Seanad debates

Tuesday, 15 November 2022

Nithe i dtosach suíonna - Commencement Matters

Redundancy Payments

2:30 pm

Photo of Ned O'SullivanNed O'Sullivan (Fianna Fail)
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I welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy English.

Photo of Paul GavanPaul Gavan (Sinn Fein)
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I thank the Minister of State. In February last year workers at Rehab Enterprises in Limerick were informed by senior management that the company would make 36 workers redundant following a 30-day consultation period. Most of these workers were earning the minimum wage of €10.20 at the time, of which 75% was subsidised under the long-standing disability wage subsidy scheme. The workers concerned who subsequently lost their jobs as of 2 April 2021 are among the most vulnerable people in society. They include people with visual impairments, learning difficulties and Down's syndrome. They lost their jobs in the middle of a pandemic and some of these workers had given decades of service.

Regrettably, the Rehab Group management made a unilateral decision to depart from a well-established redundancy agreement with SIPTU. This decision was totally unacceptable and an affront to the principles of equality and fairness. Instead of offering four weeks' per year of service plus statutory uncapped as per the long-standing agreement with SIPTU, Rehab offered just two weeks' plus statutory capped at one year's salary.

To put that into simple terms, as one worker who had been with the company for 30 years said, he should be entitled to €60,000 redundancy but he was offered just over €21,000. The 49-year-old added:

It is an insult. We feel cheated like we are dirt. It is a slap in the face. We are astounded at what Rehab had the cheek to offer us. My heart has been torn out of me. It is so hard to take.

His family said they fear that he and his colleagues would struggle to find other suitable work and that their lives would be negatively impacted by the lack of routine.

SIPTU has since been engaged in a long-running battle with Rehab, via the Labour Court, to secure the redundancy package the workers are entitled to under that long-standing agreement with the company. In April last year, the Labour Court recommended that a financial review be carried out to assess the ability of Rehab Enterprises, and the parent company Rehab Group, to honour the existing redundancy agreement. That review established that the Rehab Group, which owns 100% of Rehab Enterprises, has as custom and practice contributed to previous redundancy packages and has the ability and means to pay the full redundancy terms in the collective agreement with SIPTU.

In an updated commentary this year, the same analyst referenced a significant improvement in the finances of the Rehab Group with a net current asset year-on-year improvement of circa€3 million, and cash or cash equivalents of €20.8 million, which is an improvement from €11.8 million the previous year. The same analyst also noted a significant sum was paid to a senior executive in 2020. While the sum was not fully disclosed by the company, the analyst also noted that packages of €813,000 were paid to senior management in 2018 and 2019. So it would appear that there is one rule for senior management when it comes to redundancy packages and quite a different rule for front-line workers.Last week SIPTU won a significant victory at the Labour Court after the third and final round of hearings. Quoting the financial analyst's clear determination that the Rehab Group has options to explore to meet this claim the court determined that it could find no clear and undisputed basis not to uphold the existing collective agreement and consequently recommended that it be respected.

The Rehab Group receives significant funding each year from the State. It has been demonstrated that it can afford to honour the redundancy agreement for these workers who are among the most vulnerable in the state. It has literally tens of millions of euro in available funds and has no problem splashing the cash for senior management. Will the Minister of State give a clear call on the management of Rehab to honour the existing redundancy agreement, as endorsed by the Labour Court?

It is interesting reading SIPTU’s submission to the Labour Court as it details the procrastination and delay that has been a constant feature of the Rehab Group’s response to this issue. It has dragged it out and these workers have been waiting for more than 18 months for the redundancy they should have received, so a clear message from the Minister of State would be very welcome and I look forward to his response.

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
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I thank Senator Gavan for raising this matter. We discussed this issue in 2021 as well. I again extend my sympathies to the workers in Rehab Enterprises who have been made redundant. I fully appreciate how difficult the situation is for those involved and for their families.

By law it is an employer's responsibility to pay statutory redundancy to eligible workers. In situations where an employer is genuinely unable to pay statutory redundancy entitlements due to financial difficulties or insolvency, the State provides a safety net and may make the statutory redundancy payments on the employer's behalf from the Social Insurance Fund. However, negotiations on enhanced redundancy packages over and above the statutory entitlement, which is the case we are discussing here, are entirely a voluntary matter between employers and workers. The State has no role in this matter.

