Thursday, 2 March 2017
I welcome the Minister of State, Deputy Byrne. I have to raise one small issue, which is that the Minister of State was in front of me four weeks ago in regard to Tipperary hostel workers and she promised me sincerely she would get answers for me. I regret to say I have heard nothing back from her since, despite having e-mailed her. It is not about me; it is about those workers in the Tipperary hostel. I hope she will pursue the answers she promised me on the day. I know that is not what I am supposed to say.
I raise this question because of a series of experiences that have been relayed to me by workers active in the construction sector. These people have been puzzled, to say the least, by two related phenomena in the sector. The first is that a number of employers declare they cannot fund redundancy payments, leaving the workers to pursue their statutory entitlements via the Social Insurance Fund. This situation creates a number of problems for the workers in question. For starters, they lose their right to notice, leaving them short between one and eight weeks' pay, which is a significant loss. Second, they have to wait for payment for months, sometimes up to one year if they are taking cases through the Workplace Relations Commission to recover their redundancy entitlements. A huge amount of stress and worry is involved for those workers.
What has been even more frustrating is the regular sight of companies that declared they were unable to pay redundancy not only continuing to trade but actually winning public contracts for more work. It seems bizarre that this practice could happen. It appears, I regret to say, to be a regular feature of the construction sector.
I want to give the Minister of State a couple of examples in this regard. As one of the company names is actually the name of an individual, I will not mention the name out of respect for the rules of the Chamber, but I can supply the Minister of State with the name of the company afterwards. This medium-size contractor let workers go, declaring it could not fund redundancies, and left the workers to recoup moneys via the taxpayer and the Social Insurance Fund. However, the company continued to trade, it won a contract to build the public swimming pool at Nenagh, County Tipperary, and it has since won substantial public contracts at Athlone Castle and with the Department of Education and Skills - a current €8 million project at Ballyhaunis community school has been given to this company. It seems baffling that a company that declares it has no money to pay redundancy continues to win public contracts.
Another company, an agency specialising in contract labour, has regularly laid off workers and declared it has no funds to pay redundancy. The same agency continues to trade and continues to be a major supplier to a wide range of public contracts. Interestingly, when trade unions are taking cases for redundancy to what was the Rights Commissioner Service, now the Workplace Relations Commission, the labour agency would not even bother to turn up. The union would win the case and apply directly for payment to the Social Insurance Fund.
This begs the question of whether the Department of Social Protection is pursuing these moneys. Can the Minister of State explain how such companies can continue to tender for and win public contracts? I note from a report in the Irish Independent that the Department of Social Protection has written off more than €100 million of PRSI debt owed by thousands of firms. The same report tells us that the total debt pile owed by 13,600 companies has soared to nearly €500 million, and that just 10% of this debt is deemed recoverable. The report goes on to say the Department seeks recovery of debt directly from employers who continue to trade after getting into difficulty. I have a real concern that the Department may not have been relaying information about companies in debt to the Social Insurance Fund to other Government Departments. The examples I am citing are clear proof that something fundamental is wrong here. I wonder whether the examples I am quoting are just the tip of the iceberg.
First, I want to address Senator Gavan's remarks on our previous engagement. I assure the Senator that any time I take a Commencement matter, I always make sure to go back to the Minister on a personal basis. I went back to the Minister on a personal basis and relayed Senator Gavan's concerns regarding the Commencement matter that day. I was in contact again this morning and have been assured that an interim report is on its way to Senator Gavan at some time today. If that does not happen, he might contact me so I can follow it up. I make it my business to take each matter to the individual Minister.
I am taking this matter on behalf of the Minister for Social Protection, Deputy Varadkar, who cannot be present. Under the Redundancy Payments Acts 1967 to 2013, eligible employees who lose employment as a result of redundancy are entitled to two weeks' statutory redundancy payment for every year of service, plus a bonus week. In the first instance, it is the responsibility of the employer to pay statutory redundancy to all those eligible. However, the Social Insurance Fund provides a safety net for employees in situations where the employer is insolvent or in financial distress to the extent that it cannot fund the redundancy payments.
In situations where an employer becomes insolvent or is in financial difficulties, and is unable to make these payments, the Social Insurance Fund steps into the shoes of the employer and makes statutory redundancy payments directly to the employees concerned. In such situations, a debt is then created on the employer for the full amount and the Minister, Deputy Varadkar, can confirm that the Department of Social Protection actively pursues the recovery of the debt to the extent that it is able to do so.The fact that a firm is in such severe financial difficulty that it becomes insolvent or is otherwise unable to fund statutory redundancy payments means that much of the debt is unlikely ever to be recovered. This position is recognised by the Comptroller and Auditor General and noted in the statutory accounts of the Social Insurance Fund. Nevertheless, the Department of Social Protection has an employer debt management policy in place which it actively implements. In support of this policy a new debt recovery and accounting IT system was introduced in 2014 which provides structured support for the debt recovery process. As part of this policy, when redundancy payments have been made from the Social Insurance Fund, the Department of Social Protection liaises with those employers continuing to trade in a constructive manner in order to recover the debt. In doing this, it takes account of the financial position of each company and tailors the debt management process to suit individual circumstances, balancing the requirement to recover the debt on behalf of the fund with the concern not to further jeopardise the financial position of the employer. This is both to protect remaining jobs and to enhance the prospects of ultimately recovering the full debt. For this reason, the debt management policy does not include an exclusion from tendering for public contracts. It is not in the interests of the Department of Social Protection to put barriers in the way of employers in obtaining contracts for work, rather it is important that those companies with a debt to the Social Insurance Fund continue to trade in order that they remain viable and in a position to repay that debt.
Debt owed to the Social Insurance Fund by employers is only written off where the Department of Social Protection is completely satisfied, in line with the Comptroller and Auditor General's requirements, that the debt is not recoverable and debt write-offs are only carried out with the sanction of the Department of Public Expenditure and Reform.
I thank the Minister of State for her response. I also thank her for her response on the Tipperary hostel workers issue. I look forward to receiving the interim report today.
The answer the Minister of State has given is comprehensive. It has been said clearly that companies in financial difficulty can continue to tender for public contracts. I have clear examples of companies that state they cannot make redundancy payments, which means that the workers are facing a significant financial loss, at least in terms of notice periods, and will have to wait for up to a year. It is infuriating to see the same company win a public service contract. Ultimately, the people who lose out are the workers. I have given two explicit examples of companies that are abusing the system. They are getting out of meeting their social insurance obligations and continuing to win major public contracts. The fact that one of them, in particular, does not even bother to turn up at the WRC because it assumes and knows that the taxpayer will foot the bill is not right. I ask the Department to look seriously at this. I will happily supply further details if it would be helpful.
If the Senator wants to send me the details, I will bring them to the attention of the Minister, Deputy Leo Varadkar, as it would be of help to have them. Alternatively, he can bring them to the Department. I will raise his concerns with the Minister.