Seanad Éireann díospóireacht -
Wednesday, 6 Feb 2013

Vol. 220 No. 10

Irish Bank Resolution Corporation Bill 2013: Committee and Remaining Stages

Section 1 agreed to.

SECTION 2

Question proposed: "That section 2 stand part of the Bill."

Senator Trevor Ó Clochartaigh

Tá mé ag ceapadh go bhfuilimíd tagtha ag stáid stairiúil is stair na tíre agus go bhfuilimid ag feiceáil rud ag tarlú anocht atá thar a bheith náireach, ó thaobh iompar an Rialtais maidir leis an mBille atá sé ag brú tríd an Seanad agus leis na fiacha atá sé ag cur anuas ar chosmhuintir na tíre.

Ba chóir go mbeadh náire. go deimhin, ar na Seanadóirí atá tar éis vótáil ar son an ruda seo. Táimid ag breathnú ar na fiacha atá ag dul a bheith ann maidir leis an athrú seo ó NAMA go dtí an IBRC. Táimid ag cur ina choinne seo agus táimid ag iarraidh ceisteanna a árdú faoi cá dtiocfaidh na fiacha seo ag deireadh thiar thall. Ní ionann an scríobh síos seo agus na fiacha a aistriú. Níl aon díscríobh faighte ag an Rialtas. Ba mhaith linn míniú i bhfad níos fearr a fháil. Ní hionann morgáiste agus fiacha den chineál seo. Ní hionann an nóta gealltanais seo a athrú isteach i mbannaí na tíre.

Go bunúsach, táimid i gcoinne an chaoi a bhfuil an t-Aire ag tabhairt faoi seo.

Senator Paul Coghlan

That is not on the section.

An Cathaoirleach

I ask the Senator to speak to the section.

Senator Trevor Ó Clochartaigh

Tá mé. Tá mé ag caint faoi na costais ón Aire, mar atá luaite in alt 2. Níl míniú sách soiléir tugtha ag an Aire faoi na costais a bhaineann leis an díscríobh seo. Cén chostas a bheas ag baint leis an aistriú seo? Ba chóir go mbeadh muid in ann fáil amach ó thaobh leachtú IBRC céard atá seo ag dul a chosaint. Céard chosnóidh an t-airgead iomarcaíochta, agus mar sin de, ar an tír? Cé mhéad atá KPMG agus a chuid chairde ag fáil íochta ar an obair seo atá siad ag dul a dhéanamh agus cén chostas a bheas ar an Stát dá bharr seo? Tá an oiread dindiúrí faoin rud seo ar fad nach bhfuil soiléirithe a fhad agus atá an t-Aire ag rá linn muinín a chur ann. Tá sé deacair muinín a chur ins an Aire nuair nach bhfuil an deal atá ann ós ár gcomhair. Tá an Seanadóir Hayden, mar shampla, ag rá go bhfuil an deal soiléir agus go bhfuil a fhios aici siúd agus ag a cuid comhghleacaithe céard é féin go díreach ach níl an t-Aire féin ag insint dúinn céard é an socrú agus feictear dom nach bhfuil sé ceart nó cóir go mbeadh sé ag iarraidh orainn reachtaíocht den chinéal seo a aontú leis gan na dindiúirí seo a bheith pléite go mion.

Senator Martin Conway

I welcome the Minister and commend him on a considered night's work. The legislation and the sections that we are dealing with are essential and are in the national interest. While the Bill could be classified as emergency legislation certainly it is not a knee-jerk reaction. It is a calm and well thought out, well prepared and well considered piece of legislation which has become active due to circumstances. Obviously the Minister, in consultation with his officials, had properly prepared for the circumstances and had a contingency plan in place. To compare the legislation in any way to the 2008 bank guarantee late night decision is completely inappropriate.

Senators

Well planned.

Senator Martin Conway

Yes. In this case the legislation was well planned, well organised and properly and effectively thought out. I would like the Minister to comment on whether the Supreme Court case in the morning will have an effect on the negotiations.

