Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

The stated intention of the amendment is to recoup for the State the cost of welfare payments in cases where a person is unfairly dismissed. In principle, it seems like an attractive and appropriate course of action. However, if applied to unfair dismissal cases, the principal could give rise to unintended consequences which would not be in the interests of persons found to have been unfairly dismissed. Before going into detail, we should bear in mind that the amendment would represent a significant change in employment rights legislation which is the responsibility of the Minister for Jobs, Enterprise and Innovation. My officials are engaging with their counterparts in that Department in relation to this matter.

Since 2014, a system of recovering benefits in cases of personal injury is in place in my Department. If a person makes a successful insurance claim, we can recoup some of the money for taxpayers. We get approximately €20 million a year back on that basis where an insurance payment goes to us rather than to the person who has already been compensated. On the face of it, it might be argued that a similar arrangement could readily be put in place in the case of unfair dismissal, but it is important to recognise the crucial difference between these two situations. In determining the level of a personal injury award, it has always been the case that it can be reduced by the amount of certain welfare payments received by the injured party.

In practical terms, the compensation paid to the injured party is reduced to reflect the social welfare payments he or she has received.

By contrast, in compensation awards for unfair dismissal, the governing legislation, section 6(c) of the Unfair Dismissals (Amendment) Act 1993, provides that welfare payments are explicitly disregarded in the calculation of financial loss. This ensures that the receipt of a welfare payment does not diminish the compensation paid to the person who has been unfairly dismissed. If the legal position was changed to provide for the recoupment of the cost of social welfare payments arising from an unfair dismissal, then it would follow that these costs should be included in the original compensation award.

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