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Select Committee on Enterprise, Trade and Employment díospóireacht -
Wednesday, 23 Feb 2022

Redundancy Payments (Amendment) Bill 2022: Committee Stage

I thank members and witnesses for participating in today's meeting. I remind members that they are required to participate in the meeting either within the committee room or remotely from within the Leinster House complex. Should a division occur, any members participating remotely will be required to make their way to the meeting room within the normal division time to vote before returning to their original location. The proceedings of Oireachtas committees are now conducted without the requirement for social distancing, with normal capacity in committee rooms restored. However, committees are taking a graduated approach to this change. Members and witnesses have the option to attend meetings in the relevant committee room or online, through Microsoft Teams. All those attending the committee room and its environs should continue to wear masks throughout the meeting. They may only be removed when addressing the committee. Members should continue to wash their hands, avail of sanitiser outside and inside the committee room, be respectful of other people's physical space, and practise good respiratory etiquette. Members and all in attendance are asked to exercise personal responsibility in protecting themselves and others from the risk of contracting Covid-19. Those with any Covid symptoms, no matter how mild, should not attend.

Apologies have been received from Deputy Matt Shanahan.

As normal, all documentation for the meeting has been circulated on Microsoft Teams. The meeting has been convened to consider the Redundancy Payments (Amendment) Bill 2022, which was referred to the select committee by the order of the Dáil on 3 February 2022. This short and technical Bill will resolve an issue arising regarding some employees who were laid off when Covid-19 restrictions were in place or who may be laid off over the next three-year period. Periods spent laid-off within the final three years of an employee's service do not count as reckonable service for the purposes of statutory redundancy payments. This means that a person who was laid off because of essential Covid-19-related restrictions will not have that period counted as reckonable service if he or she is made redundant within three years of the end of the emergency period. This Bill addresses that issue. I welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Damien English, who is accompanied by officials from his Department. Would the Minister of State like to make a short comment on the Bill?

I thank the Chair and other members for facilitating this Bill. We are in a position to move it through Committee Stage today, all going well. I am pleased to have the opportunity to discuss the Redundancy Payments (Amendment) Bill. The Bill provides for a payment from the State which will ensure that workers being made redundant will receive the same statutory redundancy payment as if they had not been laid off due to Covid-19 restrictions. Under existing redundancy provisions, a period of lay-off within the final three years of service before a worker is made redundant is not allowable as reckonable service. Therefore, the lay-off period is not counted towards a worker’s statutory redundancy payment.

Due to the necessary Government decisions to close and restrict certain sectors of our economy, some workers lost the opportunity to accrue reckonable service. This Bill will provide for a Covid-19-related lay-off payment from the State which, in the event of the worker’s redundancy, will cover lay-off periods due to Covid-19 restrictions. Payments will be made from the Social Insurance Fund. A worker does not have to have been in receipt of any form of State payment during the lay-off period. The criteria are simply that the person qualifies for redundancy in the usual way and was laid off because of Covid-19 restrictions.

The amount eligible workers will receive will depend on the length of time they were placed on lay-off due to Covid-19 before the date they were made redundant. The Bill does not change the fact that employers are obliged to pay statutory redundancy, which excludes lay-off periods in the final three years of employment, to eligible workers. However, employers will not be liable for this additional payment. The Covid restrictions which caused lay-off situations were completely outside the employers’ and employees' control. Imposing this cost on employers would be unfair. It would also conflict with wider Government policy, which, since the start of the pandemic, has been to minimise financial hardship on businesses and workers during the most challenging of times in order to protect those jobs.

This Bill provides the best outcome for both employers and workers. It will provide the legislative basis for the Department of Social Protection to process applications and make this payment to workers as soon as possible. It will be an employer-led online application process in the first instance. This is the most efficient approach from a customer service perspective. However, in the event an employer fails to make an application, I assure the committee that manual applications from workers will be accepted and they will not lose out.

