Thursday, 12 December 1985
Dáil Eireann Debate
Mr. O'Kennedy: And at Castle Brand Limited, Nenagh. I regret that the Minister for Labour is not present. I do not have anything but respect for the Minister for State who is in the House but I had hoped that the Minister for Labour who has been dealing directly with the matter would have been able to give me the up to date position on what is now a very urgent and tragic problem. I hope the Minister of State will be able to give me the necessary information.
On 8 October 1984 Castle Brand Limited, Nenagh went into liquidation. At the time approximately 130 long serving members of the staff who had been contributing to a pension fund, many of them for as long as 40 years, found that not only were their jobs gone but their pension rights also. After that event we pressed the Minister at considerable length in the House to ensure that the legislation he proposed to introduce would protect the pension rights not just of the workers of Castle Brand but of others who would find themselves in the same position due to the increasing spate of liquidations. A similar issue arises, unfortunately, in respect of the former employees of Roscrea Meat Products in my constituency which is now in liquidation.
I will have to deal with the factories separately but I should like to draw a  common thread between them in the first instance. The two cases have a lot in common. The employees in both concerns had in many instances been working in the plant for 40 and 50 years. Anybody with any knowledge of the workers, male and female will recognise that their commitment over the years was of a standard that we are all encouraging workers to reach. When the blow came in each case the issue arose as to whether those men and women who had contributed for more than 40 years — in one instance 50 years — would have any pension rights at all.
Although I am referring to the two factories my general comment would apply in justice to all such cases and there are far too many of them emerging these days. I want to ensure that the House and the Government discharges their responsibilities in this regard and see to it that justice is done. With regard to the Castle Brand issue I should like to point out that since 8 October 1984 many groups, including workers and public representatives, met the Minister for Labour on numerous occasions and pleaded with him to ensure that in every way possible under existing legislation and, if necessary, under new legislation the rights of the workers would be protected. He was also asked to ensure, if necessary, that those who may have been responsible for under funding of either fund — for some time in the case of Castle Brand — would be made amenable to whatever legal action was required.
I pointed out in the House that the legislation which the Minister introduced almost a year ago, the Protection of Employees (Employers Insolvency) Act, was totally and utterly inadequate. We pleaded with the Minister not to confine the compensation rights or the ministerial obligations in this instance to 12 months refunding of pension contributions. We pleaded with him to ensure that he did not tie his own hands and limit the compensation rights of the workers I am referring to. Unfortunately, our please did not succeed. The two elements in Government defeated our motion which  sought to extend the liability of the Minister to a period of more than 12 months.
We find that since then, and after visits to Dublin by many people in their own time, and visits to Nenagh by the Minister on more than one occasion when he gave bland general assurances such as, “I am determined to help”, “I have the resources and I will see that you are looked after”, “Leave it with me and it will be done”—some of those assurances were given in my presence — that the issue is one on which the Minister is and has been seeking the legal advice of the Attorney General as to his rights or obligations. I will not make any comment on the Attorney General who was appointed by the Government following the recommendation of the Minister's party, an appointment which gave rise to some surprise in view of his relatively junior status and lack of constitutional experience.
Mr. O'Kennedy: The hints, suggestions or words to Deputies of his own party suggest that the Minister is waiting for the view of the Attorney General on legislation he put through the House. That is totally unacceptable. The Government, who put the legislation through, should have consulted their legal advisers before introducing it and should not now be sheltering behind the fact that they are waiting for advice from their law adviser. Apparently, the question is whether there was a formal trust deed, whether there is a legally constituted trust document. From my contacts with the workers, and the current trustees of Castle Brand, I have learned that that matter is exercising the mind of the Attorney General and the Minister and  will do so for a considerable time. Meantime the workers, and their families, who are frustrated must wait a while longer.
The Government should not have to rely on whether there was a formal trust document before compensating workers who had contributed to a pension fund. A pension fund was in existence whether or not there was a legally constituted document. The real issue is whether the Government, or the Minister, are suggesting that there was no pension fund scheme. If that is the case it is time they said so. Will they now tell us that those men were contributing to a vacuum? The Government should recognise that the workers and their families have suffered a lot. I know many of them very well. I should like to give an indication of the frustration and bitterness in my home town. I mentioned to a personal friend of mine, who had been an employee in the factory for 45 years, what I thought was the tragic case of a man who had been employed there for more than 50 years, a person I knew since I was a small boy. That man could have gone on pension a month before the firm went into liquidation but decided out of loyalty to the concern that he wanted to be the first and, perhaps, the only one, to serve from the beginning to the end and did not go on pension. He did not go on pension and two or three weeks later he had nothing to recover. I mentioned that tragedy to a fellow worker of his perhaps five years younger and understandably he felt that my only concern was for the older man and he was quite embittered. We all share concern with every single one of these people.
