Thursday, 26 April 2007
Protection of Employment (Exceptional Collective Redundancies and Related Matters) Bill 2007 [Seanad]: Committee and Remaining Stages
I move amendment No. 1:
In page 5, subsection (1), lines 34 to 36, to delete "Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007" and substitute the following:
"Protection of Employment (Collective Redundancies) (Amendment) Act 2007".
The amendment merely changes the Short Title of the Bill from something extremely unwieldy to something that is both simpler and sufficiently descriptive. It is a tidying up exercise. I have been briefed by the departmental officials, for which I am grateful. While I am not making a major issue of it, I would like to hear the comments of the Minister of State.
The Parliamentary Counsel suggested the existing Title at drafting stage. The main purpose of the Bill is to deal with exceptional collective redundancies. The Protection of Employment Act 1977 covers collective redundancy situations involving specific numbers of workers. However, the Bill makes new provisions, including the establishment of the redundancy panel, and as such is not just amending previous collective redundancy legislation. In those circumstances it is a different Bill and there is a strong case for having the Title as it stands.
I move amendment No. 2:
In page 6, between lines 15 and 16, to insert the following:
""employee representatives" has the same meaning as in section 2(1) of the Protection of Employment Act 1977;".
I am advised that this amendment clarifies that the definition as given in the Protection of Employment Act 1977 is the definition that is applicable. This is in line with what was agreed in section 18.3(a) of Towards 2016.
I move amendment No. 4:
In page 6, subsection (2), line 39, after "period" where it firstly occurs to insert "or periods".
This is a technical amendment to clarify the meaning of subsection (2). Perhaps the Minister of State would like to comment on what impact that will have on the section.
I am grateful to Deputy Hogan for moving the amendment. Even though, on balance, it is probably unnecessary, I am disposed to accepting it because it clears up slight confusion about whether the Minister can extend the panel for periods of three years. It seems clear enough, as drafted, but I am disposed to accepting the amendment.
I move amendment No. 5:
In page 6, subsection (2)(a), line 41, before "both" to insert "both Houses of the Oireachtas or".
Deputy Quinn and I have tabled a number of amendments which are intended to give certainty to the role of the Houses of the Oireachtas in this area and to give them a say in changes that might be required. When orders are made to give effect to these changes, they should be placed before both Houses.
Towards 2016 provides that the redundancy panel will be extended by order of the Minister following consultation with both IBEC and ICTU. It was not agreed to extend the consultation process to include the Houses of the Oireachtas or Chambers Ireland and, for that reason, I do not propose to accept the amendment. However, I acknowledge the issue raised by the Deputy, particularly in regard to the Houses of the Oireachtas. The Minister of the day will make an order which will be laid before the Houses in any event. This is, therefore, covered and under the Constitution the Minister is answerable to the Oireachtas.
I move amendment No. 9:
In page 6, subsection (2)(a), line 42, to delete "requested" and substitute "not objected to".
This amendment in the name of Deputy Quinn seeks to give more certainty to the role of both IBEC and ICTU so that they can object to the three-year duration and that approval from them would be sought by the Minister before he or she would make changes. Deputy Quinn seeks a greater role for both organisations in changes that are made, particularly in regard to the three-year period, which is enshrined in the legislation. It is unusual for a period to be laid down in legislation, as this is usually done through regulation. The approval of IBEC and ICTU should be required for an extension of this period.
Deputy Quinn seeks to substitute "not objected to" with "requested" where the Minister seeks to continue with the panel. I am disposed to adhering to Towards 2016, under which it was agreed to extend the duration of the panel where IBEC and ICTU make such a request. We would all prefer if the panel operated successfully and both the employers and trade unions were of the view that it was sufficiently worthy to be maintained so that they could make such a request. That should be the experience and I do not propose to accept the amendment.
