuidiú leis an leasú. Is mian liom aird a tharraingt sa Teach arís ar chás Meitheal Forbartha na Gaeltachta. Baineann sé go díreach le ceist iomarcaíochta.

I second the amendment and draw attention to the case of the workers in Meitheal Forbartha na Gaeltachta, MFG, which demonstrates an anomaly in the redundancy process. MFG was a company with primary funding from the State and the workers were told approximately three weeks ago that their jobs were gone. As of yet they have not been able to avail of any redundancy rights because they cannot get the required form signed by anybody in the company. The board, management and directors have just gone to ground. We must consider the anomaly and what can be done when workers are let go and they cannot contact anybody within a company to avail of their rights.

Currently, the workers are not being paid and some cheques have bounced. They cannot draw down mortgage protection plans or protections on cars, etc. They are in limbo and do not know where they stand. When the Minister considers the motion, the area should be examined. When the system works, the redundancy process is fine and dandy but if employers do not co-operate with employees, it should be examined again.

Debate adjourned.

Seanad Éireann díospóireacht - Wednesday, 28 Sep 2011