Intensive work is ongoing on the development of the necessary systems, which was raised on Second Stage. I confirm that officials in the Department of Social Protection expect to open the application process during quarter 2 of this year. It will be in a position to do that in the next couple of weeks. I thank the Minister, Deputy Humphreys, and her officials for their important work on this. I thank Deputies for their contributions on the Bill on the previous stage. I look forward to today's discussion. One of the major changes that people asked is in amendment No. 4, which extends the timeline. I am conscious that Members raised that. There was unanimous support for this change. I hope, if the committee accepts the amendment, that it will deal with the issue.

A number of amendments tabled on Committee Stage have unfortunately been ruled out of order. Amendments Nos. 1, 2, 9 to 15, inclusive, and 22, tabled by Deputy Louise O'Reilly, are out of order. Amendments Nos. 3 and 16 to 18, inclusive, tabled by Deputies Paul Murphy, Bríd Smith, Richard Boyd Barrett and Gino Kenny must be ruled out of order in accordance with Standing Order 187(1) as they are not relevant to the provisions of the Bill. Amendments Nos. 10, 13 and 14, tabled by Deputy Louise O'Reilly, must also be ruled out of order in accordance with Standing Order 212(3), as they have the potential to impose a charge on the Exchequer. Amendment No. 5, tabled by Deputies Paul Murphy, Bríd Smith, Richard Boyd Barrett and Gino Kenny must be ruled out of order in accordance with Standing Order 212(3), as it has the potential to impose a charge on the Exchequer.

The remaining amendments will be considered at today's meeting and groupings apply to amendments Nos. 4, 6 and 7 and Nos. 8 and 19 to 21, inclusive. I propose we try to complete our Committee Stage consideration of this Bill today. Is that agreed? Agreed. Does anyone want to come in there? Deputy O'Reilly wishes to.

Some days you get lucky with amendments and some days you do not. All of mine have been ruled out of order but I want to speak broadly, if I can, to the intention of those amendments. I understand we cannot get into the substance of them and I do not intend to do that. The amendments had a single purpose, namely, to deal with the issue of tactical insolvencies. I fully accept that is not within the scope of this Bill. Maybe the Minister of State will take a little time to update us on the plan for the action on collective redundancies following insolvency. I am aware there is some work under way on that. I got that in a reply to a parliamentary question and it would be helpful if we could hear that.

The Minister of State is well aware of the issue. We saw Clerys broken into two companies. One was the operations and the other was employing the workers. They never knew they were working for two separate companies. They only knew they were working for Clerys, which many of them had worked for all their lives and given good and loyal service to. Then overnight their jobs were gone. The assets were transferred to the operations company, that was liquidated and the workers were left absolutely high and dry. A similar but not exactly the same situation happened in Debenhams, but whatever the technicalities of it the upshot is the workers were left high and dry at the end of it. We saw it with Clerys, La Senza, Paris Bakery and TalkTalk. They are what are known as tactical insolvencies. The purpose of the amendments I put forward were to deal with tactical insolvencies and situations whereby companies use the courts to engage in a tactical liquidation. That means they can avoid paying what are, essentially, their debts.

This legislation recognises the fact that, through no fault of their own, workers found themselves on lay-off and they should not find themselves disproportionately impacted by something that was not their fault. Likewise, in the situation of a tactical insolvency, workers who have given good and loyal service find themselves in a situation whereby the company goes out of business and they are left with absolutely nothing. The majority of companies do not engage in this practice but legislation is required for those that do. They are only small in number and I would not want to portray this is as all workers being in danger of this happening to them. However, when it happens it is absolutely devastating. The Minister of State will know this because he has met the workers from Debenhams and some of these other companies. He knows what needs to be done. Many of these cases end up being high-profile because the practice is quite shocking to people. They find themselves in a state of shock.