I move amendment No. 10:
In page 7, before section 4 but in Part 2, to insert the following new section:
"4.â(1) For the purpose of this Act, "collective redundancies" means dismissals which are effected for a reason specified in subsection (2) (other than a reason related to the individual employees dismissed) where in any period of 30 consecutive days the number of such dismissals isâ
(a) at least 5 in an establishment normally employing more than 20 and fewer than 50 employees,
(b) at least 10 in an establishment normally employing at least 50 but fewer than 100 employees,
(c) at least 10 per cent of the number of employees in an establishment normally employing at least 100 but fewer than 300 employees, and
(d) at least 30 in an establishment normally employing 300 or more employees.
(2) The reasons referred to in subsection (1) areâ
(a) that the employer concerned has ceased, or intends to cease, to carry on the business for the purposes of which the employees concerned were employed by him, or has ceased or intends to cease, to carry on that business in the place where those employees were so employed,
(b) that the requirements of the business for employees to carry out work of a particular kind in the place where the employees concerned were so employed have ceased or diminished or are expected to cease or diminish,
(c) that the employer concerned has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employees concerned had been employed (or had been doing before their dismissal) to be done by other employees or otherwise,
(d) that the employer concerned has decided that the work for which the employees concerned had been employed (or had been doing before their dismissal) should henceforward be done in a different manner far which those employees are not sufficiently qualified or trained,
(e) that the employer concerned has decided that the work for which the employees concerned had been employed (or had been doing before their dismissal) should henceforward be done by persons who are also capable of doing other work for which those employees are not sufficiently qualified or trained.
(3) (a) In this section "establishment" meansâ
(i) where an employer carries on business at a particular location, that location, or
(ii) where an employer carries on business at more than one location, each such location.
(b) For the purposes of the definition in paragraph (a) of this subsection, each workplace, factory, mine, quarry, dockyard, wharf, quay, warehouse, building site, engineering construction site, electricity station, gas works, water works, sewage disposal works, office, wholesale or retail shop, hotel, restaurant, cafÃ©, farm, garden or forest plantation shall be taken to be a separate location.
(c) In ascertaining for the purposes of this section the total number of employees employed in an establishment, account shall be taken of those employees who are based at the establishment but who also perform some of their duties elsewhere.
(d) The Minister may, for the purpose of extending the provisions of this section by order amend paragraph (a), (b) or (c) of this subsection and may by order amend or revoke such an order.
(4) For the purposes of this section, "business" includes a trade, industry, profession or undertaking, or any activity carried on by a person or body of persons, whether corporate or unincorporate, or by a public or local authority or a Department of State, and the performance of its functions by a public or local authority or a Department of State.".
The amendment would transpose the definition of "collective redundancies" into the Bill, which contains many technicalities that require careful and comprehensive study, given the number of Acts and statutory instruments that comprise labour law. We should aim to consolidate all this legislation and the amendment seeks to do this. Rather than forcing somebody to seek out the definition of "collective redundancies", I propose that it be included seriatim in the legislation. This would replace the current section 4.
The Bill deals with exceptional collective redundancies and requires a definition of same. The proposed amendment contains a definition provided under section 6 of the Protection of Employment Act 1977. I am advised the amendment is, therefore, unnecessary and I do not propose to accept it. It also includes current text from that section and old text which is no longer current and which was repealed by Article 5 of the Protection of Employment Order 1996. It is, therefore, not in order to accept the amendment for that reason.
I am advised the amendment is legally unnecessary but, similar to amendment No. 4, I am disposed to accepting it because this issue is commonly encountered in legislation.
I move amendment No. 12:
In page 7, lines 19 to 22, to delete subsection (2) and substitute the following:
"(2) For the avoidance of doubt, it is declared that this Part does not apply toâ
(a) the employment of agency workers for temporary or recurring business needs, or
(b) the use of outsourcing, contracting-out or other forms of business restructuring,
in circumstances other than those referred to in section 7(2A) of the Redundancy Payments Act 1967.".
The amendment is intended to reflect the text agreed in paragraph 18.3 of Towards 2016. ICTU had concerns about the original text and this is a great improvement as it reflects exactly what was agreed.
I move amendment No. 13:
In page 7, subsection (1), line 23, after "a" to insert the following:
"body to be known as PainÃ©al IomarcaÃochta or in the English language, as the".
This is a linguistic amendment. Whether the Minister of State is disposed to take it, it attempts to give balance to the two official languages of the State.
