Seanad debates

Thursday, 19 December 2002

Kathleen O'Meara (Labour)
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I raise the issue of the announcement that the Miza, formerly Antigen, pharmaceutical manufacturing plant in Roscrea, County Tipperary, is to close, with a substantial loss of employment for the town. The Minister of State, Deputy Parlon, will be familiar with the situation.

Two specific issues arise from this, and I thank an Leas-Chathaoirleach for giving me the opportunity to raise them. The first is the question of statutory redundancy and the second is that of the examinership of Antigen and Miza and the effects thereof. I have concerns about how the examinership worked or, as in this case, did not work.

It is obviously unsatisfactory that workers at the Miza plant will receive only statutory redundancy payments following its closure. The liquidation is happening against a background of massive debt and there are no funds available for redundancy payments. The level of statutory redundancy is far too low in general – not just in the context of these jobs – and it means that people who have worked in the plant for a considerable period will get a payment which is far less than they need or deserve. There have been other closures in north Tipperary and Roscrea and the prospect of replacing those jobs is slim to say the least. People are going to find it difficult to find alternative employment, at least in the immediate area, which raises a major question of unfairness. I ask the Minister of State to indicate when those statutory payments are likely to be made and urge that they be made as soon as possible because people need this support.

I will not go into the details of the examinership. The Minister of State is probably familiar with the situation in any event. Two examiners were appointed, one when the original Antigen plant got into difficulty and another when the takeover by Miza failed to yield the desired result. The Minister of State may have read some commentary in The Sunday Business Post last weekend that articulated very well some of the concerns now being expressed. It asked whether the failure of the Miza Pharmaceuticals Ltd. examinership casts a dark cloud over the country's corporate rescue legislation.

I ask the Minister of State whether the Department of Enterprise, Trade and Employment is looking into the issue of how examinerships work, particularly in light of the experience at Miza. That experience has been bad, not only for the workers but also for a number of the creditors. Questions are being asked, particularly in the accounting profession, about how both these examinerships worked, the decisions that were made and the ongoing consequences of those decisions.

Tom Parlon (Minister of State, Department of Finance; Laois-Offaly, Progressive Democrats)
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I thank Senator O'Meara for raising this issue. It is of particular interest to me because I also come from that area. Although Roscrea is not in my constituency, it was my home town. I went to school there and my children attend school there now. What has happened is an absolute tragedy.

The Department of Enterprise, Trade and Employment has given absolute priority to the processing of the claims for statutory redundancy lump sums under the Redundancy Payments Acts, 1967 to 2001. Although the fully completed forms will only be submitted today, the Department had made arrangements for the liquidator to provide the necessary data for input into the redundancy IT system earlier this week in order to facilitate the speedy processing of claims on behalf of the 245 employees concerned. The aim is to ensure payment before Christmas, despite the short notice. The total redundancy lump sums which have now been authorised for payment amount to €947,901 in total. These statutory payments will be entirely free of tax.

In addition, the Department has made special arrangements to have the individual cheques collected by the liquidator for prompt distribution to all employees concerned in order to avoid the Christmas postal rush. Close co-operation between officials of the Department and staff of the liquidator's office has been a key factor in the expeditious processing of the redundancy claims. I hope that this prompt payment will go some way towards compensating the employees who have been unfortunate enough to be made redundant, in particular at this time of the year.

The employees are also due certain entitlements under the Protection of Employees (Employers' Insolvency) Act, 1984, which is administered by the Department of Enterprise, Trade and Employment. This scheme provides for the payment of certain wage related entitlements, subject to certain limits and conditions, for example, arrears of pay and holiday pay. The Department has not yet received any claims from the liquidator in respect of employee entitlements under the Act. When the claims are received, the Department of Enterprise, Trade and Employment will make every effort to process them without delay.

With regard to the employees' entitlements under the Minimum Notice and Terms of Employment Act, before payment can be made under the insolvency payments scheme, entitlement must first be established by appeal to the Employment Appeals Tribunal. Employees can establish entitlement by making application to the Employment Appeals Tribunal.

Regarding the question of the examinership of this company, the Minister has no function under company law where an examiner is appointed to a company. An examiner is appointed by and is answerable to the courts. Furthermore, since November 2001, when the Office of the Director of Corporate Enforcement was established under the Company Law Enforcement Act, 2001, responsibility for the investigation of suspected breaches of company law lies with the Director of Corporate Enforcement.

Under the Company Law Enforcement Act, 2001, liquidators have certain duties to report to the Director of Corporate Enforcement. Where a company is insolvent, for example, liquidators are obliged to provide a report to the director on the conduct of the company's directors. They are further obliged to make application to the High Court for the restriction of each of the company's directors unless specifically relieved of that obligation by the Director of Corporate Enforcement. Liquidators are also obliged to report suspected criminal offences to the director but in the case of court appointed liquidations, it is for the court to direct the liquidator to refer a matter to the Director of Corporate Enforcement. Section 56 of the Company Law Enforcement Act, 2001, provides that the director may, on his own initiative or at the request of a member, contributor or creditor of the company, request a liquidator of a company in liquidation to produce its books for examination. The director is independent in the performance of his statutory duties and the Minister has no function in the matter.

FÁS is already in discussions with the company with a view to offering its full range of services to staff. These services include information and advice on alternative employment options, services which address the personal needs of workers facing redundancy and services which will provide workers with education and flexible training options, and any other support that may be required. For industrial development purposes, the town of Roscrea comes within the control of Shannon Development. The agency is committed to playing a full part in increasing the attractiveness of the area as an industrial location and a large number of initiatives are in hand, including a business park in Roscrea, advance industrial units, priority in terms of broadband development and technology parks in Thurles and Birr.

Kathleen O'Meara (Labour)
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I thank the Minister of State for his reply and commend the Department on its prompt response to this issue.

An Leas-Chathaoirleach:

I thank the Minister of State, Senators, the ushers and the staff of the Seanad and wish them a happy, holy and peaceful Christmas. I also wish to be associated with the good wishes to John McCabe on his retirement. He is a most courteous man and one of the nicest and most helpful people I have met since I became a Member of the Oireachtas. I wish him well in his retirement.

An Leas-Chathaoirleach:

The Seanad adjourned at 1.20 p.m. until 2.30 p.m. on Wednesday, 29 January 2003.