Mr. Vernon Hegarty:

The Irish Congress of Trade Unions, ICTU, thanks the Joint Committee on Public Service Oversight and Petitions for the opportunity to provide observations on the issue of costs associated with taking a case through the EAT.

There has been much discussion about the shortcomings of the tribunal. However, it is important to remember from where it came. It was set out to be a relatively informal and inexpensive way for employees to vindicate their employment rights in certain areas of employment law. With its transformation from the redundancy tribunal to the EAT, it has, as rightly described by the petitioner, become not all together a friendly place. As a trade union advocate I know many individual workers who are not members of a trade union being dissuaded from taking their cases to the EAT because the other side has access to better legal resources. This is very far from what the tribunal was intended to be at its inception. It was to allow ordinary working people access to a forum without the requirement of legal or, indeed, trade union representation. As an advocate with the Citizens Information Board, I have seen it turn into a forum with senior counsels and solicitors with stacks of files on the other side of the table. This might be addressed in the legislation.

The petitioner has raised his experience of appearing at a tribunal. There are no costs to workers in accessing the EAT. Representation costs for trade union members have been paid for through their trade union subscriptions. The Minister has suggested the possibility of costs attaching to complaints or where referrals or applications are being made to the tribunal into the future, along with the possibility that provision for cost may be included in the workplace reform Bill. SIPTU, along with other trade union colleagues, is opposed to the introduction of such costs. We consider such a move anti-worker as it would have the effect of placing unnecessary hardship on workers and act as a deterrent in the vindication of employment rights. Such a move has been mooted in the UK with fees ranging from £250 to £950 for unfair dismissal cases and £350 for unpaid wages cases. These are retrograde steps and inconsistent with the tribunal’s purpose.

The cost of enforcing a decision or determination handed down in favour of a worker by the EAT is also met by his or her trade union. In this regard, the Minister’s proposal that enforcement may be possible through the District Court, as opposed to the Circuit Court, is a welcome move in bringing enforcement costs down. Any measure the Minister introduces to bring costs down brings us closer to the original purpose of the EAT, namely easy access to the vindication of employment rights. We would like to see the Labour Court playing a role in this in an effort to drive costs down further.

The retrieval of debts owed and the enforcement of determinations in decisions by third parties against employers who are technically but not legally insolvent remains an issue of grave concern to our members. Ever since the introduction of the Protection of Employees (Employers' Insolvency) Act 1984, there is a gap in this regard.

In the normal course of events, in order to enforce against any employer who has not paid our member such debt or third party award, we undertake a CRO search to determine that it is the correct legal entity against which we are enforcing, as is required by law. As a result, we determine not only the correct legal entity but the solvency or otherwise of the company, its annual returns and trading status, as well as that of any associated companies. This is vital to establish in bringing any such case. Where there is little or no difficulty with the company's solvency, we are in general successful in enforcing against the company. My colleague, Ms Deirdre Canty and I and others serve in the membership information support centre in SIPTU which deals with individual cases like this all the time. Establishing the status of that employer is vital because it can have implications for the prosecution of their case and, more importantly, in realising any award that is made by whatever forum we have been to.

Should we discover that a company has ceased trading and in effect walked away from its outstanding debts to employees, there is no solution available to the workers. Those may be debts that have accrued in terms of back wages or holiday entitlements. All those matters are covered under the 1984 Act, as amended. I beg to differ from the submission made by IBEC. The 1984 Act, as amended, establishes very narrow criteria against which insolvency can be established for the purposes of accessing the insolvency fund to make good on those debts. It is a very narrow piece of legislation in that respect. While the company will technically be insolvent, workers who have paid their social insurance contributions towards the State insolvency fund are not entitled to claim from this fund as the definition of insolvency under the Act, while being capable of, does not cover them for this situation.

That is a gap in the law that has never been closed. It has been observed to have been a problem for many years. I recall dealing with a specific company in Donegal in the 1990s on a voluntary basis as the employees were not trade union members. They came into difficulty. The company was in the Ballymoon industrial estate in Kilcar in south-west Donegal. It was a Swedish-owned company that had been grant aided by Údarás na Gaeltachta. These employees had been left at arm's length in the operation and there was a distanced management. Employees continued to work without getting paid for a protracted period. They had been used to periods like this where they might have worked for two or three weeks and some absentee manager would come by and pay them their back wages that had accrued. There came a point where no manager ever came back either to collect product or to do anything else and no wages were paid. Due to the fact that the Irish-registered aspect or associate company of the Swedish parent had not been rendered insolvent under the descriptions in the definitions of the 1984 Act, those individuals had no access to recovery of that debt of lost wages, accrued holiday entitlement or anything else. They tried to continue the business in the good faith that it would continue and were just abandoned. The Protection of Employees (Employers' Insolvency) Act 1984 had no application because the parent company in Sweden was not insolvent in line with its legislation so there was no place to go. This has been happening for decades, has never been addressed and is a great disservice to those individuals who find themselves in that situation because they are simply abandoned. I can understand the type of situation described by our colleague in Mandate based on his experience where the individual might then set up an alternative business in the same town.