I appreciate my amendments have been ruled out of order. However, the Minister of State might take this opportunity to advise us about it. According to the reply to a parliamentary question I tabled: "Work has ... commenced on the drafting of the Terms of Reference for the Employment Law Review Group ...". That is to organise the membership. The reply states the group hopes to be up and running "on a non-statutory basis, in Q1 of 2022". We are heading into the last month of that quarter. I apologise as I appreciate this parliamentary question does not relate directly to the legislation but it is in the general area of redundancy. I ask that the Minister of State provide an update. If he cannot, a response in writing would be good. We all had huge sympathy for the workers from Debehams and we all saw what happened. When we looked back we saw that was a repetition of similar - not exactly the same, but similar - situations in other companies. As we move out of the pandemic, if there is going to be any pandemic dividend this must be part of it. Work on tactical insolvencies and collective redundancies must be part of the pandemic dividend, if you want to call it that. It should not have taken a pandemic to put it on the agenda but the workers deserve nothing less than that. I thank the Chairman.

The Deputy will appreciate I am not going to go through every amendment that was disallowed. They are not related to this Bill but I appreciate why she wants to bring them up and have them discussed. I would be happy to return at a later stage to do that.

When I was at the committee discussing the Duffy Cahill report, I outlined our issues with that report and also outlined the changes we were bringing into place on that. I committed I would return to the committee at a time that suited members. When the committee has completed its own report on that I will be happy to look at that too and go through it with members. I have not yet got it on my desk - maybe I have missed it or something like that - but I am happy to discuss it with the committee whenever that arises. I will given an update on the plan of action following our report on that. To be very clear, while there are many differences of opinion around the Debenhams situation in here, I repeat that if anybody has any evidence that is different from what I have I would like to have it. I have asked for that on a number of occasions at committee, in the Dáil and so on. I would be glad to get it at any stage in order to be able to review it. It has not been so today but often with this discussion, what is said does not match up with the evidence. We will of course take any new evidence and review that.

The Tánaiste and I committed, when we met the Debenhams workers, to review the legislation in this area and, if we could at all, to strengthen the protections for anybody in that situation. Nobody could have anything less than sympathy for anybody in that situation of redundancy. We committed to doing that and as a result of that work there was a plan of action. I do not have it with me but from memory I will give the committee the low-down on where it is at. The employment law review group we have set up is being scoped at the moment. It should be in a position to be able to discuss that with the committee here and bring it forward before the end of quarter 1 but certainly within quarter 2. Quarter 1 was our aim and that work is ongoing with the membership and to have that set up and on a statutory basis. We are pretty much on track to do that, be it at the end of quarter 1 or early quarter 2. That will happen; it is a commitment that is there. There have already been changes in the small company administrative rescue process, SCARP, legislation that was brought forward. That effected some of the changes that were recommended as well. The Company Law Review Group, CLRG, has also completed its report into this very complex area. That report was with the Tánaiste and the Minister of State, Deputy Troy, as of the end of 2021. We will bring forward recommendations and changes out of that as well. It will be published when it is appropriate.

Like the Deputy, the Office of the Director of Corporate Enforcement, ODCE, notes the number of cases in this situation is limited. There are some and there is no point in denying that but it is not the norm. If we can strengthen that then of course we will but the ODCE points out again that there is already legislation in this situation already. That confirms what we have said on numerous occasions. It is there but is not always used and that is what we have had to discuss with the unions quite a lot, in order to see whether we can we make that more user-friendly and more available. I am happy to debate that with members, and so will the Minister of State, Deputy Troy, when it is appropriate. The handbook was published, I think, in December as well. It is a very useful guide for employees, who might not always be aware of the situation or the laws. It will help them with their work, with their representatives and with their unions as well. That is a quick summary of that. Again, it is an area we are very much committed to so I am happy, at a later stage, to discuss it again with the committee when it is appropriate to do so.

I thank the Minster of State. I do not think anyone else wants to contribute on that so we move on the amendments. As members know, the amendments have been grouped and they have been sent a list of them.