An Cathaoirleach

That is not related to the section.

Senator Darragh O'Brien

The Minister may incur expenses listening to this debate.

Senator David Cullinane

As the Minister knows, 500 people may lose their jobs tomorrow and some of them may be taken on by NAMA.

Can the Minister confirm to this House that the people who will be taken on by NAMA, and I hope many of those workers will be taken on, will be covered by the transfer of undertakings and that their current wage levels will be protected? I am very concerned about the low paid workers-----

(Interruptions).

Senator David Cullinane

-----and middle income workers who will be very worried about their jobs. I want to ask the Minister a simple question about the transfer of undertakings. Will they be covered?

An Cathaoirleach

Senator, that is not relevant to this section.

Deputy Michael Noonan

Senator Ó Clochartaigh, ar an gcéad dul síos, ní raibh ísliú riamh san Eoraip ar na fiacha oifigiúla, fiú amháin sa Ghréig. Cé go raibh ísliú ar na fiacha príobháideacha sna bainc, ní raibh ísliú riamh, ná ní bheidh, ar na fiacha oifigiúla. Níl sé ar intinn ag an ECB ísliú mar sin a chur ar fáil do thír ar bith san Eoraip. Ní dhearnadar é sa Ghréig. Ba ísliú sna fiacha príobháideacha a bhí i gceist sa Ghréig.

On the section, it states: "The expenses incurred by the Minister in the administration of this Act shall be paid out of moneys provided by the Oireachtas." I do not believe anything could be more democratic as that is the way business is done. Moneys voted by the Oireachtas for the purpose will be used to pay any expenses incurred by the Minister.

If the employees are re-employed by the liquidator or by NAMA - there are two possibilities - they will be employed under contract on new negotiated rates. I have said that already, and I believe that answers the Deputy's question.

I thank Senator Conway. When the Bill was being drafted I had no awareness that the gentleman he referred to was engaged in any form of legislation. As I said to him, the drafting of this legislation was done months ago because we were preparing for this for quite some time. It is worth saying, and I am sure Senators are well aware of it, that the Government cannot introduce legislation until it receives a stamped copy from the Attorney General. The stamped copy is a stamp to say that it is constitutional. Saying that a Bill is unconstitutional is a challenge to the Attorney General's opinion. The Government is legally obliged to get a stamped copy, and not to proceed until it has a stamped copy, and I have a stamped copy in my possession for several months.

Question put and agreed to.

Sections 3 to 5, inclusive, agreed to.

SECTION 6.

Question proposed: "That section 6 stand part of the Bill."

Senator Kathryn Reilly

I raise a point in terms of section 6(2) on the separation of powers between the Executive and the Judiciary and whether it is possible for the Legislature to put a stay on pending cases. The Minister has just mentioned that the Attorney General has stamped a copy of the legislation but in terms of precedent, the 1947 case Buckley v. Attorney General related to a disputed set of funds from the early 1920s. I ask the Minister to give some clarity on that in terms of separation of powers and putting a stay on pending cases.

Deputy Michael Noonan

The best thing I can do is read the speaking note on the section. With effect from the making of the special liquidation order there shall, subject to some exceptions, be an immediate stay on all proceedings against IBRC. No further actions or proceedings can be issued against IBRC without the consent of the High Court and the Minister may discharge or remove any liquidator or examiner that has been appointed to IBRC prior to the date of the special liquidation order.

This section also provides that the special liquidation order shall constitute effective and proper notice to each employee of IBRC that his or her employment with IBRC is terminated with immediate effect. However, the special liquidator is not prevented from engaging or re-engaging any person as an employee if the special liquidator considers such employment to be necessary or beneficial for the purposes of winding up IBRC.

The effects of the special liquidation order set out in this section are consistent with the effect of an order to wind up a company in the ordinary way under the Companies Act. It should be noted that since the State is the owner of IBRC it will be open to the State to wind up IBRC without legislation. The legislation provides a framework to achieve this in a controlled manner in order to enhance financial stability.