When the Bill is translated, the Irish title of the redundancy panel will be included. The proposed change to the panel's name would entail significant changes to the Bill and necessitate the production of a new stock copy of the Bill by the Attorney General's office. It is intended to proceed quickly to the Seanad with the Bill as amended by the House, but the acceptance of the amendment would delay that. The amendment is unnecessary, as the name will feature in the Irish text.
Will the Irish language version be incorporated into the title in the publication of official documentation in respect of the body's role or is that presumption unnecessary, as the Official Languages Acts cover the matter?
I move amendment No. 14:
In page 7, subsection (1), line 24, after "Panel" to insert the following:
"which shall be independent in the operation of its functions and which shall have an independent secretariat".
This amendment was tabled for the purpose of having the redundancy panel established on an independent basis similar to the Labour Inspectorate. Perhaps the amendment is unnecessary, but I look forward to the Minister of State's reply.
We have been advised that it is unlikely that there will be enough work to justify an independent secretariat. For the time being, the Department will provide the secretariat for the panel.
I move amendment No. 15:
In page 7, subsection (4)(a), line 42, to delete ", not exceeding 3 years,".
This amendment proposes not to apply a limit of three years because I do not see why a person's term of office should be limited to three years. In fact, it should not be limited at all and the Minister should appoint the person for a fixed term of his or her choosing. Will the Minister of State enlighten the House as to why the figure of three years has been selected?
The figure was selected in accordance with the three-year term of the body. In the event of the Minister being requested to re-establish the panel, there is a provision for a previous member to serve a further term.
I move amendment No. 16:
In page 9, lines 4 to 15, to delete subsection (1) and substitute the following:
"6.â(1) A proposal to create collective redundancies may be referred to the Redundancy Panelâ
(a) by employee representatives acting with the approval of the majority of those whom they represent who are affected by the redundancy proposal at any time during the period of 30 days, or
(b) by the employer concerned at any time during the period of 40 days,
referred to in section 9 or 12 of the Protection of Employment Act 1977 (as the case requires), by notice in writing addressed to the Chairman of the Panel in the care of the Secretary General and sent or delivered to the Secretary General at the principal office of the Department of Enterprise, Trade and Employment.".
This amendment changes subsection (1) by allowing for an extension of ten days to 40 days for an employer concerned in a case where no representatives have been appointed. This would have the dual effect of allowing the employer to consider whether the employees will make a referral and to prepare a proposal if they do not. The time limits in this part of the Bill should be examined so that people are given the best opportunity to consider these matters carefully before triggering this section's necessary effect. I would be grateful to hear the Minister of State's opinion on this matter.
It is always difficult to argue the merits of one time span against another, particularly if the difference is relatively short. The term of 30 days in which to deal with these matters is reasonable. If the House gives the message that a longer period is necessary, I would be concerned about the employer or anyone involved being given the opportunity to delay a matter that should be dealt with urgently. For this reason, I am not prepared to accept the amendment.
I move amendment No. 17:
In page 10, subsection (3)(b), to delete lines 10 and 11.
If a small group representing two or three people who are not aligned with any trade union decided to embark on unauthorised or unofficial industrial action, the subsection could have the effect of debarring all of the employees from accessing the panel. I look forward to the Minister of State's comments, as I wonder whether he adjudges the situation similarly.
Amendment No. 18 is similar and relates to the statement in the Bill that "no industrial action, on the part of that party, is current.". Why should the court be prohibited from making a ruling on legitimate industrial action? The paragraph is unnecessary.
Amendment No. 19 is an attempt to make the legislation more explicit, as there may be industrial action elsewhere. The amendment suggests changing the provision to read "no industrial action relevant to the dispute is current". It is a belt and braces attempt at an amendment.
The Deputies' points are somewhat similar. It is clear that the action taken in the example cited by Deputy Morgan, that of a group of workers not associated with the relevant action, would not impact on the situation.
If I understand Deputy Quinn correctly, his amendment tries to introduce a similar additional guarantee, but I am advised that both amendments are unnecessary because it is clear that only the parties to the dispute are affected by the section's provisions. Is the point of amendment No. 18 the same?
