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

The principle of double compensation, namely that a person is not compensated twice in respect of the same injury, must be central to our thinking in this matter. The current arrangements draw a clear distinction between compensation properly due in respect of unfair dismissal on the one hand and social welfare payments to meet income support on the other. If we were to change that position and provide that the social welfare payments form part of the compensation to be paid by the employer, the level of compensation awarded to the person found to have been unfairly dismissed would be reduced to take into account the cost of those welfare payments. The effect would be to reduce or, in many cases, eliminate the compensation element of the award.

Where an employee is unfairly dismissed, a range of redress is available. Sometimes the person is reinstated or re-engaged in his or her job, receives financial compensation to a maximum of two years where financial loss has been sustained or financial compensation to a maximum of four weeks where no financial loss has been sustained. The scale of compensation awarded varies depending on the circumstances of the individual case taking into account, for instance, the question of where the responsibility for the dismissal lay, the measures taken to reduce financial loss and the extent to which negotiated dismissal procedures were followed.

In 2014, 282 people were awarded compensation as a consequence of unfair dismissal. The amount of the award was less than €1,000 in 16 cases. It was between €2,000 and €5,000 in 55 cases, between €5,000 and €10,000 in 52 cases and between €10,000 and €20,000 in 78 cases. In 81 cases, the award was above €20,000.

By way of illustration, a single person in receipt of jobseeker’s payment for one year would receive some €10,000 from my Department. In almost half of all cases determined in 2014, the welfare cost would be greater than the compensation award. If the period of welfare payments extended to two years or included increases in respect of a qualified adult and children, then the welfare cost could be of the order of €20,000. We can surmise that in roughly three quarters of cases, the amount paid in welfare exceeds the award. I presume in these cases, the award would be paid directly to the Department of Social Protection rather than the individual concerned. That is the way we would recoup the cost. We would get the money from the Workplace Relations Commission, WRC, rather than the person who took the case.

The proposed amendment suggests that welfare payments should be recouped from those paid between the date of the dismissal and the date on which the findings are made. However, the time period could be heavily influenced by the time taken to adjudicate on a claim rather than the actual award. In cases where it takes a long period of time for a determination to be reached, employers could end up paying compensation for administrative or other delays outside of their control rather than the financial loss suffered by the person concerned.

The amendment also refers to social welfare payments which would encompass welfare benefits that could not reasonably or with certainty be linked with unfair dismissal, such as illness, lone parenthood, old age or caring responsibilities. The recovery of benefit legislation in regard to personal injuries is limited to six specified illness payments for this reason.

It is unclear at this stage whether the returns from this exercise would justify the administrative costs involved. The total amount awarded for unfair dismissals in 2014 was less than €5 million. It is not possible to estimate how much was paid out in welfare benefits to those to whom awards were made. The administrative burden on the Department to recover the cost of welfare payments from employers would have to be considered in terms of whether there would be any net benefit to the Exchequer or how significant it would be.

I can appreciate why this proposal has been advanced and I accept fully that it merits proper consideration. However, it would be unwise to alter substantially the landscape of employment rights legislation without having the input of my colleague, the Minister for Jobs, Enterprise and Innovation, who has responsibility for this area. What is being proposed could give rise to significant additional costs to employers and businesses which could lead to the loss of employment and the closure of businesses. It could also inadvertently serve to disimprove the position of the person found to have been unfairly dismissed if it turns out that his or her entire compensation award is recouped by the Department.

I would be happy to have my Department undertake a fuller analysis of the issues involved in conjunction with the Department of Jobs, Enterprise and Innovation and to revert to the Oireachtas joint committee with the results of that analysis as part of the pre-legislative scrutiny for the spring Bill. In the interim, I am not in a position to accept the amendment and I would ask that it be withdrawn at this time.

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