On the separation of powers, the Senator will note from the first couple of sentences in the briefing note that proceedings can be issued by IBRC with the consent of the High Court and the Minister. The fact that the High Court is included in the section seems to me to preserve the separation of powers in that respect.

Senator Trevor Ó Clochartaigh

Chuir mé ceist i nGaeilge níos luaithe, ach b'fhéidir nár tháinig sé trasna. Baineann sé leis an leachtaitheoir. Could the Minister clarify for us the type of deal that has been done with KPMG? He indicated on Second Stage that negotiations have been ongoing with KPMG, that when he would have to instigate this Bill he had a deal done etc. but what will be the cost to the State? How much will KPMG get out of this deal? How much will it cost the State eventually to pay KPMG to put this liquidation in place? How much of the assets that are to be transferred will end up being paid off to KPMG in this scenario? Could the Minister indicate to us the kind of deal that has been done?

Senator Paschal Mooney

Regarding the 850 staff, as the Minister pointed out, when liquidations happen they happen with immediate effect and pay, salaries, all of the conditions and everything in the contract of employment terminates. The question does not appear to have been asked, or it may have been asked in a different context, but what happens the existing employees as of tomorrow in terms of any moneys they are owed by IBRC-----

Senator David Cullinane

Transfer of undertakings.

Senator Paschal Mooney

-----and whether that is gone? The Minister said there would be new contracts but there is no guarantee. Has he any indication, even at this stage, of how many of the 850 workers he believes will be re-employed?

Senator Marc MacSharry

On a similar issue, for the employees who will wake up later this morning to this bad news, as the Minister is no doubt aware there were voluntary schemes available recently within IBRC, particularly the Anglo Irish Bank part of IBRC, and packages offered. In the circumstance that, on the Minister's own admission, this was a prepared situation, albeit abruptly done this evening as a result of the leak, and it was known this was to be done, was provision made to adequately look after those people who would not be employed by NAMA or by the liquidator to carry out these functions under new conditions and contracts? Will there be some form of a scheme to look after those people who will not be re-employed along similar lines to those who have retired or opted for the schemes offered to former Anglo Irish Bank staff over the course of two rounds of redundancies in recent years?

Senator Martin Conway

I have two brief questions. First, was there much discussion with NAMA regarding this measure? Second, in terms of customers of Anglo or IBRC who may be in negotiations about distressed mortgages, I presume that process will continue as normal and that this legislation will not affect negotiations that clients who may be in financial difficulty will have with this new entity.

Senator David Cullinane

I must put to the Minister again the question of the 850 staff. I accept that when there is a transfer of assets to NAMA some staff may be re-employed by NAMA but in normal circumstances where a company takes over the workforce of an existing company, even in a liquidation situation, the transfer of undertakings applies for 12 months and their terms and conditions of employment are protected. The Minister appears to be saying that will not apply in this situation and that new contracts will be offered but how does that sit with this State's employment rights law where workers should be protected in terms of what they call the TUPE, the Transfer of Undertakings (Protection of Employment) Regulations? I am mystified as to the reason the Minister cannot clarify that for the House.

Senator Darragh O'Brien

In the Dáil earlier the Minister mentioned, specifically in regard to the liquidators, that he vested the powers of the board temporarily in an employee of KPMG and a KPMG team is now in control of the bank.

That is fine; I may be missing something. The Minister has mentioned that once the legislation is passed, joint special liquidators will be appointed. I am not being pedantic. However, in his contribution in the other House he mentioned an employee of KPMG, but here he is talking about joint liquidators. Perhaps he might clarify the issue.

Senator Fidelma Healy Eames

This news will come as a shock to the staff whom the Minister has mentioned will have new negotiated rates. Is it expected that some of these rates will be higher or lower, or will the Minister have any say in the matter? Is it envisaged that there might be a saving to the State in this regard?