SECTION 1
Amendments Nos. 1 to 3, inclusive, not moved.
Section 1 agreed to.
SECTION 2

I move amendment No. 4:

In page 3, to delete lines 15 to 23 and substitute the following:

“(b) whose entitlement to a lump sum payment under section 19 arises during the period beginning on 13 March 2020 and ending on 31 January 2025, and

(c) who was laid off during the period beginning on 13 March 2020 and ending on 31 January 2022 due to the effect of measures required to be taken by his or her employer in order to comply with, or as a consequence of, Government policy to prevent, limit, minimise or slow the spread of infection of Covid-19.”.

As Deputies are aware, the Bill as published provided that the payment would apply to workers who were laid off due to Covid-19 restrictions for periods from 13 March 2020 to the end of September 2021 and who are made redundant before 30 September 2024. This reflected the situation at the time of publication, when restrictions were easing and the economy was reopening. I think that was back in September 2021. However, we all know we suffered a setback as a result of the Omicron variant and some restrictions were necessary during December 2021 and January 2022. This particularly affected the entertainment and hospitality industries. This was well flagged by Deputies in their contributions on Second Stage in the Dáil. Therefore, to ensure that all periods of temporary lay-off due to Covid-19 restrictions are encompassed by this new payment, the amendment will extend the lay-off periods covered to 31 January 2022. It also means the payment will apply to workers who are made redundant before 31 January 2025. Those are the three years referenced earlier on. This will increase the maximum any worker will receive to €2,268 if he or she was on lay-off due to Covid-19 restrictions for the entire period between 13 March 2020 and 31 January 2022 and normally earned at least €600 per week.

Amendments Nos. 6 and 7 provide for the deletion of the word “emergency” on two occasions where it occurs in this Bill. This is not to downplay the emergency and exceptional nature of restrictions or the gravity of their effect. It is because previous amendments to the Redundancy Payments Act 1967 refer to the “emergency period” in the particular context of section 12A. Since the extension we are now proposing is no longer clearly linked to that specific timeframe, the deletion will avoid any ambiguity as to the period eligible to be covered by the Covid-19 lay-off payment. The amendments here reflects the change we were looking at ourselves but also that members clearly raised a few weeks ago in the debate on Second Stage.

This amendment is appropriate and I recommend that members accept it.

I welcome that the issues raised are being addressed. The extension, though, is to 31 January 2022. There are still people who are laid off now. Where will that leave them? I refer to situations where it is necessary for people to have recognition of continuous service. Where does this leave those people? Even if we were sitting here and we were able to say that the pandemic is 100% over - and the Minister of State will be aware from listening to medics that they will never be able to say that, while we as lay people may be - there are still people who are temporarily laid-off as a result of Covid-19. I wonder if it would not be prudent to extend this measure a little while. Will we not have people going back to work who are only slightly outside the provisions?

Most people are, hopefully, going to be back in work and going back to where they were working. A small number of people, however, are still laid-off today who would not be covered by this proposal, in the event that they find themselves in this situation when they go back. Would it not be worthwhile, therefore, to have a short extension of this measure, not forever or indefinitely, to encompass a point - and I know we are not going to have anything stupid like a "Freedom Day" or anything like that - when all workers should have gone back to work, or else it can be assumed they will not be going back. I am wondering how this proposal would work for those people who are still laid-off today.

It is a fair question and observation. The difficulty we have is that the legislation must be linked to the restrictions. We are saying that lay-offs until 22 January 2022 are linked to Government restrictions. They are not lay-offs because of Covid-19, but because of interventions by the Government which restricted businesses' ability to operate at full capacity. Those restrictions have been fully removed since 22 January. There are going to be ongoing issues relating to Covid-19 for God knows how many years in some sectors and some companies and there are other supports and initiatives which will see the Government step in. Regarding this legislation and this link to Covid-19 restrictions, we had previously linked this to section 12A. We extended that in tandem with the restrictions to 22 January. I think it is a fair date; I am not sure how we could pick any other date or how that assessment could be made.

