Dan Neville (Limerick West, Fine Gael)
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Question 450: To ask the Minister for Enterprise, Trade and Employment his views on the request from the former employees of Castlemahon that he pay to them the moneys recovered from the company from the moneys which were part of the redundancy refunds under the Redundancy Acts. [11691/07]

Tony Killeen (Clare, Fianna Fail)
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The Redundancy Payments Scheme was established on 1st January 1968. The scheme is governed by the Redundancy Payments Act 1967, the Redundancy Payments Act 1971, the Redundancy Payments Act 1979 and the Redundancy Payments Act 2003.

In general, a redundant employee with at least 2 years service in an employment is entitled to receive 2 weeks pay per year of service plus one extra week's pay at the gross rate of pay up to a ceiling of €600 per week. Wages in excess of €600 per week should not be included when calculating a statutory redundancy lump sum payment.

It is up to the employer to pay the statutory payment in the first instance. When an employer pays the statutory redundancy lump sums to the employees, he is entitled to claim a rebate of 60% from the Social Insurance Fund by submitting completed forms RP50 in respect of each redundant employee to the Department for processing. When the necessary checks are carried out on the claims and officials of the Department are satisfied that the claims are in order, then a payable order in respect of 60% of the statutory amounts paid to the employees is issued to the employer in settlement of his claim.

If the employer is unable to pay the statutory amount but gives the employee the necessary documentation to claim the statutory lump sum from the Social Insurance Fund (completed form RP50) then the employee can be paid directly by the Department from the Fund on foot of the form RP50.

In cases when the statutory redundancy lump sums are paid directly by the Department to the employees, 40% of each statutory redundancy lump sum paid is recoverable from the assets of the employer by the Department for the Social Insurance Fund.

This statutory Redundancy Recoveries function is provided for in Sections 42 and 43 of the Redundancy Payments Act, 1967 as amended by Section 14 of the Redundancy Payments Act, 1971 and amended further by Section 14 of the Redundancy Payments Act, 1979.

Section 42 of the 1967 Act, as amended by Section 14 of the 1979 Act, gives me, as Minister, preferential status in a winding-up situation in recovering amounts paid from the Social Insurance Fund. Thus, under Section 14 of the 1979 Act, a redundancy lump sum (or part thereof) is made a priority debt under Section 285 of the Companies Act, 1963, in cases of winding-up, and a priority debt under Section 81 of the Bankruptcy Act, 1988, in cases of a bankrupt or arranging debtor.

Section 43 of the 1967 Act also makes general provision whereby all monies due to the Fund (whether in a winding-up situation or not) are debts, which can be recovered in any court of competent jurisdiction.

Section 14 (5) of the 1971 Act makes provision for companies in liquidation/receivership /bankruptcy/administration or insolvent companies to get the benefit of 60% rebate in determining their outstanding debt to the Fund in respect of statutory redundancy lump sum payments made by the Department to eligible employees.

As can be seen from the foregoing, I have no discretion with regard to the 40% due to the Social Insurance Fund. I have no legal powers to divert — from the Social Insurance Fund to the employees concerned — monies which may be recovered from the assets of Castlemahon Food Products.