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Written Answers. - Job Losses.

Tuesday, 3 December 2002

Dáil Éireann Debate
Vol. 558 No. 4

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 146. Mr. Allen Information on Bernard Allen Zoom on Bernard Allen  asked the Tánaiste and Minister for Enterprise, Trade and Employment Information on Mary Harney Zoom on Mary Harney  if the application made by the workers of IFI to the Labour Court regarding severance payments, pension shortfalls and unfair dismissals will be heard; and if her Department will participate in Labour Court hearings in order that the rights of the workers are upheld. [24415/02]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney): Information on Mary Harney Zoom on Mary Harney I am advised by the Labour Court that as of 12.00 noon on Monday, 2 December, it had not received any application from or on behalf of IFI workers.

 147. Mr. Allen Information on Bernard Allen Zoom on Bernard Allen  asked the Tánaiste and Minister for Enterprise, Trade and Employment Information on Mary Harney Zoom on Mary Harney  if full severance payments are being paid to the workers of IFI. [24416/02]

 154. Mr. N. O'Keeffe Information on Ned O'Keeffe Zoom on Ned O'Keeffe  asked the Tánaiste and Minister for Enterprise, Trade and Employment Information on Mary Harney Zoom on Mary Harney  if she will have arrangements made for the payment of compensation to ex-employees (details supplied) without any pre-conditions being imposed on these people. [24765/02]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney): Information on Mary Harney Zoom on Mary Harney I propose to take Questions Nos. 147 and 154 together.

Former workers in IFI will get their full statutory redundancy entitlements and I can confirm that my Department is aiming to issue payments in respect of such entitlements before Christmas in respect of valid claims received to date.

[1022]In addition, 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. When combined with statutory entitlements such as redundancy and minimum notice, which based on the statement of affairs produced by the board of IFI are estimated to be worth about €11 million there will be a total of more than €35 million available. This is sufficient to provide average payments 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 and reasonable 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.

At this stage, most of the workers who lost their jobs as a result of the liquidation have received an interim payment of €5,000 from the fund to help them in the short term pending the determination by the trustee on the shape of the final scheme for the distribution of the available funds.

Agreement has also been reached with the unions in relation to further discussions on the wording of the waiver which workers will be required to sign in order to collect any further payment from the ex gratia fund. Any workers for whom the current payment is expected to constitute their full entitlements from the fund, i.e., staff with relatively short service, have been 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.

 148. Mr. Allen Information on Bernard Allen Zoom on Bernard Allen  asked the Tánaiste and Minister for Enterprise, Trade and Employment Information on Mary Harney Zoom on Mary Harney  the steps she has taken to compensate the workers of IFI for the ?25 million shortfall in their pension fund in view of the fact that her Department, as 51% shareholder, did not ensure that the full pension fund was available at the time of closure of the IFI plant. [24417/02]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney): Information on Mary Harney Zoom on Mary Harney Even though it is now over a month since the company announced that it was to close, the position in relation to pensions remains unclear. This is unavoidable given the complexity of pensions issues generally but it is unfortunate that there still appears to a lot of incomplete and sometimes conflicting information circulating at present in relation to the position of the various schemes covering IFI employees. Nevertheless, it is understood that the funds do face potential difficulties, which in the case of Belfast, seem to be particularly serious. For a number of reasons, such as the different regulatory environment, the position of the schemes covering workers at the other locations may be somewhat better.

However, I should point out that the problems seem to stem mainly from the impact of adverse [1023] stock market movements on the pensions funds investments which are managed by boards of trustees acting independently of the company. IFI has been meeting its obligations to the various schemes on an ongoing basis. The estimated statement of affairs presented by the IFI board at the creditors meeting showed that the company owes the pensions schemes just €178,000, which should be paid in full in due course because this debt ranks as a preferential creditor in the liquidation.

I am not aware of any obligations on the part of the government or on the part of ICI, the other shareholder in IFI, in relation to the pensions funds. It is clear that the uncertainty surrounding the state of the various schemes is giving rise to serious concerns on the part of employees, concerns which may or may not be well founded. Accordingly, it is critical that the trustees of each scheme 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. In this regard, the shareholders have, in the interests of establishing clarity, advised the trustees of each of the funds involved that they would like to be briefed on the trustees' current assessment of the position and their plans in relation to the future. I expect that initial briefings will take place within the next few weeks. Unfortunately, it seems likely that it will take some time for all the various issues involved to be clarified fully.

 149. Mr. Allen Information on Bernard Allen Zoom on Bernard Allen  asked the Tánaiste and Minister for Enterprise, Trade and Employment Information on Mary Harney Zoom on Mary Harney  if she will investigate the unfair dismissals of all the IFI workers in view of the fact that section 8 of the Protection of Employment Act, 1977, required that 30 days' notice be given which did not happen as the workers got one day's notice of dismissal. [24418/02]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Fahey): Information on Frank Fahey Zoom on Frank Fahey The statutory obligation under section 14(1) of the Protection of Employment Act, 1977, prohibiting collective redundancies taking effect before the expiry of the 30 days notification period, does not apply in situations of liquidation-winding up proceedings, court order or bankruptcy. Similarly, the obligation under section 12(1) to notify the Minister of a collective redundancy does not apply in these situations.

However, under section 6 of the European Communities (Protection of Employment) Regulations, 2000, an employee or a trade union, staff association or excepted body on behalf of an employee may present a complaint to a rights commissioner that an employer has contravened section 9 – obligation on an employer to consult employees' representatives – or section 10 – resulting obligation on an employer to supply certain relevant information regarding the collective redundancies – of the Protection of Employ[1024] ment Act, 1977. In these situations, the rights commissioner has the power to declare that the complaint was or was not well-founded, to require the employer to comply with the relevant provision of the 1977 Act, and for that purpose to take a specific course of action, or to order the employer to pay the employee compensation of a maximum of four weeks remuneration, or to exercise a combination of these powers.


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