Tuesday, 5 November 2002
Dáil Eireann Debate
That a supplementary sum not exceeding €12,489,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 2002, for the salaries and expenses of the Office of the Minister for Enterprise, Trade and Employment, including certain services administered by that Office, for the payment of certain subsidies and grants and for the payment of certain grants under cash-limited schemes.
In the absence of the Minister for Enterprise, Trade and Employment, who is away on official business, I would like to propose that the Dáil approves the Supplementary Estimate for the Department of Enterprise, Trade and Employment in the amount of €12.489 million. I thank the Whips for arranging Dáil time for the taking of this motion at short notice.
This Supplementary Estimate is needed to provide Nítrigin Éireann Teoranta with the funds which the two shareholders in Irish Fertilizer Industries, ICI and the State, acting through NET, have agreed to provide for ex gratia severance payments to IFI workers. We would wish to be able to make payments as soon as possible.
The Government and ICI believe that an orderly wind-down and liquidation is in everybody's interests and in an effort to support such an outcome we have agreed, even though there is no legal obligation to do so, to provide a sum of nearly €24.5 million to cover ex gratia redundancy payments to the workers. The State is providing €12.489 million or 51% of the fund, reflecting its shareholding in IFI and this is the amount for which Dáil approval is being sought today. ICI will be providing €12 million based on its 49% shareholding.
When combined with statutory entitlements, which will be payable by the liquidator, a total of nearly €32 million will be available for redundancy, which would be sufficient to provide average payments of over €50,000 per worker – a sum which is considered fair and reasonable in the circumstances. The exact terms for the distribution of these funds will be determined following discussions between the workers' representatives and Mr. Ray Jackson, who is being appointed as sole trustee of the trust being used for this purpose.
In addition to creating a significant fund for severance payments for IFI's workers, the State and ICI have responded positively to a particular  difficulty highlighted by the unions. Specifically, the unions have pointed out that workers laid off in recent days face the prospect of severe cashflow difficulties within a short period because the company was, unfortunately, only in a position to pay wages due up to the date of lay off. In addition, it has emerged that it is likely to take a number of weeks before statutory entitlements can be paid.
In this context, the Government and ICI have agreed to provide funds immediately, which will enable payments on account to be made. These interim payments will be based on the lower of €5,000 or three months pay. Most workers would then qualify for additional payments once the basis for the allocation of the funds available has been determined following discussions between the unions and the trustee, Mr. Jackson. However, the State cannot allocate any funding for this purpose without a Supplementary Estimate. Accordingly, it is imperative that the Dáil approve this Estimate as a matter of urgency in order that we can start making payments to the workers as soon as possible.
It is very much regretted that, despite the tremendous efforts made by IFI's board, management and workforce, the company could not survive. The board of IFI decided on 15 October last that the company would have to cease trading and that a liquidator should be appointed. It felt that it had no other option in the light of the financial position in which it found itself, particularly when the two shareholders in the company had indicated that they were not in a position to continue supporting the company in the absence of a realistic viability plan.
The shareholders had for some time made it clear to the board that such a viability plan would be a prerequisite for any further financial injections to the company on top of the considerable support provided during the years. Unfortunately, the company was not able to produce such a plan and instead sought funding of €10 million to enable it to continue trading in the short-term. Even then, the board accepted that the level of funding sought might prove inadequate. The shareholders were concerned that even relatively small setbacks to the plan in the short-term would inevitably result in further requests for support.
Following the board's decision, the wind-down of the business has been taking place. I take this opportunity to pay tribute to the professionalism of the workforce which has been actively engaged in the decommissioning of the company's plants in a responsible, safe and orderly manner. It is to be admired and congratulated for this responsible attitude.
The board of IFI has called a creditors meeting for Friday next, 8 November, in the Pavilion, Leopardstown, at which it is expected that a liquidator will be appointed. The liquidator will seek to realise the assets of the company in an efficient and effective manner with a view to satisfying the debts of the company to the maximum extent. The board will also present a statement of affairs  at the creditors meeting. This will give an estimate of the prospects for the payment of all creditors, including the shareholders, who had extended loans of €34 million to the company. It should be noted, however, that the actual position can only be determined with certainty when the assets of the company are realised. Both shareholders have agreed in principle to subordinate their loans to the company in favour of the other creditors.
With regard to pensions, the initial indications suggest there are serious difficulties with the scheme covering the Belfast workers. The position of the schemes covering the other workers remains unclear at this stage and it seems likely that it will take some time before the trustees of the funds can establish the full facts. Nevertheless, the position with these schemes may be somewhat better, although there may still be some problems.
It is obviously a matter of extreme concern that employees' pension entitlements may not be capable of being met by their pension funds. However, I understand the company has been meeting its obligations to the various schemes and that the difficulties stem mainly from adverse stock market movements rather than from any default on the part of the company. The recent stock market developments would have had a significant adverse impact on virtually all pension funds, although the level of this impact would obviously vary from fund to fund depending on the investment strategy followed in each case.