To be clear, then, the purpose of the Bill is to ensure that employees who were laid off due to Covid-19-related restrictions are not disadvantaged should they be made redundant. Again, the State is taking up that cost. I think we have made the best attempt to get this right and the Deputy will appreciate that, because I am not sure what other rationale we can work off, bar these measures being linked to restrictions.

I fully appreciate that, and I am not being argumentative. I am simply asking about those people whose companies have not started back working yet. The restrictions may have been lifted, but some companies are in the process of coming back into operation. Supports are still in place for companies and for workers. It strikes me that for as long as people are receiving a Covid-19-related benefit and are not in work, then that should be the mechanism by which it is judged. I refer to the last Covid-19-related benefits being paid in the context where people want to go to work but cannot, and that that type of situation should be linked. I appreciate that might be difficult to do. There are people, however, who are in this type of situation. The numbers might be small, but that was also true for the cases I highlighted. It does not mean that the consequences have not been grave for each individual affected.

There must be a cut-off date, and I am not suggesting for a moment that this provision would be openended or indefinite at all. I am only asking that consideration perhaps be given, not on this Stage, but when we are doing the final Stages, to those people who are currently laid off. I refer to people who may be laidoff and on Covid-19-related benefits. They should be encompassed by this legislation. I think the numbers are small. Again, I am not trying to say that these measures should be openended and last forever. They should, however, last for the duration of the Covid-19 benefits because they are specifically linked to Covid-19 related lay-offs.

We could find ourselves here in a year or two going back over the cases of people, a small number, who found themselves in difficulty regarding what might technically be considered a break in service. People receiving a Covid-19-related benefit because they are not in work, who then go back to work and find themselves made redundant, will not have this period of service considered in the same way it was for everybody else. It may be that this may not turn out to be an issue. Hopefully, everyone will go back to work and find they will not need redundancy payments. It strikes me, though, that a small number of people may end up in that situation and I ask that consideration be given to them.

I understand the point the Deputy is making, but there is not the rationale to implement what she is suggesting. As she said herself, none of us here could figure out what date to use for the ending of this measure or how we could judge that aspect. The rationale the State has taken here is a pre-emptive one. We recognise that neither employees nor employers are responsible for this situation. The restrictions prevented people from working and they were temporarily laid off. Section 12A prevented employees from triggering redundancies themselves. That measure ended in September 2021, and it was the initial link with this legislation.

We have gone beyond that now in the last few months to try to include those impacted by the restrictions which remained in some sectors. I do not think we can go beyond that, however, and I do not see how we could do so. Since the lifting of restrictions, we have expected employers to make the relevant decisions that are right for their businesses, whether that is to bring their staff back to work or to make the difficult decision to make them redundant. There will be fallout from the impact of Covid-19 well into the future. Naturally, through all our Departments, but mainly through this Department's supports for businesses, the number of people affected by such decisions should not be high and we will do all we can to prevent people from losing their jobs and to protect those jobs.

We have proven our intent in that regard. This legislation goes as far as it can go and this amendment brings the situation not in line with the restrictions but beyond it. It is a fair date to have picked. I am not sure we can accommodate another. I understand why the Deputy is asking the question and I accept it, but I do not know how we could accommodate her request or link any such provision to legislation in future. We have made the best attempt here to get this right. It means that anybody laid off because of restrictions the Government put in place is covered.

I do not want to be argumentative, but are there not people who are laid off now because of restrictions who are receiving Covid-19-related benefits for whom-----

Not because of restrictions.

The link is directly to restrictions.

