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Written Answers. - Company Closures.

Tuesday, 26 November 2002

Dáil Éireann Debate
Vol. 558 No. 1

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 168. Mr. Stanton Information on David Stanton Zoom on David Stanton  asked the Tánaiste and Minister for Enterprise, Trade and Employment Information on Mary Harney Zoom on Mary Harney  if she has been requested to meet with former workers at IFI; when such meetings have occurred or will occur; and if she will make a statement on the matter. [23600/02]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney): Information on Mary Harney Zoom on Mary Harney I can confirm that in response to a request from representatives of the IFI workers, representatives of ICI, the other shareholder, and I met with representatives of the IFI workers on Friday last, 22 November.

Question No. 169 answered with Question No. 159.

[198]

 170. Mr. G. Mitchell Information on Gay Mitchell Zoom on Gay Mitchell  asked the Tánaiste and Minister for Enterprise, Trade and Employment Information on Mary Harney Zoom on Mary Harney  if she will make a statement on the contents of a letter (details supplied) in relation to IFI. [23623/02]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney): Information on Mary Harney Zoom on Mary Harney I share the workers' disappointment that, despite the efforts of all those involved, it was not possible to find a solution to the severe financial difficulties at IFI. Regretfully, IFI made significant losses in the past year and in the absence of a plan to establish that the company could be viable, both shareholders agreed that the provision of further funding could not be justified. This decision was not taken lightly but against a background where the Government, through NET, and ICI as joint shareholders have been very supportive of the company, including by means of the provision of €34 million to the company in the past two years. Substantial efforts on the part of IFI's board of directors and shareholders to find a buyer for the whole or part of the company had proved similarly disappointing. Regrettably, this left the IFI board with no alternative but to liquidate the company.

The shareholders, while there is no legal obligation to do so, have established a special ex gratia severance fund with almost €24.5 million for the workers. This ex gratia fund is in addition to an estimated €11 million in statutory entitlements such as redundancy and minimum notice which employees will receive either as preferred creditors in the liquidation of IFI or directly from the relevant Government agency. Given that there will be a total of more than €35 million available, payments will amount to an average of about €57,000 per worker. Both the Irish Government and ICI believe that in setting up the ex gratia fund they are providing severance arrangements which are fair in the circumstances. It will be for the ex gratia fund's trustee to decide, after consultations with employee representatives, how payments from the ex gratia fund will be made.

As part of these arrangements, the shareholders have also provided funds to the trustee which enable him to make interim payments of €5,000 or three months pay if lower to each worker who has lost their job as a result of the liquidation, with pro rata payments for former part-time employees. This is to help them manage their financial situation through the short-term pending agreement with the trustee on the shape of the final scheme. These interim payments have been available since Monday, 18 November and a number of workers have now received such interim payments.

However, it would appear that there is considerable misunderstanding on the part of the IFI workers concerning the nature and extent of the waiver which they are being asked to sign in order to obtain payments from the ex gratia fund. In light of this confusion and the concerns which the workers have as a result, the shareholders have agreed to a request from the unions that the workers should be allowed to collect interim payments on the basis of signing a letter which [199] acknowledges receipt of the payments and accepts that a waiver in a form to be agreed will have to be signed in order to get any final payment from the fund. It has also been agreed that there will be further discussions on the wording of the waiver following consultations by unions with their legal advisers. Any workers for whom the current payment is expected to constitute their full entitlements from the fund may be asked to sign the current form of the waiver but will be entitled to substitute any revised version that may be agreed in due course. I hope that all workers will now be in a position to accept the interim payments. In addition to these interim payments which are available immediately, I can also confirm that my Department is aiming to issue payments before Christmas in respect of valid statutory redundancy claims from IFI workers.

Pensions issues are very complicated and I am concerned that there appears to be a lot of incomplete and, sometimes, conflicting information circulating at present in relation to the position of the various schemes. I understand that IFI has been meeting its obligations to the various schemes. The estimated statement of affairs presented by the IFI board to the creditors meeting recently showed that the company owes the pensions schemes just €178,000, which, as a preferential debt, should be paid in full. The shareholders are not aware of any obligations in relation to the pensions funds.

Notwithstanding this position, it is understood that the pensions funds face potential difficulties mainly from the impact of adverse stock market movements on the investments made by the fund. These issues have been indicated to be particularly serious with respect to the scheme for Belfast workers. The position of the schemes covering the other workers is less clear but the indications are that these schemes may have somewhat less of a problem. Clearly, the uncertainty involved is giving rise to serious concerns on the part of employees and it is critical that the trustees of each scheme should establish the full facts as quickly as is feasible and consider the full range of options available to them to mitigate the impact on members or to minimise any shortfalls involved. Unfortunately, it is likely to take some time for all the various issues involved to be clarified fully.


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