Dáil debates

Thursday, 12 November 2009

3:00 pm

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

Question 3: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the reason for the differential between the redundancy figures and the live register figures; and if she will make a statement on the matter. [41135/09]

Photo of Conor LenihanConor Lenihan (Dublin South West, Fianna Fail)
Link to this: Individually | In context

The redundancy payment scheme, which is administered by the Department of Enterprise, Trade and Employment on behalf of the Department of Social and Family Affairs, makes payments in respect of eligible employees who qualify for statutory redundancy entitlement. Redundancy payments are paid from the social insurance fund. Under the scheme, all eligible employees are entitled to a statutory redundancy lump sum payment on being made redundant. Generally, a redundancy situation arises when an employee's job no longer exists and he or she is not replaced. To qualify for redundancy, the employee must have at least two years, or 104 weeks, of continuous service; the employee must be in employment which is insurable under the Social Welfare Acts; full-time employees must be in employment which is insurable for all benefits under the Social Welfare Acts but this does not apply to part-time employees; the employee must be 16 years or older; and the employee must have been made redundant as a result of a genuine redundancy situation. The redundancy payment statistics compiled by my Department measure the number of people in employment with a minimum of two years of continuous service, who meet the other criteria I have mentioned in order to obtain redundancy entitlements. By definition, this excludes people in employment who do not qualify under the terms of the redundancy payments.

It should be noted that the live register is not designed to measure unemployment. It includes part-time, seasonal and casual workers who are entitled to unemployment benefit. At the end of October 2009, there were 412,400 people on the live register claiming unemployment benefits, some 7,440, or 1.8%, fewer than in September 2009. The live register is 161,700, or 64.5%, higher than it was this time last year. The year-on-year increase, measured from October 2008 to October 2009, is continuing to decline from a peak of 197,800 recorded in June 2009. The seasonally adjusted figure for October is 422,500, which is a monthly decrease of 3,000 from September. As the Deputy may know, the quarterly household survey that is collated and published by the Central Statistics Office measures employment and unemployment. According to the most recent survey, some 264,600 people were unemployed in the second quarter of 2009, which was an increase of 137,900, or 109%, on the corresponding period in the previous year. The Government continues to support jobs through the enterprise stabilisation and job subsidy schemes. It has doubled the number training and work experience places that are available to over 13,000 this year.

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

Is the Minister of State saying that the redundancy figures, the trend of which is far worse than the trend of the live register figures, indicate that more stable employment is being lost? That, in itself, is a very worrying trend. I would like to ask about those figures. Would a person who has been in a part-time role with a company for a considerable period of time, over the two-year threshold, be covered under the calculations for redundancy figures? Given that the Tánaiste has now reviewed the scheme of supports for businesses and has now admitted the focus was to narrow initially — it has proven the criticisms we had of the employment subsidy scheme in the first instance — is it not the case that we have now lost valuable time in supporting the type of business we need to support which is struggling at the moment? What are the current delays in processing the employers' refunds for redundancy payments? There is an appalling delay of seven or eight months for employers who are struggling to cope with their cash flows at present.

Photo of Conor LenihanConor Lenihan (Dublin South West, Fianna Fail)
Link to this: Individually | In context

It three to four months for individuals and seven to eight months for employers, which is a significant delay. While we are widening the eligibility for the employment subsidy scheme, we are doing so because of the experience we have had to date. It would have been foolish and very dangerous for the Government to put in place an employment subsidy scheme which from the outset was open to abuse or could be constructed in such a fashion that the wrong types of employers were drawing down the benefit to the exclusion of those.

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

The Government is putting jobs at risk for fear that the wrong types of employers might get it. It is good to know that.

Photo of Conor LenihanConor Lenihan (Dublin South West, Fianna Fail)
Link to this: Individually | In context

It is a rather good practice in public policy——

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

Jobs are being lost in the meantime.

Photo of Conor LenihanConor Lenihan (Dublin South West, Fianna Fail)
Link to this: Individually | In context

——to introduce a scheme that is minimalist to begin with and learns from the experience and the demand for such a scheme so that it can develop from there.

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
Link to this: Individually | In context

Does the Minister of State hope to save money?

Photo of Conor LenihanConor Lenihan (Dublin South West, Fianna Fail)
Link to this: Individually | In context

I do not quite understand the issue with the redundancy figures. I can give the Deputy details of the redundancy claims lodged between 2002 and 2009. I am not sure whether the Deputy is interested in them from a statistical point of view. Clearly a person who was in part-time employment does not get redundancy. While I know what the Deputy is asking, he might want to reframe that question. Clearly part-time employees are able to make social welfare claims. I know we are not taking questions for the Minister for Social and Family Affairs, but I would have thought that was understood. The Deputy's question is framed on the difference between the live register and the unemployment——

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
Link to this: Individually | In context

We shall have a brief supplementary question from Deputy Naughten.

Photo of Conor LenihanConor Lenihan (Dublin South West, Fianna Fail)
Link to this: Individually | In context

May I finish? The live register is a measure of unemployment and underemployment.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
Link to this: Individually | In context

The Chair would be obliged if the Minister of State would also have regard to the Chair.

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

Does the Minister of State believe it is acceptable that employers need to wait for seven or eight months to get a refund? Many of them are struggling with cash flow difficulties. Regarding the issue of part-time and full-time employees, there is an anomaly regarding how the readings and calculations are done for redundancy and for the live register, which also adds to the discrepancy. Is it not the case that the real reason for the discrepancy is that people are either going into education or more likely emigrating from the country? That is why we are seeing redundancy figures increasing and live register figures reducing.

Photo of Conor LenihanConor Lenihan (Dublin South West, Fianna Fail)
Link to this: Individually | In context

On the final question about resources, of course in an ideal world we would prefer if these payments could be done pretty well immediately. However, as the Deputy knows considerable pressures have been added to staff working in the redundancy section precisely because of the jump in the number of redundancies.

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

There are huge pressures on businesses also.

Photo of Conor LenihanConor Lenihan (Dublin South West, Fianna Fail)
Link to this: Individually | In context

Of course there are huge pressures on businesses. We would hope to reduce the delays over a period. For the moment we have reassigned 26 additional full-time people into the redundancy payments area to process these payments more quickly. The level of redundancy claims does not bear much relationship to the level of unemployment. That is an important point. In 2002 there were 24,000; in 2003 there were 25,000. Skipping ahead to 2008 and 2009 the figures were 40,000 and 67,000. While it is reflective of the performance of the economy, it does not correlate exactly with the levels of unemployment.

The simplest way to explain the difference to the Deputy between the live register and unemployment is to state that the live register captures unemployment and underemployment at the same time.