I move amendment No. 22:
In page 12, lines 7 to 12, to delete subsection (2).
The subsection is an explicit provision and, when we examined it, we wondered why it was being included in this manner. I would prefer to have it deleted. Will the Minister of State elaborate on the thinking behind the matter?
Like Deputy Quinn, I was not present when this element was discussed, but Deputies on all sides will remember the discussion during the dispute that gave rise to this legislation and know of the income tax relief difficulties that might arise for employees who become redundant. A safeguard to the benefit of workers would be lost were the provision changed.
I move amendment No. 23:
In page 12, line 20, after "payment" to insert "by the employer".
This is a technical amendment to section 9(3)(a) of the Bill, which provides for a substitute provision for section 7(1)(c) of the Unfair Dismissals Act 1977 relating to enhanced compensation, in which an employee takes a successful unfair dismissals case following the issuing of a Labour Court opinion that the dismissal was one of a number of dismissals included in an exceptional collective redundancy situation. This amendment clarifies that it is the employer who is responsible for payment of any enhanced compensation awarded under the amended section 7(1) of the Unfair Dismissals Act 1977. While this is the position at present under the Act, it required clarification in this instance.
The amendment is also necessary to provide that the concluding phrase of section 7(1) of the Unfair Dismissals Act 1977 would also apply to the enhanced compensation provision in the amended section 7(1)(c) of that Act in the same way that applies currently to compensation provisions under that Act. This concluding phrase provides that where there is a reference to the word "employer" in the provisions on redress for unfair dismissal, these references will be understood to be references to the new owner in a change of ownership scenario. This is the reason the amendment is necessary.
I note the Leas-Cheann Comhairle ruled out of order a couple of amendments and I accept the ruling. However, I wish to make some observations on the section. I tabled the amendments in question in respect of an issue regarding Castlemahon Food Products Limited, which is in liquidation. A provisional liquidator was appointed on 26 September 2006 and the parent company was located in County Antrim. In May 2005, the workforce agreed to a restructuring plan covering a range of changes that included 150 redundancies at five weeks' pay for each year of service, inclusive of statutory entitlements. When the company went into liquidation in December 2006 with the loss of more than 300 jobs, the workers only received statutory redundancy for each year of service and the redundancy cost to the O'Kane group was nil.
Obviously, the group of workers who remained loyal to the company over the years felt completely let down. Many of the workforce had given up to 22 years of loyal service. As this is a liquidation process and the State is a preferential creditor, it is therefore entitled to a 40% rebate on the liquidation of the assets. The thrust of the amendments I tabled to this section was that when the liquidation process is involved and when only statutory redundancy is paid, this 40% rebate should be redistributed among the workforce. That was the basis on which I was trying to articulate the points regarding this section. The Minister of State should be able to give some information to Members as to how such legitimate concerns about a company that ceases trading under the insolvency legislation could be met. I refer to this case and others in which loyal workers should not have been deprived of their entitlements to such an extent.
I also express my disappointment that the Minister of State was not in a position to deal with this issue. I have met the Castlemahon workers numerous times through their union, as well as individually and collectively. They have had a highly traumatic experience after many years of loyal service to the company and have been made redundant. While the previous tranche of redundancies allowed for five weeks' pay for each year of service, those who did not opt for it now find themselves receiving statutory redundancy only.
The Government had an opportunity to return 40% of what the State recouped to the workers. The State faces lower costs in respect of redundancies when there is a liquidation and it would have been only fair to offer some form of compensation to those who are deeply traumatised in an area where there have been many job losses. Kantoher closed the previous year and was followed by Castlemahon. The opportunities for employment in the locality are extremely limited. While some of those who were made redundant have secured alternative employment, the majority have not and are finding it extremely difficult to adjust and to provide for their families. In some cases, husbands and wives have been made redundant together. I am disappointed the Minister of State was not in a position to give some recompense to the workers who were made redundant. Perhaps he will re-examine the issue at a later stage.
