Oireachtas Joint and Select Committees

Wednesday, 2 December 2020

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Brexit and Readiness of Businesses, Employees and Communities: Discussion

Ms Patricia King:

I will answer the Senator's question on the short-time working scheme. The scheme that operates in Germany is built on a tripartite model, that is, there is a contribution from all three elements - the state, the employer and the worker. Let us take a company that might have 200 workers. It is producing well at the moment in the non-Brexit scenario, but it knows that the product it is making is not going to be necessarily viable in the post-Brexit scenario. What would happen in Germany is that there is a dialogue between the state, the employer and the workforce. The contribution from the workforce would be the decrease in net income. In the case of Germany, on average, there is a 75% assurance of net income, so that is the contribution from the worker. The state and the employer would agree to put in a percentage to ensure that the 75% of net income was maintained. The workers would be retained in contact with the employer. The employer would have to demonstrate that it would have a prospect of viability in terms of diversification of market. For instance, if the product were to be sold in X, Y and Z countries outside of the UK it could take approximately two years to achieve that and it would need the workforce to be agile and trained up to do the work and therefore the training and upskilling would take time. Everybody agrees to take part in the project to get them to the place where they are at full production in two years when they have new markets opened, they are selling into them and they have the prospect of increasing their employment. That is the very positive piece that can happen. All three elements are investing in the company being ready for the diversified market within a certain period.

That is how the German scheme operates. It is forcing companies to look at finding alternatives to their current model and developing markets outside of the UK, which is what they are comfortable with at the moment. It is giving a sustained certainty to the income of the workers who stay with the company for the long haul and come out the other end with a full productivity in the new markets. That is the basis of the scheme.

We have had quite a successful scenario with the Department of Foreign Affairs, led by the Minister for Foreign Affairs, in recent years in terms of a Brexit stakeholder forum. We should convert that now into a Brexit social dialogue on all of these issues we are discussing this morning. We should be in there as we speak, looking at options. The point Senator Ahearn raised about Revenue indicates there is a lack of joined-up thinking there or that we are operating in silos. We should not allow those things to happen. That does not mean we ignore the fact that Revenue issues have to be dealt with, but we should have a dialogue where the issues relating to the short-time scheme, the export credit insurance scheme and other such issues could be discussed around the table and we could look for solutions and see what we are going to do to resolve them in a joined-up way. That is the value of having that dialogue. I suggest that the Brexit stakeholder forum needs to morph into a dialogue forum on these issues. That would be my offering in terms of attempting to find a solution.