For its part, in the event of a dispute, the State provides the industrial relations dispute settlement mechanisms, that is, the Workplace Relations Commission, WRC, and the Labour Court, to support parties in their efforts to resolve their differences. I must emphasise that Ireland's system of industrial relations is essentially voluntary in nature and that responsibility for the resolution of industrial disputes between employers and workers rests in the first instance with the employer, the workers and their representatives. Recommendations arising from the WRC and the Labour Court are not legally binding. While I strongly encourage parties to engage in the industrial relations process in a constructive manner, the State cannot compel a party to comply with a Labour Court recommendation.

It is my understanding that negotiations are still in play and I would hope that the parties could reach a solution. I know there were offers and counter-offers and I hope a solution can be found. I am not in a position to tell the company. We have the industrial relations infrastructure and it has to do its job. I afraid that beyond the statutory redundancy, we do not have a role when it come to a commercial case.

Photo of Paul GavanPaul Gavan (Sinn Fein)
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I thank the Minister of State for his reply, which I am a little disappointed with. I understand the State cannot compel an employer to make a payment above statutory but, as a Minister of State, I would have thought he would have a responsibility to support the industrial relations machinery of the State. The Labour Court is the highest court in that regard. It has made a clear call on Rehab to pay these very vulnerable workers the moneys they are due under the collective agreement. We both know there has been a whole host of issues over collective agreements in recent years. I would think it is quite within the Minister of State's powers to ask Rehab Group to respect the recommendation of the Labour Court. This is the Labour Court, which is the industrial relations court of the State. When one reads the history of this dispute, and in particular the incredibly cynical attitude of the Rehab Group in relation to dragging out this process - as I said, these workers have been waiting 18 months and longer for the redundancy entitlements agreed collectively - it should not be allowed to walk away from that collective agreement. The Labour Court has said it should not walk away from this agreement. I ask the Minister of State to endorse the Labour Court's recommendation in this instance and give badly needed support to those vulnerable workers and their families.

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
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The Government agrees the workers involved are a vulnerable cohort of the workforce. That is why every effort was made to work with them as far as possible from our end of it, in terms of the industrial relations agencies.Apart from that, as the Deputy is aware, the Department of Social Protection and the Intreo office had intensive engagement at local level with all the workers to assist them on their journey and ensure they got all their statutory entitlements. They also gave the workers advice and direction regarding other potential jobs and worked with local employers to achieve that.

I understand that at the time of the announced job losses, on a local level, dedicated staff in the Department of Social Protection were assigned to work directly with the employees affected by redundancy because we recognised the position they were in and to ensure they received their proper entitlements and other services available to them. Officials also held group information sessions and one-to-one phone meetings with the workers involved. They advised the workers on supports for jobseekers with disabilities, including the EmployAbility service, which is an employment and recruitment service, to help people with a disability secure and maintain employment. Many of these people had built up skills working in this business for a long number of years. This action ensured employees were able to access their entitlements swiftly and in a manner that hopefully did not cause further distress.

I understand that the workers and their families are disappointed with the terms of the proposed redundancy package but, as Minister of State, I am precluded from intervening in this matter. This is because the Workplace Relations Commission, WRC, and the Labour Court are independent offices of our Department. As I mentioned, recommendations arising from the WRC and Labour Court are not legally binding. I agree with the Deputy that everybody should try to respect the arms of the State and the industrial relations machinery put in place, which works extremely well and effectively in most cases.

The Government cannot compel a party to comply with a recommendation. The ultimate responsibility for compliance with any Labour Court recommendation rests with the employer, the workers and their representatives. I understand there is still room for negotiations and some offers were made as well. I hope common sense will prevail and a solution will be found involving all three groups in this decision.

Cuireadh an Seanad ar fionraí ag 3.22 p.m. agus cuireadh tús leis arís ag 3.30 p.m.

Sitting suspended at 3.22 p.m. and resumed at 3.30 p.m.