I ask the Minister of State to address the broader issue. Perhaps this can be done in the context of the consolidation of labour legislation, on which work has commenced in his Department. I believe he is familiar with what has happened both in west Limerick and at Comerama, which has been discussed in this House. The net issue concerns a group of workers who co-operate in the restructuring of a company, which will be the feature of Irish industrial relations as we adjust to international globalised competition. I refer to the scenario in which although some workers take early redundancy in good faith with enhanced extra-statutory provision, within a short period of time the restructuring effectively does not work for whatever reason. In the case of the Castlemahon factory, there is some suspicion this is rather opportunistic on behalf of the plant's owners or perhaps its primary customer.
Either way, this pertains to a group of workers who sat down with their partners over the kitchen table in the evening to decide whether to stay or to go, to take the enhanced lump sum or to continue working. Such workers make a strategic decision in all good faith and do so at the behest of and following the leadership of their union. This is an essential part of social partnership, which is something that employers frequently disregard. Such leadership is difficult to deliver because given the choices facing an individual worker with limited alternative employment prospects, he or she may well decide to continue working. However, when such people continue to work, through no fault of their own and notwithstanding enhanced and changed working practices, within a period of time a decision is taken over which they have no control. Consequently, because such people are back out in the middle of the pitch, so to speak, less than 12 months after the redundancy voluntary package was offered, they end up with just the minimum statutory entitlements.
This is not impossible to fix, although I do not suggest that it will be fixed in this legislation. The issue is more complex and I understand the political constraints within which the framework of this legislation has been drafted. However, this has been dome previously, many years ago, in respect of the insolvency legislation, whereby workers were left at the end of the queue of creditors when a company became insolvent. They were obliged to take their place after a host of creditors and in some cases ended up getting very little â in terms of a percentage in the euro â of what they would have been entitled to. On foot of an EU directive, the insolvency legislation gave them priority status together with the Revenue Commissioners and others such as banks and debenture bondholders.
While this will fall to the next Administration, in the context of social partnership I invite the Minister of State's colleagues in the Department of Enterprise, Trade and Employment to begin to review the position in this regard. We are not obliged to wait for a European directive on this matter. The funding of such an enhanced package would come from the redundancy and insolvency fund and would not necessarily be a charge on the plant. That is what the insolvency and redundancy fund is and if Members have been informed correctly by the Government and the Department of Finance, it is in substantial credit at present.
Some mechanism must be found whereby if a voluntary redundancy package in lieu of, or in return for, a reduction in labour costs and perhaps enhanced work practices with greater efficiency has been availed of within a period of time of a certain number of months or years and a company subsequently goes into liquidation, the terms and conditions of that voluntary package would apply to the residual workers who found themselves confronted with this scenario, having made the choice between taking the lump sum and going, or alternatively, taking the exhortations of the company and others to make a final attempt to see whether it could be made viable. If such a sense of justice is not achieved, the Minister of State has confronted the Comerama workers and knows exactly the sentiment that informs this issue. He knows what Mr. Kelly, the regional secretary for the Amalgamated Transport and General Workers' Union has been confronted with in west Limerick. Indeed, my colleague Deputy O'Shea, who represents Waterford, has brought this problem to my attention. There is no legislative mechanism in place at present to deal with it.
We need to examine how we can maintain the co-operation and collaboration that has been delivered by social partnership in difficult times, for example against the background of the adversarial confrontation that existed in the past. There is a need for change and adjustment in the globalised world economy. If people agree to take a lump sum or accept adjusted work practices but it does not work out, we need to ensure they can feel secure. If their next-door neighbours or brothers have been given statutory payments equivalent to four, five or six weeks' wages for every year of service, they should not fall through the net and have to avail of the minimum statutory payments. Not only can a person take a financial hit on foot of the significant difference between the sums paid in such circumstances, but he or she can also develop a sense of grievance that can sour his or her sense of justice in the workplace and his or her sense of how such justice is obtained. That is not good for us as we move through the early decades of this century. We need to show solidarity with people who have to make choices of that nature.
