Michael Healy-Rae (Kerry South, Independent)

I welcome Senator Feargal Quinn to the Chamber. I acknowledge and thank him for the work and effort over a long period of time that he has put into bringing this legislation before the House to be discussed today. I welcome the opportunity and thank the Technical Group for allowing me some of its time to speak on this important Bill. I also wish to acknowledge Mr. Seán Gallagher, who went to Senator Quinn in the early stages about this continuing problem.

In case anybody thinks that because of the breakdown in the construction sector, this is not a problem today, it is a more confounded problem now than ever before for the following reasons. There are people pricing jobs and making commitments to carry out work at unrealistic prices. The only way they can meet their commitments is if someone is not paid. I will cite an example of this ongoing practice in a public contract.

People who worked on a school building project in Kenmare have not and will not be paid. It is awful that subcontractors who supplied concrete, stone and aggregate for certain jobs and enabled projects to rise from the ground will never be paid. I have been given permission to name one of the subcontractors in question in the House. Timmy Harrington ran South West Concrete and was owed money by a subcontractor who is gone. Mr. Harrington stopped producing concrete last Thursday and his business has closed at great loss to himself, his family and the excellent people who worked for him. They no longer have employment because he was not paid for supplying concrete at a critical time in his business.

Such cases should not be allowed to happen. Where did the money come from to build the school in question? It was provided by those who are working today, contributing to society and paying taxes. The contractor got his money and when the subcontractor was paid, he did not fulfil his obligations.

While I have great time for the Bill because it seeks to address a serious problem, I am concerned it does not go far enough. It is wrong to impose a threshold of €200,000. One contractor described the decision not to apply the provisions of the Bill to contracts for work valued at under €200,000 as problematic. Subcontractors could be penalised for not finishing a project, even if they have not been paid. I know of subcontractors who have moved overseas leaving many people high and dry. If the legislation is passed without amending the threshold, people will not be offered full protection. As far as I can discern, a subcontractor is protected where the contract is with the main contractor, whereas those who work for subcontractors remain extremely vulnerable. Those who supply plasterers and block layers with concrete, stone and tarmacadam and hardware shops that provide goods for building works are at the end of the money chain. When payment is not made, they are the first people to be left high and dry.

It is unfortunate that Mr. Harrington had to cease producing concrete last week. I am proud of every small business in my area. They started with nothing, paid their taxes and other charges, and, like others operating small businesses, were crippled under an avalanche of paperwork and regulations. Mr. Harrington employed people and worked hard. It is ridiculous and wrong that he has not been paid for work he did on a project funded by the State. It is the worst type of blackguardism in which anyone could engage. What protection will be in place for those who provide goods and services to subcontractors as opposed to the main contractor?

I will refer to another concern people have expressed. There is a major difference between being competitive and tough when trying to secure a job and being unrealistic. It is clear from the prices being charged for some jobs that the only way the project will be completed is if someone is not paid. Hard-pressed small businesses respond positively to requests to supply stone or concrete and live in hope of being paid. Unfortunately, payment is not made in many cases and I am concerned the Bill does not provide sufficient protection for smaller contractors. While these people may be sole contractors who hire extra help when required or an employer of one, two, five or ten staff, they form the backbone of the economy and need to be protected. I hope changes will be made to the €200,000 threshold.

On the issue of personal guarantees, I must declare an interest as I am one of the contractors who have been burned over the years. Personal guarantees have been shown to be worthless. I have had personal dealings with many people who have been left in an awful position as a result of being unable to collect the money they are owed for work they have done. Collecting what they are owed would keep their businesses solvent and allow them to overcome a hurdle until the next opportunity for work arises. Unfortunately, many of them will be unable to do so.

Are there irregularities in some of the relationships between main contractors and subcontractors? Is there an understanding in some cases that the subcontractor will be paid first and others down the line will be burned? Having studied the prices for jobs, I and others have concluded that something untoward is taking place. This issue should be closely monitored because if people are winning State contracts with the intention of not paying people at the bottom rung of the ladder, it is a serious issue for the Government. We must all be mindful of the possibility that this type of practice is taking place.

I compliment the Taoiseach on confirming on a number of occasions, most recently in the past week or ten days, that notwithstanding other business before the House, this important legislation will be passed before the summer recess. I commend the Government on treating the Bill with the urgency it deserves. There is no point talking about arbitration if those who owe the money have hightailed it and caught enough people out to make it worth their while to run away to another country to work. That is happening in many cases and it is impossible to bring them back for any process of arbitration, negotiation or mediation, with a view to settling outstanding debts because they are long gone. This issue must be dealt with.

I would like to raise the issue of those self-employed persons who, unfortunately, go out of business. Some provision will have to be made for social welfare assistance from the State. The people concerned have been gainfully employed for many years and often employed others. They were fully tax compliant and always did everything correctly and all of a sudden they find themselves without work and with no money coming in. Whatever savings they had have been spent. They still have a house to run and their families to rear, but they are unable to receive any welfare payment. In such cases, the people whom they employed are, thankfully, able to receive help from the State to live and look after their families, but those who employed them are not able to do so. Since coming into this House over one year ago, I have consistently demanded that some provision be made to speed up mechanisms of payment for persons with C2 tax clearance certificates, who were self-employed and are now unable to find work and fund themselves. All they want is assistance to keep them going. We have to put measures in place to ensure they can receive welfare payments. They paid enough taxes during the years and always did things correctly but now they find themselves left in the lurch which is an awful place to be.

Senator Feargal Quinn's work in bringing forward the Bill certainly shows that the Seanad is capable of doing excellent work. It is great to see a person of his calibre bringing forward a Bill in the first instance. Where I come from, we sometimes see people in that House acting as glorified news correspondents, relaying news about the work of local county councillors and other public representatives and regurgitating it.

See this speech in context