Seán Sherlock (Cork East, Labour)

I am proud to be present today because it is the first anniversary of the announcement by the then president of the Labour Party, Mr. Michael D. Higgins, of his candidacy for the office of President of Ireland. With your permission, a Leas-Cheann Comhairle, I will quote from his statement of that day:

The Labour Party is the oldest party in Ireland and was founded in the year before one of the greatest confrontations between labour and capital in the history of the Irish State, the great lock-out in Dublin of 1913.

He goes on to say:

What was then a poverty stricken and vulnerable movement of labour sought to organise against a version of capitalism that refused the most basic rights to workers, including the very right to organise. That confrontation required courage, tenacity, solidarity and, above all, a commitment to class and history beyond the short-term challenges. We should never forget that. To this day we are the beneficiaries of the struggle of the labour movement of 1913. Moreover, as their heirs we are required to make an analysis of our own difficult times to craft a strategy and to deliver our view of an alternative society with a sustainable and productive connection between economy and society in the institutions that can deliver it.

That man, thankfully, is now President of Ireland. I am proud to be here to say we are continuing, to the best of our ability, on his legacy and vision.

On the legislation, and that particular vision, given the day that is in it, I was glad to see the pupils of the Presentation primary school of Doneraile in the Gallery because we must have regard to their future. It is precisely in the vision set out by persons dating back to 1913, and through persons like President Michael D. Higgins, that such narrative continues. We do our best to ensure there is a future for those children.

The plight of employees in the current economic environment is foremost in the deliberations of Government as it seeks to stimulate the creation of jobs and a return to economic growth. Various high-profile cases that have been widely reported in the media highlight the precarious nature of employment in some sectors at present and the need to ensure vulnerable employees are treated fairly by employers and their complaints adequately adjudicated by the appropriate employment rights bodies of the State.

No doubt the proposed Bill under discussion here this evening is well intended. However, it is impractical in its scope and in terms of what it seeks to achieve. Ultimately, it could serve only to expose the taxpayer and employers to additional burdens while also, ironically, acting as a chill factor to the creation of vitally necessary new employment in the State. We need only go back to one of the original EU directives of 1998 in this area which notes the need "for balanced economic and social development" within the EU.

The Department of Social Protection has responsibility for the processing of claims under the redundancy payments scheme and the insolvency payments scheme. The insolvency payments scheme operates under the Protection of Employees (Employers' Insolvency) Act 1984 and is designed to protect certain outstanding pay-related entitlements due to employees in the event of the insolvency of their employer. Such entitlements include wages, holiday pay, sick pay, payment in lieu of minimum notice due under the Minimum Notice and Terms of Employment Act 1973 and certain pension contributions. The scheme comprises a one-off payment in respect of outstanding debts to employees in respect of their legitimate employment entitlements subject to certain limits.

The insolvency payments scheme and the redundancy payments scheme are two separate schemes, but they are both paid from the social insurance fund. In 2011, €18.5 million was paid from the insolvency payments scheme in respect of outstanding pay-related entitlements due to employees.

The Minister for Social Protection becomes a preferential creditor against the assets of an employer in respect of most amounts paid under the Protection of Employees (Employers' Insolvency) Act 1984 - the House will forgive me if this sounds technical, but I want to answer each of the points addressed in the Bill. The distribution of the assets to creditors, including the Minister, is subject to the legislation and rules governing the winding-up of companies. While an insolvent company, by definition, cannot meet its liabilities, the level of assets available for distribution can vary greatly. The Minister may receive a dividend or be paid in full if there are sufficient funds in the liquidation/receivership. All reimbursements made to the Minister by the liquidator from the assets of the company are returned to the social insurance fund.

Sinn Féin, in proposing this Bill, seeks to widen the scope of insolvency to effectively allow an employee to render a company insolvent, by amending a provision of the 1984 Act. The legislation currently in place provides for the recognition of companies becoming insolvent in circumstances such as where the employer has been adjudicated bankrupt; where the employer has filed a petition for, or has executed, a deed of arrangement within the meaning of section 4 of the Deeds of Arrangement Act 1887; where the employer has died and his or her estate, being insolvent, is being administered in accordance with the rules set out in Part I of the First Schedule to the Succession Act 1965; where the employer is a company, a winding up order is made or a resolution for voluntary winding up is passed with respect to it; where a receiver or manager of an undertaking is duly appointed, or possession is taken, by or on behalf of the holders of any debentures secured by any floating charge, of any property of the company comprised in or subject to the charge; and where the employer is of a class or description specified in regulations under section 4(2) of this Act which are for the time being in force and the circumstances specified in the regulations as regards employers of such class or description obtain in relation to him.

See this speech in context