Ciarán Lynch (Cork South Central, Labour)
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I thank the Ceann Comhairle's office for granting me time to speak on this issue.

Up to 40 workers are expected to be made redundant by Vita Cortex on Friday. The context of the problem I bring before the House is that approximately two years ago the owners secured a loan of €10 million from AIB to purchase this company. Three months ago the company announced the plant's closure because this loan had been taken over by NAMA and the company's assets had been frozen.

I understand there are funds available to meet the redundancy payments to which the employees are entitled but because the company is in NAMA, these payments cannot be agreed in the normal manner as they would if the company was not in the NAMA structure. To date, Vita Cortex has met with NAMA to seek to have the funds unfrozen. Until recent weeks an impression was created that some kind of resolution to the matter would be made. However, just prior to coming into the Chamber, I was given to understand that AIB has been in contact with the workers, on behalf of NAMA, and has stated emphatically that redundancy payments will not be paid from company funds, which are currently held in an account.

In response to this, I call on the Minister for Finance to seek urgent agreement from NAMA to confirm it will release these funds so that the workers who face a bleak prospect of unemployment will, at very least, be sure they will receive the redundancy payments due to them. This case highlights very clearly the difficulties that arise when NAMA effectively takes control of a company by taking charge of its outstanding loans. NAMA's interest in recovering the outstanding moneys can be in conflict with the best interest of a company and its employees. Here we have a situation where 40 workers who face into Christmas with the dole queues as their Christmas gift now also have a difficulty with their redundancy payments. I call on the Minister to intervene directly in this instance and to ensure that the obligations which require payment to these workers are put in place.

Ciarán Cannon (Galway East, Fine Gael)
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I am replying to this Topical Issue Debate on behalf of my colleague, the Minister for Finance, Deputy Michael Noonan.

Reports in the media suggest that due to its assets having been frozen by NAMA, the employees of the Vita Cortex plant in Cork are being deprived of redundancy payments. In particular, it is reported that NAMA has control over a company bank account with cash assets of €2.5 million from which redundancy could be paid. However, it is important we appreciate the full facts in this case. I emphasise there are important issues of client confidentiality that need to be respected in discussing this issue. NAMA is precluded, under sections 99 and 202 of the NAMA Act 2009, from disclosing confidential information relating to debtors. I am, therefore, limited as to what I can say about this case.

I understand from NAMA that the company in question is one of a group of companies owned by a NAMA debtor who, on 16 September 2011, announced his intention to close the Cork plant as part of the reorganisation of Vita Cortex. This involved the amalgamation of the Cork-based production into the Athlone and Belfast plants. I have been informed by NAMA that the company which is being closed down by its owner has no borrowings that are NAMA-controlled.

I am also informed by NAMA that the employees being made redundant are employed by Vita Cortex Industrial Limited, VCIL, which is not a NAMA debtor. The money referred to in media reports represents part-security that NAMA has for a loan in respect of other companies which are NAMA debtors. In these circumstances, therefore, any suggestion that NAMA should release cash from this account so that the liabilities of another non-NAMA company should be discharged seems inappropriate.

There is a redundancy payments scheme in operation, the purpose of which is to compensate workers, under the Redundancy Payments Acts 1967 to 2007, for the loss of their jobs by reason of redundancy. Statutory redundancy lump sums are generally paid by the employer who is then entitled to a rebate from the State of 60% of the relevant amount. Rebates to employers and lump sums paid directly to employees are paid from the social insurance fund.

NAMA would suggest it is more the responsibility of the company's owner to make these payments from his own resources rather than ask NAMA to effectively make redundancy payments on his behalf by releasing security on unconnected loans. If the security for this loan was a plot of land there would be no question of the debtor seeking to get NAMA to pay the costs of his business.

Although the topic for debate relates to a particular issue, it is also worth pointing out that NAMA has assured the Minister for Finance it is committed to contributing to the purposes of the National Asset Management Agency Act 2009 which, inter alia, require it to contribute to the social and economic development of the State, in addition to protecting the interests of the taxpayer by ensuring that the value of any assets securing its loans is not diminished. In this context, NAMA assures the Minister it is a particular priority for NAMA, where possible, to minimise the adverse impact on the viability of any of businesses affected, or on the sustainability of any jobs that may be at stake. NAMA fully recognises the importance of ensuring the continued viability of businesses which can generate cash flow to repay debt and provide sustainable employment. However, NAMA cannot be held responsible for the liabilities of companies over which it has no control or with which it has no formal relationship.

NAMA was not established to settle disputes or to adjudicate on the rights and wrongs in these cases. Such a role is beyond the functions of NAMA as set out in statute in the National Assets Management Agency Act 2009. The prime function of NAMA is to manage acquired loans efficiently, effectively and expeditiously, and in the best interests of the State. In doing so it aims to attain the best achievable financial return on behalf of the taxpayer, subject to acceptable financial risk.

Ciarán Lynch (Cork South Central, Labour)
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To state that one aspect of a company is not in NAMA while another aspect is underlines the complexities NAMA has created in the market place. The fact is NAMA has been engaged in discussions with the employer on this matter and also, directly or indirectly, with the unions involved. Until this afternoon, therefore, it has been engaged in a communication process on this issue. I am at a loss when I hear that NAMA, in spite of having been in these discussions, now claims the situation has nothing to do with it.

In addition, I understand there is a holding account in excess of €2.5 million to which the redundancy payments can be met, comfortably. Two items were mentioned in the budget last week which strike me as relevant to this debate. The Government made a very clear statement with regard to the redundancy obligations of employers. It behoves the Government to ensure that in any matter relevant to such redundancy payments it should act on behalf of those affected. For that reason I call on the Minister for Finance, Deputy Noonan, to intervene and look directly at this problem as it presents itself.

In the course of his budget presentation, the Minister gave a particular direction to NAMA in terms of how it deals with tenants and rents. NAMA was directed to take specific measures in that area. That would indicate it is within the competency of this House, and certainly within that of the Minister for Finance, to give a direction to NAMA on this issue.

I reiterate what I stated at the beginning of this debate - 40 workers are without redundancy payments. I call on the Minister and his Department to examine this issue and make whatever intervention is needed to ensure these workers get their legal dues and receive their redundancy payments.

Ciarán Cannon (Galway East, Fine Gael)
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I again stress I am limited in what I can say about this case given the degree of confidentiality that exists. I reiterate the points made. The company that is being closed by the owner has no borrowings that are NAMA-controlled. The company is not a NAMA debtor and the money referred to in reports, the €2.5 million mentioned by the Deputy, represents part-security NAMA holds for a loan in respect of other companies that are NAMA debtors. I cannot see the logic, therefore, in suggesting that money set aside for debts that apply to a certain number of companies under NAMA control, and which we should seek to protect in the best interests of the taxpayer, should be used to discharge the personal liability of the owner of a company to his employees.

I have sympathy for the employees who will lose their jobs at a difficult time. However, I cannot see how money, held in security for debts controlled by NAMA in the interests of the taxpayer, could be used to offset the company owner's debts to those employees.