Deputy Michael Noonan

First, on the overall cost of liquidation, the assets being liquidated are valued at somewhere between €12 billion and €14 billion. Therefore, we are talking about a liquidation of assets worth €13 billion. The cost I was given earlier - it was more of a guesstimate than an estimate - was €30 million to €35 million based on standard NAMA fees. It is in that space, which does not appear to be excessive, given the quantum of assets with which it is dealing.

On the staff issue, there are a number of questions to be asked. I have answered Senator David Cullinane on the issue. The liquidator will be responsible for the staff as of tomorrow morning if the legislation goes through and it is signed by the President. In his other capacity, the legal capacity he took over in the afternoon, there would have been some communication with staff. I understand his point of contact is the human resources section of IBRC which has a designated officer. Obviously, it is very traumatic for staff because there was no expectation this would happen. It was surprising for the board also. One of our difficulties was that we could not bring this in confidence to the board of IBRC because if we did, under company law, as soon as it had been notified, it would have incurred legal liabilities on which it would have had to act. If the board did not act, it could have been guilty of criminal offences and its members would have been disqualified from ever serving as directors again. Their liabilities would have been in conflict in introducing the legislation tonight. Unfortunately, while there were many people in the loop of knowledge, IBRC was not. It was not possible to have contact about voluntary schemes of employment or anything like it. I am not familiar with the detailed arrangements concerning staff in IBRC because I was not in a position where I could have prudently inquired to obtain that kind of data without triggering questions such as, "What do you need that for?" and "What is the situation?" It might have brought about a worse situation than what we were in. It is the liquidator who will deal with the staff and it is my information from the liquidator that the intention is to offer jobs to the majority; that is how it was put to me. I am not sure of the exact number of staff in Ireland. There are about 930 to 940 altogether, some of whom are in the United States and London, but the bulk of them are in Ireland. It must be remembered that there is a lot of movement in the financial services sector. These are highly skilled workers; they are not people who will find it very difficult to get jobs because the financial services industry is thriving in Dublin.

The gentleman going in from KPMG was acting in his sole capacity today. He will be joined by a colleague tomorrow.

An Cathaoirleach

As it is now after 5.33 a.m., in accordance with the order of the House, I am required to put the following question, "That sections 6 to 25, inclusive; the Schedule; the Preamble; and the Title are hereby agreed to in committee; that the Bill is accordingly reported to the House without amendment; that Fourth Stage is hereby completed; that the Bill is hereby received for consideration; and that the Bill is hereby passed."

Question put:

The Seanad divided: Tá, 38; Níl, 6.

Tá

• Bradford, Paul.
• Brennan, Terry.
• Burke, Colm.
• Clune, Deirdre.
• Coghlan, Eamonn.
• Coghlan, Paul.
• Comiskey, Michael.
• Conway, Martin.
• Cummins, Maurice.
• D'Arcy, Jim.
• D'Arcy, Michael.
• Gilroy, John.
• Harte, Jimmy.
• Hayden, Aideen.
• Healy Eames, Fidelma.
• Higgins, Lorraine.
• Keane, Cáit.
• Landy, Denis.
• Mac Conghail, Fiach.
• MacSharry, Marc.
• Moloney, Marie.
• Mooney, Paschal.
• Moran, Mary.
• Mulcahy, Tony.
• Mullins, Michael.
• Noone, Catherine.
• O'Brien, Darragh.
• O'Donnell, Marie-Louise.
• O'Keeffe, Susan.
• O'Neill, Pat.
• O'Sullivan, Ned.
• Ó Domhnaill, Brian.
• Power, Averil.
• van Turnhout, Jillian.
• Whelan, John.
• White, Mary M.
• Wilson, Diarmuid.
• Zappone, Katherine.

Níl

• Barrett, Sean D.
• Crown, John.
• Cullinane, David.
• Heffernan, James.
• Ó Clochartaigh, Trevor.
• Reilly, Kathryn.

Tellers: Tá, Senators Paul Coghlan and Aideen Hayden; Níl, Senators David Cullinane and Trevor Ó Clochartaigh.

Question declared carried.