The attempt Deputy Hogan made to make a suitable provision in this regard has been ruled out of order. I do not dispute that decision. If an offer that is made in this House is ruled out of order on a technicality, that does not invalidate its legitimacy or the intention behind it. I ask the Minister of State, Deputy Killeen, and the Department of Enterprise, Trade and Employment to take note of Deputy Hogan's proposal. I do not think it will be possible to introduce a simple consolidated Bill in the House in the traditional manner. It seems to me that a new labour relations Bill will be required. If I have any hand or part in that process, I will try to make some other changes as well. I do not think such a Bill should be drafted outside the House by the social partners â while they should have a big input, they should not have a veto or a monopoly. Decisions on such matters are to be made on another day and perhaps by another Administration.
I ask the Minister of State to take on board the points I have made. I am sure there are many other individual cases, like the Comerama and Castlemahon cases, with which we are not familiar. Such cases are sufficiently significant to warrant the putting down of a marker and the addressing of the issue. If we fail to do so, we will make it more difficult to obtain future social partnership agreements.
Like Members on all sides of the House, I am familiar with the Castlemahon and Comerama cases. While the principles in those cases are somewhat different, I do not doubt that the effect of the cases, as Deputies Quinn, Hogan and Neville have suggested, has been to undermine people's confidence in the redundancy process somewhat. Many people have expressed their disagreement with the process used to deal with them because they have first-hand experience of the anguish it can cause. It is difficult to deal with this problem. If amendments Nos. 20 and 21 had been in order and could have been accepted, they would not have achieved precisely what Members on all sides would like to achieve in this instance.
I am familiar with the example that was cited by Deputy Neville in the Castlemahon case. Those affected in that instance have a huge sense of injustice. Workers who are affected by restructuring have to face real questions, as Deputy Quinn mentioned. Such cases arise quite frequently. People make decisions on the basis of their family circumstances and their belief in their capacity to obtain alternative employment, etc. We are familiar with examples of restructuring not working out. It is immaterial, in some respects, whether one believes that it simply did not work out, or that another agenda was at play. Most of the workers in Castlemahon believe the latter to have been the case. Those who are made redundant as a result of insolvency or other factors are put at a disadvantage within a short period of time.
Difficult decisions will have to be taken when somebody takes action like that exhorted by Deputy Quinn. I think such action must be provided for in some way when a raft of new legislation is introduced in this area. Perhaps the easiest decision to take in legislation is to increase the level of statutory redundancy â such a decision was taken in 2003. That approach is absolute and has some advantages, but it does not address some of the difficulties which arise here. We have no idea what the proceeds of the liquidation in the Castlemahon case, for example, will be. While they may be substantial in that instance, there could well be a case in which such proceeds amount to nothing. It is quite difficult to put in place a rule that can be applied in all cases. As many workers get their redundancy payments directly from the social insurance fund, they get such payments at the statutory rate only. The circumstances which applied at Castlemahon do not apply in many cases. Employers sometimes cease trading without going into liquidation.
There is nothing to chase in such circumstances. In many instances, workers are equally at a disadvantage because they are unable to negotiate more than the statutory level. There is a strong argument, in many respects, for directing a great deal of attention at the level of actual statutory redundancy. It is worth trying to devise a formula to apply to cases like Comerama and Castlemahon. While those two cases are quite different in some respects, they are both examples of cases which cause the affected workers to feel a strong sense of injustice.
The Comerama workers have left me in no doubt that they believe they made their decisions on foot of a particular outcome which ultimately could not be delivered. They believe they would not have made that decision if they were not in a position in which they had to make it on that basis. Many of the Castlemahon workers believe that if they had been given information that was made available at the time of the initial restructuring, they may have been prompted to accept the enhanced redundancy offer at an earlier stage. That is one of the difficulties that is thrown up by cases of this nature. I cannot predict how such difficulties can be dealt with in the context of new legislation. I will take on board a point that has been made by all Deputies, which is that every effort should be made to address this issue and to come up with a formula, even if is a fairly complex formula that tries to address each of those quite different cases. Such a formula cannot be included in this legislation.
While I accept that this legislation arises from the social partnership agreement, Towards 2016, I suggest that we should also address a separate set of circumstances. I understand that the Department of Enterprise, Trade and Employment is considering amending the insolvency Acts to cater for the cases under discussion. Perhaps the Minister of State will indicate how much progress has been made with that work. Is it likely that priority will be given to this issue between now and the end of the year?
