Tony Killeen (Clare, Fianna Fail)

I thank the Deputies for raising this matter.

In March 2006, Greencore Group plc announced its intention to cease sugar production in Ireland completely. The announcement followed an agreement on 24 November 2005 by EU Agriculture Ministers on a reform plan for the sugar industry involving cuts in the support price of sugar by 36% over four years. The company duly closed the remaining factory at Mallow in May 2006, with 324 redundancies, and applied for EU restructuring aid in July.

The agreement on reform of the EU sugar regime reached by the Agriculture and Fisheries Council in November 2005 provided for a scheme for the restructuring of the sugar industry. Under the scheme, aid is provided for three groups: the processor, beet growers and machinery contractors. For Ireland, the aid available under the scheme is approximately €145 million. Drawing down of the restructuring aid is conditional on the submission by the processor of an aid application to the Minister for Agriculture and Food, including a detailed restructuring plan for the industry. The restructuring plan includes, among other matters, "a social plan detailing the actions planned in particular with respect to retraining, redeployment and early retirement of the workforce concerned".

The Government at its meeting on 12 July 2006 made certain decisions on the implementation of the restructuring aid. The Government decided on the amount to be reserved for growers and contractors and provided an illustrative breakdown of the potential allocation of the aid to be followed by Greencore in preparing its restructuring plan, including a figure of €28.4 million for employee redundancy payments. This figure as well as others in the Government decision was based on information supplied previously by Greencore. These decisions, which were published by way of press release by the Minister for Agriculture and Food on the same day, are now the subject of judicial review proceedings instituted by Greencore.

Greencore duly submitted an aid application in July 2006 committing to dismantle the Mallow factory fully. The application stated that with regard to redundancy payments it was honouring the Labour Court recommendation. The application was approved subject to the outcome of judicial review proceedings instituted by Greencore.

The company and the trade unions entered negotiations regarding the redundancy package. However, agreement was not reached on a number of issues and these were referred to the Labour Court. On 26 April 2006, the Labour Court made a recommendation regarding the redundancy terms for Irish Sugar workers at the Mallow plant. The recommendation provided that redundancy should be five weeks' pay per year of service, where a week's pay would be defined as actual finishing salary, excluding overtime, plus statutory redundancy entitlement, plus a bonus payment for an orderly wind-down. The unions were not satisfied with the method for calculating finishing salary used by the company. The court issued two clarifications in May, which failed to achieve a resolution to the dispute.

The Redundancy Payments Acts 1967 to 2003 oblige employers to pay redundant employees what is known as "statutory redundancy entitlements". The amount payable is related to the employee's length of service and his or her gross weekly earnings. The entitlement is calculated on the basis of two weeks' pay for every year of service, plus a bonus week, subject to a maximum wage ceiling of €600 per week. Periods of lay-off or sickness of more than six months are not included in the calculation in respect of the last three years of employment.

Employers who pay their workers their statutory redundancy entitlement and give them proper notice of being made redundant — at least two weeks — are entitled to a 60% rebate from the Department of Enterprise, Trade and Employment, financed by the social insurance fund. In cases where an employer fails to make statutory redundancy payments, the Department steps in and pays the full amount directly to the employees from the social insurance fund, and then seeks recovery of the amount paid from the employer.

I am assured that all former workers at the Mallow factory have received their statutory redundancy entitlements. I understand a significant number of former workers have accepted the company's redundancy offer and have received payment from the company. The remaining workers are disputing the company's non-statutory offer. The trade unions representing workers who have not accepted the redundancy terms on offer, SIPTU and TEEU, balloted their members on industrial action.

Industrial action was scheduled to begin on 4 October 2006, but was suspended following a request from the Labour Court for the parties to return to the court for further clarification of its recommendation. The trade unions indicated that they would attend the court, but the company declined the offer. I very much regret the decision taken by the company in this regard.

The Labour Court issued a third clarification of its recommendation on 17 October 2006. The content of this clarification is confidential to the parties and has not been published by the court. The company has indicated it is not prepared to alter its offer. Similarly, the trade unions have not changed their position and are not prepared to accept the company's existing offer.

The Minister for Enterprise, Trade and Employment, Deputy Martin, has met representatives of both the trade unions and the company and urged them to resolve their differences and to avail of the dispute settling machinery of the State, as necessary. I have also met union representatives to discuss this matter. The national implementation body has worked with the parties concerned to seek to identify an agreed procedure to resolve the issue in dispute. Ireland's system of industrial relations is essentially voluntary in nature and responsibility for the resolution of industrial disputes is a matter for the parties involved. The system of industrial relations in Ireland is designed to help and support parties in their efforts to resolve their differences rather than imposing a solution on the parties to an industrial dispute.

Where the Labour Court operates as an industrial relations tribunal in trade disputes, its recommendations are not enforceable. In such cases, the court hears both sides and then issues a recommendation setting out its opinion on the dispute and the terms on which it considers the dispute should be settled. While these recommendations are not binding on the parties concerned, the parties are expected to give serious consideration to the court's recommendation. As the Labour Court is a court of last resort in the industrial relations process, it is expected that the parties come to the process in good faith and are consequently prepared to accept the outcome, namely, the Labour Court's recommendation.

While responsibility for the settlement of a dispute ultimately rests with the parties themselves, I urge the company to reconsider its decision not to attend the Labour Court for talks. The court remains available to the parties to advance a resolution to the dispute. The experience and expertise of the Labour Court offer the best avenue for resolving the issue under dispute.

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