Joan Burton (Dublin West, Labour)

I move amendment No. 14:

In page 17, between lines 29 and 30, to insert the following:

14.—Where an employer provides training to an employee, or pays the training costs of an employee to a third party, the provision or payment shall not constitute a taxable benefit-in-kind.".

I moved this amendment on Committee Stage and thank the Minister for responding to it. When employers provide training for employees as part of their employment, this is deemed to take place for the purposes of the business and is not subject to benefit-in-kind regulations. When an employee is made redundant and the redundancy deal provides for a training package, this package is deemed to be a benefit-in-kind and liable for taxation of up to 50% because it is no longer seen to be of benefit to the employer because the employee is being made redundant and undergoing training following redundancy. We are facing into a period when there will be a higher unemployment rate. A practice originated with a number of multinational companies which involved offering training packages to upskill departing workers to either assist them in respect of the job they had peformed, to help them to train for other jobs or to start a business. It seems unfair and anomalous that such packages in the hands of the employee being made redundant should be subject to tax as part of the redundancy scheme.

I am delighted the Minister has brought forward amendment No. 20 to address the issue. The case which gave rise to it is the one involving The Coca-Cola Company in County Louth which is, unfortunately, making employees redundant and where, as part of the redundancy package, employees are receiving training worth around €5,000. With these packages, no money passes to the employee. They cannot take the cash in lieu. It is not like winning a car and receiving its value in cash. One must take up the training package.

I have been asked a question about the Minister's amendment. Under section 201(1A)(a)(iii), provided for under the amendment, the training must be completed within six months of the termination of employment. I understand the Minister is anxious to prevent his amendment from being abused. In practice, is this wisest thing to do? Let me give some examples. During the years Dublin West has had large numbers of industries with a lifespan of ten to 15 years, such as call centres, IT centres, various types of factories and employments which have come and gone as business has changed or been outsourced to other countries. 3Com was a very good employer in the Dublin 15 area. It departed because it was affected by the bursting of the IT bubble. It outsourced and the employment went abroad. Many of the women who worked there retrained as special needs assistants and found employment in this expanding sector.

In many cases of redundancy it is not possible to find the course of one's dreams within the six-month period allowed. It is not always advisable to pay for a course up front. I know many young men who have been working in the construction industry for the past eight or ten years. They have worked under hard conditions. Many of them are highly skilled and possess an entrepreneurial spirit. Many of them now want to return to education and ultimately study at college for a degree. This should be encouraged. It can take a long time for people to organise a return to education and attending pre-university courses. The Minister seems to be confining it to very traditional workers' training rather than including education, learning and upskilling in the wider sense. If, for instance, the company making workers redundant was to suggest they do a return to education or a pre-university course which are provided by most colleges — in my view they are not doing enough in this area — the costs mount up. People in that situation usually work at night such as driving a taxi in order to pay the fees. I can see this is an anti-avoidance mechanism and I do not wish to detract from the Minister's desire to have an avoidance mechanism but I ask why the period could not be extended to encourage people to go the whole hog and if possible go to third level. The people coming out of the building industry have to be some of our best, most skilled and most entrepreneurial people. Many of them are under 35 years and many are under 27. I ask the Minister to think outside the box on this matter. We do not want people just doing training courses of the kind that in the mid-1990s and before employment started to take off, gave FÁS a bad name. I would like it to move from just courses to genuine learning and education because the economy has a shortage of IT sector skills, accounting skills and skills in areas such as asset management. Many financial services sector jobs require skills. A scaffolder may need to retrain and should be encouraged to go forward to third level education. This would be a real bonus to our economy. As people leave employment with a company they are given opportunities for personal development and upskilling. For some people that might well mean paying for driving lessons and getting a driving licence but for many others with a leaving certificate it could be the beginning of an opportunity to go to college, acquire qualifications and in turn be in a position to compete for a skilled job. We keep hearing that employers are having to bring in foreign workers. We could be facing into the worst of all worlds where the foreign workers made redundant in Ireland from sectors such as construction, are highly mobile, as suggested by the Taoiseach this morning. They can go abroad whereas our people are not that mobile because they have family and other commitments in Ireland. We need to provide them with the maximum amount of learning and educational opportunity.

I do not wish to seem churlish in not thanking the Minister for the amendment which I am delighted he has tabled. I commend the amendment but I ask him to be a little more flexible and open it wider to education and learning.

See this speech in context