What at this time is the Minister going to tell us? The trustees of the pension fund now appointed by the court do not know the position: I understand that they wrote to the Minister in September and received a very waffling reply pointing out all the inquiries being made about the legal position. What we heard, as conveyed by the Minister's colleague, the Leas-Cheann Comhairle, at a public meeting of the county council in North Tipperary, seems to suggest that it is not the Minister who is delaying matters but  the Attorney General, as if the Attorney General were not appointed by the same Government from the same party. This is a collective responsibility of Government. What is the exact position now and what precisely does the Minister propose to do? What exactly does he want to tell the workers of Nenagh, their families and dependants — incidentally not just the workers but the whole community who feel outraged at this whole situation. They are appalled that men whom they have respected so long are being deprived of their rights.
In that context, let me turn to the situation in regard to Roscrea Meat Products. I have to acknowledge that I am not as yet as familiar with the position there, apart from meeting a number of workers who are expressing the gravest possible concern about the position in which they find themselves now that that firm have gone into liquidation. There are over 200 employees and, like their counterparts in the neighbouring town of Nenagh, these men have worked with the firm for years and are part and parcel of the place. They took pride in being a part of the firm. A number of them asked me to find out the position in relation to their rights under the pension fund and what the Minister is proposing to do, what protection, if any they are going to get in the events that have emerged. In the light of what he and his advisers must know about the position in Roscrea, will the Minister please disclose to us as fully as possible what information he has in relation to that pension fund also and what indemnity will be available for the former employees of Roscrea Meat Products? I assume the Minister will be aware of the circumstances there; if not I would be amazed. I assume that he will be concerned.
I acknowledge that the Minister and the Minister of State present in the House and their advisers are concerned, but concern alone is no good without effective action under the law. If that action has to be to pursue those who are at fault in order to protect the workers who contributed over the years, let that be done. If that action requires that the Minister  should reimburse the fund, let that be done to whatever extent is necessary, but done it must be. As we talk here, the bitterness and frustration felt in these two towns, the impact which they are having on families and the tensions they are bringing about are unbelievable. Here we are, 14 months later, still getting only general explanations about consultation with the Attorney General and no action.
I want to allow the Minister the opportunity to give me the up to date information and, it is hoped, some news of action at this late stage. If we are all going to demonstrate that the most fundamental obligation we have is to protect the rights of workers, not alone to employment — although that is important — but also to the benefit of their own contributions, it is time that we were seen to act. Let nobody tell me that we are going to pay them back 12 months' worth of their contributions. That is not anything like the justice that is required. What exactly are the proposals of the Minister in both these areas? I hope that the necessity for me to raise these matters again in this House will not arise.
Minister of State at the Department of Labour (Mr. G. Birmingham): Deputy O'Kennedy has regretted the absence in the House of the Minister for Labour. Nobody regrets that absence more than the Minister for Labour himself. This is an area of his responsibility to which he has paid particular attention and throughout the period during which he has held office it has been one of his priorities. I know that he would have been very anxious to be present in the House for this debate. Throughout his period of office he has taken an interest in the general question of protecting the rights of employees in insolvency situations.
As Deputy O'Kennedy has acknowledged, in some of the specific areas to which he has made reference the Minister has been very actively involved. I must say that his reference to those specifics and the Minister's involvement were more than a little churlish.
An Ceann Comhairle: ——that there is not much point in Deputies bringing this House into session on the Adjournment and asking many question of Ministers and then proceeding to interrupt. This is happening far too often.
Mr. G. Birmingham: I know the Deputy shares as I do, the concern expressed in this debate, at the number  of Irish firms which have gone into liquidation in recent years and the hardship that has been caused to workers, their families and others in their community where those firms find themselves unable to meet their commitments.
The Deputy will appreciate, as will other Members of the House of course, that the powers which are on the Statute Book to justify an intervention in these areas are some what limited and that the employers concerned have the primary responsibility in any given case of ensuring that workers' rights are fully protected in the operation of their business. Any complaints that are made by workers, by their trade unions, or their representatives, that the floor of minimum rights conferred by our legislation and initiated over the years by my Department is not being observed are immediately and fully investigated by my Department and arising from that, employers are brought to court if necessary in order to ensure full and adequate compliance with the corpus of relevant labour legislation.