Deputy Quinn highlighted one of the key decisions that will have to be made by my successor in this office. He or she will have to decide whether to consolidate the existing legislation, or to incorporate in the consolidating legislation two or three Bills that are promised in Towards 2016 and relate to issues of this nature which are crying out to be addressed in a much more proactive and detailed fashion. If I were in that position, I think I would try to meet the Towards 2016 commitments, at a minimum, and also to deal with a few cases of this nature which have thrown up examples of what most people would consider to be injustice. I would try to address such cases in the consolidating legislation. I suppose there will be a temptation for the Minister of the day to consolidate what is already in existence and to deal with other issues separately. I do not have the answer to this problem.
I move amendment No. 24:
In page 13, lines 13 to 18, to delete subsection (3) and substitute the following:
"(3) An employer who effects a dismissal in pursuance of a proposal for collective redundancies before the expiration of such of the periods specified in subsection (1) and in sections 9(3) and 12(1) of the Protection of Employment Act 1977 as are applicable is guilty of an offence and liable on conviction on indictment to a fine not exceeding â¬250,000 per individual dismissal.".
This amendment seeks to address a concern that I highlighted on Second and Committee Stages, which is that the maximum fine of â¬250,000 is paltry. I am conscious that it may seem a little bizarre for someone of my means to say that â¬250,000 is paltry, but I will contextualise that remark. We have been told by Irish Ferries that the entire redundancy package in that case, which applied to several hundred workers, cost the parent company â¬29.1 million. Similar circumstances could arise involving companies with more than 1,000 employees.
Section 10(3) states that an employer in the circumstances described would be liable on conviction to a fine not exceeding â¬250,000. It would be of little concern to a major company to pay a fine of that level to save several million euro. That is why my amendment proposes that the fine of â¬250,000 be applicable for each individual dismissal. The amendment contextualises the penalty.
I do not propose a mandatory fine of â¬250,000 per dismissal. The amendment proposes a maximum fine of that amount, allowing flexibility in the imposition of the fine.
Amendment No. 25 is related to Deputy Morgan's amendment. We have seen maximum fines devalued over time, either by inflation or by the rise in the level of profit an organisation can make. The Minister of State is familiar with health and safety legislation in, for example, the construction sector. Fines imposed by that legislation create little or no deterrence against malpractice by rogue contractors and employers. My amendment would extend the maximum fine to a total of â¬250,000 per employee affected. If ten employees were affected by a rogue action, such as is set out in section 10(3), the maximum fine imposed would be â¬2.5 million. It would be left to the discretion of the court to decide how much to fine an individual employer in those circumstances. My amendment would transform the deterrence factor significantly.
It will be a long time before the House revisits this matter. The court will decide whether the fine is applied up to the maximum. My amendment would give the courts a degree of flexibility to ensure that the deterrence implicit in this subsection has teeth. I invite the Minister to consider accepting these amendments.
The proposed fine of â¬250,000 is a 20-fold increase on the previous one. An employer who falls foul of this legislation will have to contend with many other monetary problems. For example, the employees will be likely to receive payments of up to five years' salary. That provision will impose a huge monetary penalty. In view of our discussion on section 9, I believe payments made by an employer would be better directed to the employees.
The increase in the fine is substantial and sets out the seriousness with which the social partners, the Government and this House views offences under this legislation. I understand the points made by Deputies Morgan and Quinn. They would be echoed by many Members on all sides of the House. In the case of exceptional collective redundancies it is important that the message of the legislation be reflected in the substantial increase in the fine and in the fact that redress for employees is paramount. That point is well dealt with in the Bill and I am not disposed to accept the amendments.
