Dáil Éireann Debate, Thursday - 3 October 2013
7. Deputy Willie O'Dea asked the Minister for Finance his views on the concerns expressed by the head of the National Asset Management Agency regarding the scale of staff turnover and the quality and experience of departing staff; and if he will make a statement on the matter. [41471/13]
Amharc ar fhreagraI am aware from my discussions with NAMA, and with the NTMA which employs staff assigned to NAMA, of the difficulties being experienced by NAMA in terms of retaining and recruiting appropriately skilled and experienced staff. It is important that NAMA, on behalf of the taxpayer, has the expertise available to it to carry out its commercial mandate with the aim, at minimum, of eliminating the contingent liability of the State arising from its current portfolio and from the portfolio that it may acquire later in the year from the special liquidators to the Irish Bank Resolution Corporation, IBRC.
All NAMA staff are employees of the NTMA and are assigned to NAMA by the NTMA. NAMA advises that 59 staff assigned to NAMA by the NTMA have resigned from the agency since inception. Some 28 members of staff have resigned so far in 2013 and 22 members of staff resigned in 2012, representing a 10% turnover rate in that year. We have entrusted NAMA with the extremely important task of mitigating risks and recovering value for the taxpayer, and so would hope NAMA is able to attract and retain professionals best able to ensure NAMA's success.
The CEO and chairman of NAMA have recently expressed concern in this regard in light of public pay restrictions, and have highlighted the fact that with the departure of each employee there is a loss of business knowledge, continuity and momentum. Although a certain level of staff turnover is to be expected as the property market recovers, which is arguably positive for the development of asset management expertise across the Irish market, it will continue to prove a challenge to NAMA.
I am satisfied that there are extensive safeguards in place to protect the confidentiality of information held by NTMA employees, including those assigned to NAMA. Employees assigned to NAMA by the NTMA, as is the case with all other NTMA staff, are subject to section 14 of the National Treasury Management Agency Act 1990 which prohibits an employee from disclosing any information obtained while carrying out his or her duties as employees of NTMA. Employees assigned to NAMA are also subject to a prohibition on release of confidential data under sections 99 and 202 of the NAMA Act 2009. NTMA employees, including those assigned to NAMA, are subject to the Official Secrets Act. Contravention of these prohibitions is a criminal offence. These protections do not cease at the point of resignation but apply indefinitely and extend to former employees.
The notice period for NTMA employees assigned to NAMA is typically three months. NTMA contracts for employees assigned to NAMA have a provision entitling NTMA to place the employee on garden leave at any point during the notice period during which time the employee may not work for another employer. Following a review of its policy in respect of notice periods and post-termination restrictions on employment, which was conducted on NTMA’s behalf, as employer, by the law firm Matheson, NTMA is implementing a number of changes to its employment contracts, including the introduction of longer notice periods of three to six months, up from one to three months, for middle and senior management employees and garden leave provisions to be included in all new employment contracts.
In addition, a new provision is being added in new employment contracts, where relevant, that restricts departing staff from performing services for a new employer during the first six months following the termination of their employment with NTMA, relating to a transaction or other matter in respect of which they participated directly or substantially in the course of their employment with NTMA and were in possession of confidential information as a result. In respect of NTMA employees assigned to NAMA, this provision has been introduced for all new employees and existing employees as they are promoted. As I pointed out, the three-month notice period and garden leave provisions already apply to NTMA staff assigned to NAMA. Despite the concerns raised I have every confidence that NAMA will continue to meet its bond redemption targets and achieve its overall business plan objectives.
I thank the Minister for his response. We all have a vested interest in NAMA succeeding and performing its functions well. The staff turnover rates in NAMA are very high. I suspect they are disproportionately high at a senior level. Staff appear to feel they can, and they do, attract higher salaries when they leave the agency. I find that remarkable but it seems to be the case. It must be one of the explanations why so many senior people have left the agency in recent times, despite being very well paid. There might be a need for a cooling off period for people who leave senior positions in the agency. The Minister outlines some of the safeguards regarding confidentiality etc. However, many people who have left senior positions in NAMA have seamlessly moved into very senior positions in property investment firms and real estate firms, and property consultancy. I do not suggest any impropriety but there is potential for people to use relationships they have developed and knowledge, as opposed to information, they have built up during their time in NAMA. The Minister was to examine the issue. Could he update us on that?
The notice period for NTMA employees assigned to NAMA is typically three months. NTMA contracts for employees assigned to NAMA have a provision entitling NTMA to place the employee on garden leave at any point during the notice period during which time the employee may not work for another employer. Following a review of its policy in respect of notice periods and post-termination restrictions on employment, which was conducted on NTMA’s behalf by the law firm Matheson, NTMA is implementing a number of changes to its employment contracts, including the introduction of longer notice periods of three to six months, up from one to three months, for middle and senior management employees and garden leave provisions to be included in all new employment contracts.
In addition, a new provision is being added in new employment contracts, where relevant, that restricts departing staff from performing services for a new employer during the first six months following the termination of their employment with NTMA, relating to a transaction or other matter in respect of which they participated directly or substantially in the course of their employment with NTMA and were in possession of confidential information as a result. In respect of NTMA employees assigned to NAMA, this provision has been introduced for all new employees and existing employees as they are promoted. As I pointed out, the three-month notice period and garden leave provisions already apply to NTMA staff assigned to NAMA.
My concern is whether NAMA is being used as a training ground for people who then move to the other side of the fence. The Minister has outlined some of the changes that have been identified. Has NAMA implemented those changes and is the Minister satisfied that they are adequate to address the concerns that have been raised?
The Minister spoke about the NTMA reviewing the contracts and mentioned new employees and those seeking promotion. We are aware that this issue does not just affect NAMA, it also affects employees who have been seconded to the Department of Finance. There are concerns about banks poaching certain people who worked in the banking unit within the Department who may have information. A period of from one to three months is not acceptable, but six months also seems to be quite limited. I believe the Minister wanted to go beyond this in the commitment he gave. Can these provisions not apply to existing staff within the Department who could be seconded, as well as those in the NTMA or NAMA?
This is not cost free because we are effectively paying somebody after he or she has gone and also paying his or her replacement. Therefore, there is a cost issue - we are paying twice for the same set of functions to be carried out. We try to measure it by what is adequate and what provides protection, but I do not want to go beyond this. We have arrangements in place in the Department, but there is significant accrued leave in the Department of Finance because many of the senior people do not even get their holidays. We had an example in the public media of a senior official transferring from the Department of Finance to one of the banks. He went on holidays well before there was any announcement of his job and had worked out a kind of self-imposed gardening period before he made the transfer. He would be subject to the law and the Official Secrets Act also.
With regard to the reasons people are leaving and whether NAMA is a training ground for the property industry, when NAMA was set up, the property industry was banjaxed and many people were looking for jobs. Now that the industry is rising again and there are significant commercial transactions in Dublin, there are far more opportunities. Therefore, while jobs with NAMA were very attractive three years ago, there may be more attractive jobs in the private sector now.
One last point, one of the big problems for a young person looking for a career is that NAMA is supposed to finish up in 2020. Even if the job is well paid and better paid than jobs in the private sector, a person cannot plan a career in an organisation that is going to terminate. That is one of the big difficulties. As we move through the years towards 2020, we will see more people leaving.