However, in the case of liquidation of firms the very insolvency of the employer does, of course, present difficulties in taking legal action to enforce the workers' rights under labour legislation. As the House will be aware — and Deputy O'Kennedy made reference to this in the course of his contribution — just about a year ago legislation was introduced, the Protection of Employees (Employers' Insolvency) Act, 1984, which makes provision for the payment of a range of workers' entitlements direct to my Department in the event of an employer's insolvency. These include: wages, arrears of statutory minimum wages, holiday pay, sick pay, entitlements under the Anti-Discrimination (Pay) Act, 1974, the Employment Equality Act, 1977, the Minimum Notice and Terms of Employment Act, 1973, the Unfair Dismissals Act, 1977, and unpaid contributions to company pension schemes. My Department have already this year paid out from the redundancy and employers' insolvency fund a total of £3.53 million to meet workers' claims for  unpaid wages, holiday money, minimum notice and so on.
Mr. G. Birmingham: I thought I was not going to be interrupted. The Protection of Employees (Employers' Insolvency) Act does not provide for full funding of occupational pension schemes. The cost of that would be incalculable or certainly astronomical. The Act does provide for the reimbursement from the redundancy and employers' insolvency fund of unpaid pension contributions for 12 months preceding insolvency. There are difficulties about establishing what the appropriate rates of contributions should be. Those difficulties are particularly acute in the case of one of the firms mentioned by the Deputy. In addition, all redundancy payments due by employers to workers which remain unpaid because of the employers' insolvency or any other reason are paid by my Department direct to the workers. A total of £5.7 million in such payments was paid last year.
In the case of Roscrea Meats, my Department have not received any current complaints regarding breaches of legislation in that firm in regard to workers' rights. Notice has been received from the liquidator regarding his proposals for terminating the employment of workers on grounds of redundancy. Should those redundancy entitlements not be paid by Roscrea Meats then they will be paid by my Department. As of now, no application whatever has been made to my Department under the insolvency Act for payment of any other unpaid entitlements of the workers concerned. In the hypothetical event of any such application being received it will be dealt with expeditiously.
In regard to occupational pension schemes in firms which are insolvent, the 1984 Act provides for payment to the trustees from the fund of the amount deducted from the employees' remuneration in respect of contributions to an occupational pension scheme during the  12 months prior to the employers' insolvency but not paid into the scheme and either the outstanding amount due to be paid into the scheme by an employer on his own behalf during the same period or the amount certified by an actuary to be necessary to pay the benefits provided by the scheme on dissolution, whichever is the lesser amount.
Mr. G. Birmingham: The 1984 insolvency Act does not provide for full protection of such pension schemes. As indicated last year when that Act was being debated in this House, the general question of protection of occupational pension schemes was under consideration by the Minister for Social Welfare. The Deputy will be aware from newspaper reports that certain developments in that area are imminent.
The Castle Brand case is an area of considerable complexity and I understand that proceedings are now before the High Court in which the liquidator seeks directions. The Deputy may correct me if that statement is inaccurate. The trust deed governing the occupational pension scheme had not been completed and no specific contribution rate was provided for. In those circumstances it has been necessary to seek detailed legal advice as to the amount payable from the fund. It is a matter of complexity but it is not appropriate to suggest that all the blame rests on those who have to wrestle with that complexity.
Mr. G. Birmingham: I think the issue before the court relates only to a particular group of employees. It is not altogether fair to bemoan the difficulties of  responding to a complex situation while not accepting that those who contributed to the creation of that situation must carry some of the responsibility. That includes those who offered their services to act as trustees. All such must carry some responsibility for the complex situation in which we now find ourselves.
Mr. G. Birmingham: I am not talking about anyone in particular. Anyone who allowed the complexities to develop must carry some responsibility. The Deputy can consider for himself who might find themselves in that category.
Mr. G. Birmingham: Given that we have a complex situation, how do we get out of it? I am not sure whether the Deputy is aware that a pension consultant has recently been appointed to bring his professional talents to bear on the matter and he will of course have regard to the submissions of the trustees and the liquidator. I am pleased to say that the liquidator has promised full co-operation in making available whatever documentation is available in relation to the pension scheme in the company. I am hopeful that in the near future the information necessary in order to make a decision on the application for payment of funds from the redundancy and employers' insolvency fund will be ascertained. Representations have been received, including those from the trustees. I pay tribute to them and to those who have articulated their case. Representatives of the trustees have already had an opportunity of putting their case to the consultant at a meeting in the Department's offices this morning.
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