Written answers

Wednesday, 29 September 2010

Department of Enterprise, Trade and Innovation

Redundancy Payments

11:00 pm

Photo of Deirdre CluneDeirdre Clune (Cork South Central, Fine Gael)
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Question 1699: To ask the Minister for Enterprise, Trade and Innovation if he will review the application for redundancy in respect of a person (details supplied) in County Cork; the status of this application; when will the redundancy be paid; and if he will make a statement on the matter. [32095/10]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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My Department administers the Social Insurance Fund (SIF) in relation to redundancy matters on behalf of the Department of Social Protection. There are two types of payment made from the SIF — rebates to those employers who have paid statutory redundancy to eligible employees, and statutory lump sums to employees whose employers are insolvent and/or in receivership/liquidation.

I can confirm that my Department received a statutory redundancy lump sum claim on 19 April, 2010 in respect of the above individual. This claim awaits processing.

In respect of lump sum payments paid directly to employees in instances where employers are unable to pay the statutory redundancy entitlements, the current processing time for these claims is between six and seven months and claims dating from February 2010 are currently being processed. Of course in some instances, where the necessary supporting documentation for lump sum claims is not provided to my Department, or where queries arise, processing of claims can be further delayed until the required documentation is provided and/or outstanding queries are resolved.

My Department continues to make every effort to reduce processing times. Measures already taken in the Department to alleviate the pressures on the payments area include:

Almost doubling the number of staff working solely on redundancy payment claims through reassignment to a current level of 52 full time equivalents;

Prioritisation of the Department's overtime budget towards staff in the Section to tackle the backlog outside normal hours;

Establishment of a special call handling facility in NERA to deal with the huge volume of telephone calls from people and businesses concerned about their payments;

Better quality information relating to current processing times on the Department's website;

Engagement with the Revenue Commissioners to facilitate the offset of redundancy rebate payments by employers against existing outstanding tax liabilities which those employers owe to the Revenue Commissioners.

I would also point to the fact that in the 8-month period up to the end of August 2010, the number of claims processed by my Department was 51,800, a 96% increase compared to the corresponding period in 2009 (26,405) which also exceeds the total number of claims processed for the whole year 2009 (50,664). Currently the weekly intake of new claims is an average of just over 1,200. Overall, new claims received in the first eight months of 2010 amounted to 43,449, a fall of just over 20% over the corresponding eight-month period in 2009 when 54,439 claims were lodged.

The claims backlog which reached its highest level at 43,000 in the latter quarter of 2009 has been reduced to a level of 32,137 at the end of August 2010 representing a reduction in the backlog of almost 11,000 claims.

Responsibility for the payment functions arising under the redundancy and insolvency payment schemes is due to be transferred to the Department of Social Protection with effect from 1 January 2011. In transferring the functions between Departments, it is the intention that this will operate seamlessly and without any adverse impact on the service levels being experienced by individuals or the business community awaiting payment of redundancy claims.

Photo of Deirdre CluneDeirdre Clune (Cork South Central, Fine Gael)
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Question 1700: To ask the Minister for Enterprise, Trade and Innovation the number of person who have applied for redundancy payments for each year since 2006 and to date in 2010 in tabular form; and if he will make a statement on the matter. [32097/10]

Photo of Deirdre CluneDeirdre Clune (Cork South Central, Fine Gael)
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Question 1733: To ask the Minister for Enterprise, Trade and Innovation the amount of money that has been paid out in redundancy payments for each year since 2005 and to date in 2010 in tabular form; the amount his Department is seeking to recover from companies when it paid redundancy to employees and is seeking to recover some or all of that from the company for each year since 2005 and to date in 2010; and if he will make a statement on the matter. [32099/10]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I propose to take Questions Nos. 1700 and 1733 together.

Table 1 sets out the number of statutory redundancies for the years 2006 to 2009 and provisional figures for January to August, 2010. These figures reflect the number of employees who actually qualified for statutory redundancy lump sum payments. They do not reflect those who lost their jobs with less than two years service in employment.

Tables 2 sets out the monies paid out of the Social Insurance Fund in respect of redundancy claims for the years 2005-2009 and up to 31 August, 2010. It should be noted that all figures provided for 2009 and to date in 2010 are provisional figures.

During the period 1 January 2010 to 31 August, 43,449 claims were received and 51,800 were processed with an attendant value of €320m.