I appreciate the point made by the Minister of State that provisions elsewhere in the Bill would make financial provision for employees. Nevertheless, we need to send a clear message to rogue employers and to equip the courts with the means to sanction huge companies that might abuse the system and their employees. A fine of â¬250,000 would not be significant to a large company with, perhaps, 1,000 employees. Cheaper labour continues to be sought by companies and the race to the bottom is ongoing. In those circumstances it is necessary to consider a substantially greater fine. A fine of â¬250,000 would be considered paltry by many large or even medium sized companies. My amendment would impose a fine of â¬2.5 million for the dismissal of ten employees. Even that amount is a pittance compared to the profits made by some companies. Irish Ferries made severance payments of â¬29.1 million. Such a company would laugh at a court that imposed a fine of â¬250,000.
It is important to remember that the increased fine would be imposed in the case of a collective redundancy where the dismissals occur before the expiry of the 30-day period. That may not be the most important issue. There are very good reasons, separate from the fine, that an employer should go beyond that period in any event. The increase in the fine is substantial. Even in cases such as those referred to by Deputy Morgan an employer would take some notice of the fact that he would be liable for such a fine and all the other attendant costs. The purpose of the legislation is to address the rights of employees and to give employees the best provision in these circumstances. That purpose is reasonably achieved within the provisions of the Bill.
I move amendment No. 26:
In page 14, line 38, after "State," to insert the following:
"(except where the employer has an existing operation with established terms and conditions)".
The amendment will facilitate a company with established operations in different locations which may need to restructure, to move part of its operation to another existing location within the country and with existing terms and conditions. Without this amendment that would not be possible.
This amendment would facilitate compulsory transfers. For example, a Dublin based company with a branch in Limerick could instruct Dublin based employees to move to Limerick. That would be tantamount to a compulsory transfer. Perhaps the Minister will address that concern.
That would not be the case. The difficulty that would arise if we did not have this provision is that companies would find themselves unable to restructure in Ireland, effectively being forced abroad. In the case of the employees cited in the Deputy's example, it would leave them worse off as they would have no alternative to redundancy. It was never intended that exceptional collective redundancies arising where an employer has more than one site, for example, one in the midlands and one elsewhere, should prevent a company from restructuring in Ireland. That is only in the context of the existing operation in the second location already having established terms and conditions.
I move amendment No. 27:
In page 18, to delete line 5 and substitute the following:
""(2A) Without prejudice to the applicability of any of the provisions of section 6 to the case, whereââ".
This amendment provides that, to avoid doubt, the applicability of the provisions of section 6 of the Unfair Dismissals Act 1977 to the type of dismissal described in the new section 5(2A) of that Act is not affected. In other words, the application of section 6 to situations where all the employees involved in a strike or industrial dispute are dismissed is not affected. Section 6 of the Unfair Dismissals Act 1977 provides that, generally, a dismissal shall be deemed to be unfair unless an employer can prove that it was justified by substantial grounds. Section 6 also outlines certain criteria on which dismissals may be adjudicated as either fair or unfair. In addition, section 6 of the Act describes certain dismissals that are automatically deemed unfair. For the purposes of clarity, that must also be included in this legislation.
I move amendment No. 28:
In page 18, to delete lines 14 to 16 and substitute the following:
"in determining whether, in those circumstances, the dismissal is an unfair dismissal, the rights commissioner, the Tribunal or the Circuit Court, as the case may be, shall have regard, for that purpose only, toâ".
This covers a somewhat similar situation. The amendment clarifies that the specific criteria listed in paragraphs (i) to (iv) of the new section 5(2A) of the Unfair Dismissals Act 1977, on which the fairness or otherwise of the dismissals is to be adjudicated, apply only to the types of dismissals described in the new section 5(2A), that is, situations where all the employees involved in a strike or industrial dispute are dismissed.
I thank the Leas-Cheann Comhairle and the Members opposite for co-operating with this legislation. I pay tribute to the social partners for the work they put in. Some very important points were raised. The issue brought up by Deputy Morgan regarding the level of penalties will undoubtedly be addressed in the forthcoming employment rights legislation and a whole raft of legislation to which Deputy Quinn referred. This very important Bill illustrates that the social partners, on one level, and the Oireachtas, on another, are able to address issues such as those that arose in the Irish Ferries case. In particular, I thank the departmental officials for the work they put into preparing the Bill and wish colleagues the best of luck in the coming weeks.