Absolutely. I refer to any restrictions that could result in people being laid off having been lifted by 22 January 2022. This legislation brings that date to 31 January 2022, well beyond it. I think we are being very fair in our assessment and that we have got this right legally. We made every effort to cover this situation. It was drafted in conjunction with everyone on this committee. We reflected on all those contributions on a previous Stage. We got Cabinet agreement to go to the end of January and I think anybody would say this is now a fair assessment of the situation. I do not see how it is possible to go beyond that, because it is linked to Government-imposed restrictions that resulted in lay-offs.

Amendment agreed to.
Amendment No. 5 not moved.

I move amendment No. 6:

In page 4, line 15, to delete “emergency”.

Amendment agreed to.
Section 2, as amended, agreed to.
SECTION 3

I move amendment No. 7:

In page 4, line 32, to delete “emergency”.

Amendment agreed to.
Section 3, as amended, agreed to.
SECTION 4

Amendments Nos. 8 and 19 to 21, inclusive, are grouped.

I move amendment No. 8:

In page 4, between lines 33 and 34, to insert the following:

“Amendment of Act of 2021

4. (1) Section 11 of the Act of 2021 is amended by the substitution of “Schedule 1” for “Schedule 2”.

(2) This section shall come into operation on the day on which section 11 of the Act of 2021 comes into operation.

(3) In this section, ‘Act of 2021’ means the Companies (Corporate Enforcement Authority) Act 2021.”.

The purpose of this group of amendments, which I signalled on Second Stage, is to correct a simple but important cross-referencing error in section 11 of the Companies (Corporate Enforcement Authority) Act 2021. That Act passed all Stages in the Houses of the Oireachtas and was signed into law by the President on 22 December 2021. The members of the committee will be familiar with the legislation and its content having considered it recently and they are supportive of its objective to establish the new corporate enforcement authority. As the members are aware, the Act provides the legal framework to transform the Office of the Director of Corporate Enforcement, ODCE, into a stand-alone new authority.

Simply put, section 11 incorrectly refers to Schedule 2, when it should refer to Schedule 1. The Schedule itself provides for certain matters on the establishment of the new authority. By way of example, these include that "The Authority shall be a body corporate", with its name contained in the Constitution, "with perpetual succession" and a common seal. It is important that we fix this error without undue delay to not hold up the next phase of the transformation of the ODCE into the new authority.

Regarding the detail of the amendments, a new section 4 is inserted into the Bill that amends an incorrect reference to Schedule 2 by changing it to "Schedule 1".

The new section 4 and the amendments to the consequently renumbered section 5 have been drafted to ensure that this section will commence automatically on the commencement of section 11 of the Companies (Corporate Enforcement Authority) Act 2021. I would be grateful for the members' support in expediting this change.

Amendment agreed to.
Amendments Nos. 9 to 18, inclusive, not moved.
Section 3, as amended, agreed to.
SECTION 4

I move amendment No. 19:

In page 4, line 36, after “Act” to insert “, other than section 4,”.

Amendment agreed to.

I move amendment No. 20:

In page 4, line 38, after “Act” to insert “, other than section 4,”.

Amendment agreed to.
Section 4, as amended, agreed to.
TITLE

I move amendment No. 21:

In page 3, line 7, to delete “30 September 2021;” and substitute “31 January 2022; to amend the Companies (Corporate Enforcement Authority) Act 2021;”.

Amendment agreed to.
Amendment No. 22 not moved.
Title, as amended, agreed to.

Pursuant to Standing Order 187(3), I have to report specifically to Dáil Éireann that the committee has amended the Title to the Bill to read as follows:

An Act to amend the Redundancy Payments Act 1967 to provide for payments to employees in respect of certain lay-off periods during the period beginning on 13 March 2020 and ending on 31 January 2022; to amend the Companies (Corporate Enforcement Authority) Act 2021; and to provide for related matters.

Bill reported with amendments.

I thank the Minister of State and his officials for attending today's meeting. I look forward to the Bill being enacted and implemented as soon as possible.

Barr
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