In situations that employers provide proof of inability to pay redundancy entitlements, the Department pays the employees directly from the Social Insurance Fund. In circumstances where proof of inability to pay on the part of the employer is not provided, or the employer refuses to pay the redundancy lump sum payments to employees, it is the case that the Department refers those employees to the Employment Appeals Tribunal (EAT) to obtain a determination of their right and entitlement to a redundancy lump sum. Where a positive determination is obtained from the EAT, this enables the Department to pay the employees directly from the SIF and the Department then endeavours to recover from the employer the amount paid out from the Fund — 40% in the case of employers where proof of inability to pay could not be provided and, in the case of employers who refused to pay the redundancy entitlements in the first instance, the Department seeks to recover to the SIF 100% of the amount paid out. Lump sum payments are shown separately in Table 2.

The Minister becomes a preferential creditor in a winding-up situation in recovering amounts paid from the Social Insurance Fund (SIF) and this debt stands against a company for as long as it remains live on the Companies Register at the Company Registration Office. In the years 2005 to 2009, the Department has been successful in recovering to the Social Insurance Fund amounts of €2.2m, €0.4m, €0.7m, €0.9m and, €3.6m respectively as shown in Table 3. In the year 2010 up to 31 August the Department has so far recovered €2m.

Currently, the cumulative debt outstanding, which the Department is seeking to recover to the Social Insurance Fund, is €99.7m.

Table 1: Actual Statutory Redundancies for years 2005 to 2009 and up 31 August, 2010.
200520062007200820092010*
23,15623,68425,45940,60777,00143,449
*Provisional figures.
Table 2: Expenditure from the SIF on Statutory Redundancies in the years 2005 to 2009 and January/August 2010
Category of claimRebate to employersLump sums to EmployeesTotal
2005137,915,57411,257,620149,173,194
2006152,168,53214,343,692166,512,224
2007167,390,54215,937,492183,328,034
2008161,774,38931,936,998193,711,387
2009*247,891,73387,970,092335,861,925
Jan–Aug 2010*260,664,13959,351,823320,015,965
Table 3: Recoveries on Redundancy Payments 2005 to 2009 and up to 31 August 2010
20052,199,478
2006434,468
2007 657,978
2008948,606
2009*3,614,798
2010*2,010,020
Note the amounts recovered in each year relates to monies recovered for the current year and earlier years.
*All figures for 2009 and 2010 are provisional subject to audit.

Photo of Deirdre CluneDeirdre Clune (Cork South Central, Fine Gael)
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Question 1701: To ask the Minister for Enterprise, Trade and Innovation the number of persons who were advised to take a case to the Employment Appeals Tribunal because their employer had not provided adequate information to the Department in each year since 2008 and to date in 2010; and if he will make a statement on the matter. [32098/10]

Photo of Deirdre CluneDeirdre Clune (Cork South Central, Fine Gael)
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Question 1703: To ask the Minister for Enterprise, Trade and Innovation the length of time employees seeking redundancy from his Department but required to take a case to the Employment Appeals Tribunal are waiting for their case to be heard by the Employment Appeals Tribunal; the length of time they must wait for redundancy payments once the EAT has ruled in their favour; if he has reviewed this procedure in view of the fact that such employees are being penalised for the actions of their employers; and if he will make a statement on the matter. [32101/10]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I propose to take Questions Nos.1701 and 1703 together.

Under the Redundancy Payments Acts 1967-2007, the objective is to ensure that statutory redundancy payments, due to eligible employees on being made redundant, are made in accordance with the legislative provisions. The legislation places the onus, in the first instance, on the employer to discharge the obligation to pay redundancy entitlement to employees. In so doing, the employer is entitled, by virtue of pay related social contributions made to the State, to recover a 60% rebate on the amount paid out in redundancy payments to employees.

When employers provide proof of inability to pay the Department pays the employees directly from the SIF. In circumstances where proof of inability to pay on the part of the employer is not provided, or the employer refuses to pay the redundancy lump sum payments to employees, it is the case that the Department refers those employees to the Employment Appeals Tribunal (EAT) to obtain a determination of their right and entitlement to a redundancy lump sum.

Where a positive determination is obtained from the EAT, this enables the Department to pay the employees directly from the SIF and the Department then endeavours to recover from the employer the amount paid out from the Fund — 40% in the case of employers where proof of inability to pay could not be provided and, in the case of employers who refused to pay the redundancy entitlements in the first instance, the Department seeks to recover to the SIF 100% of the amount paid out.

The Employment Appeals Tribunal is a quasi-judicial body under the aegis of my Department. I have no role in the discharge by the Tribunal of its quasi-judicial functions. However, I understand that the total number of claims under the Redundancy Payments Acts to the Employment Appeals Tribunal recorded for the period January — 23 September 2010 is 2,189. The figure recorded for claims under the Redundancy Payments Acts disposed of during that period is 1,639.

It is not possible to identify those claims that have been submitted in order to meet a procedural requirement for payment by the Department under the Redundancy Payments Acts. The waiting period for a hearing of the tribunal for claims under the Redundancy Payments Acts can range from 27 weeks to 61 weeks. A pilot initiative, focused on achieving rapid reductions in waiting times, especially for cases involving redundancy payments, has been launched in Cork. The initial results are promising with waiting times for redundancy payment cases dropping to 24 weeks (week ending 24 September 2010).

Currently the waiting time for payment of redundancy lump sum claims in my Department is just over six months. In instances where an individual(s) obtains a positive determination from the EAT, the redundancy payments section will prioritise the payment of those redundancy claims as soon as the employee can confirm, in writing, that he has not received any or all of his redundancy payment at any time from his employer. When a hearing decision and an application for redundancy (form RP50) is available to the redundancy payments section a communication is issued to the employer asking him to confirm his inability to pay and to respond within a two week period. Upon expiry of this period, the payment process is initiated which takes two to three weeks. Delays in submitting the confirmation of non-receipt of payment, the EAT determination and the form RP50 can of course add to the timeframe.

Unfortunately I am unable to give the Deputy the number of persons who were advised to take a case to the Employment Appeals Tribunal because their employer had not provided adequate information to the Department as we do not collate this information and it would consume considerable resources within what is currently a very busy area of my Department to provide the information requested. I am sure the Deputy will appreciate that the main focus of the redundancy payments section currently is to dispatch redundancy payment claims to individuals and businesses as quickly as possible.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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Question 1704: To ask the Minister for Enterprise, Trade and Innovation if a person (details supplied) in County Tipperary is entitled to redundancy payment; and if he will make a statement on the matter. [32162/10]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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My Department administers the Social Insurance Fund (SIF) in relation to redundancy matters on behalf of the Department of Social Protection. There are two types of payment made from the SIF — rebates to those employers who have paid statutory redundancy to eligible employees, and statutory lump sums to employees whose employers are insolvent and/or in receivership/liquidation. I can confirm to the Deputy that, on the basis of valid claims entered in the redundancy payments system in my Department, there is no record of a redundancy claim in respect of the individual concerned.

Under the redundancy payments scheme all eligible employees are entitled to a statutory redundancy lump sum payment on being made redundant. An employee is entitled to two weeks pay for every year of service, plus a bonus week, subject to the prevailing maximum ceiling on gross weekly pay which is currently €600. Eligibility for persons to qualify under the scheme requires that:

The employee must have at least two years continuous service (104 weeks) in the employment of the employer;

The employee must be in employment that is insurable under the Social Welfare Acts. Full-time employees must be in employment which is insurable for all benefits under the Social Welfare Acts; this does not apply to part-time employees;.

The employee must be 16 years and upwards;

The employee must have been made redundant as a result of a genuine redundancy situation.

It is up to the employer concerned in the first instance to determine whether or not in fact a redundancy situation obtains and, if so, to notify my Department using an RP50 form which can be downloaded from the Department's website at www.entemp.ie

Disputes in relation to redundancy entitlements can be referred to the Employment Appeals Tribunal (EAT) for adjudication. The EAT is located at Davitt House, Adelaide Road, Dublin 2 and the website of the EAT is a useful resource and is located at www.eatribunal.ie.

Photo of Mattie McGrathMattie McGrath (Tipperary South, Independent)
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Question 1705: To ask the Minister for Enterprise, Trade and Innovation when a redundancy payment will be made in respect of a person (details supplied) in south Tipperary; and if he will make a statement on the matter. [32178/10]

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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Question 1708: To ask the Minister for Enterprise, Trade and Innovation when a redundancy payment will issue to a person (details supplied) in County Tipperary; and if he will make a statement on the matter. [32452/10]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I propose to take Questions Nos. 1705 and 1708 together.

My Department administers the Social Insurance Fund (SIF) in relation to redundancy matters on behalf of the Department of Social Protection. There are two types of payment made from the SIF — rebates to those employers who have paid statutory redundancy to eligible employees, and statutory lump sums to employees whose employers are insolvent and/or in receivership/liquidation. I can confirm to the Deputy that a lump sum redundancy claim was received by my Department in April 2010 in respect of the individual concerned. I am pleased to advise the Deputy that the claim has been authorised for payment and that payment issued on 20 September 2010.

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