Pension issues are complicated and, clearly, the trustees of the various schemes will have to establish the full facts for each of the schemes and consider the range of options available to them to minimise the shortfalls that may be involved. Presumably, they will seek to maximise any possible recoveries from the liquidator or other parties. It seems likely that it will take some time for the various issues involved to be clarified.
In addition to the initiatives which the Government has taken in conjunction with ICI to provide financial assistance for the workers, the Government has been active in seeking to help the workforce find alternative employment. In this regard, the Tánaiste has ensured Enterprise Ireland, FÁS and the IDA have adopted a co-ordinated approach in response to the closure of the major IFI plants in Cork and Arklow. The approach is directed at assisting all employees affected by the closure and already under way. The co-ordinated approach has two objectives: first, to enhance and facilitate the future employment prospects of the IFI workforce and, second, to identify and support any individual who wishes to start their own business.
Mr. Walsh: The Tánaiste has also been in contact with her counterpart in Northern Ireland in  this regard. This programme of involvement is being delivered in Cork and Arklow by the regionally based staff of the agencies and co-ordinated by a selected senior executive in each agency. These supportive efforts have been agreed with the management of IFI, which is facilitating the process at both plants. Specific actions, both planned and under way, are as follows.
Enterprise Ireland has written to its client companies in the areas of Wicklow-south County Dublin and east Cork-Cork city advising them of the pool of labour that will become available shortly from the IFI closure. The letter outlines the range of skills involved and a contact point. FÁS held briefing sessions with management and trade union representatives on Wednesday, 30 October, in Cork, Arklow and Sandyford, the location of the company's headquarters, to give an overview of FÁS involvement with IFI employees in advising on future career development. These sessions included inputs from the Department of Social and Family Affairs and the Revenue Commissioners.
Starting this week, FÁS will register all IFI employees and give initial guidance interviews on career planning. On 13 November, the registration and interview process will be assessed and training and retraining requirements agreed with FÁS and IFI representatives. The IDA will liaise with FÁS on training course content to match the needs of recently announced start-ups and expansions of IDA companies in the affected areas.
“Start your own Business” seminars for IFI employees are also scheduled for this week in Arklow and Cork. These seminars are being conducted by Enterprise Ireland and county enterprise board executives and assisted by an experienced business mentor. Follow on, one to one meetings will be held where required and the full range of Enterprise Ireland and county enterprise board support will be available to all IFI employees wishing to start their own business.
This initial phase of the programme will give rise to an ongoing series of activities involving training-retraining of employees, individual counselling sessions and exploring potential new business ideas. FÁS will maintain the register of employees and track the outcome of the agencies' efforts on an individual basis.
While it is regrettable that the jobs in IFI could not be saved, the Government, in conjunction with ICI, has, even though there is no obligation to do so, agreed to provide a significant amount of money to fund ex gratia severance payments which are considered fair and reasonable. Steps are also being taken to mobilise the State's training and industrial development agencies in order to provide as much support as possible for IFI workers in their efforts to find alternative employment.
The proposal before the House will enable much needed interim payments on account to be made, pending finalisation of the arrangements for the distribution of the funds available for ex gratia severance payments. This should go a long way in alleviating any hardship that might otherwise arise from the incapacity of the company to pay statutory entitlements at this time. I ask the House to approve the Supplementary Estimate.
Mr. Hogan: The Fine Gael Party will support the Supplementary Estimate before the House. It is now becoming apparent that the Tánaiste, Deputy Harney, mismanaged the IFI company and the manner in which she announced the closure. She could be accused of total mismanagement or reckless trading under the Companies Acts. I base this assertion on the following points and questions which need to be answered.
IFI was returning a profit in September 2001 of £15 million but losing £35 million a year later. All the financial losses were incurred by January 2002. The accounts of the company reflect this. Was the Tánaiste aware of the financial re-forecast presented to the company last January which showed these losses for the year? The financial situation of the company began to deteriorate quickly in January and February 2002. Was the board of IFI and the shareholders aware of this financial situation and its deterioration? If the Tánaiste, as the major shareholder in the company, had this information ten months ago, she could have sought to implement a viability plan at that stage or made the decision to conduct an orderly shut-down of the company. Instead, that decision was made, with a day's notice to the workers and the company, some weeks ago.
By not taking action earlier this year, the Tánaiste and the board are responsible for the manner in which the company has been closed down, the way the announcement was made and the manner in which the creditors and workers were left in shock following the decision made by the Government and the Tánaiste. This was reckless. The losers are the 700 employees and the local economies of Cobh, Arklow and Belfast. I am told that Mr. Keogh, a pension adviser with AON, stated at a public meeting in IFI that the pension fund decreased by 20% in 2001 and by a further 20% since February 2002. The pension fund comprised a mixture of investment and stocks. If the company was deteriorating in January or February this year surely the pension contributions, which are there for the benefit of workers, could have been put into a more risk-free environment, such as cash and bonds, to eliminate the risk of further losses, particularly since February 2002.
Under company law the board of IFI has a duty of care to the stakeholder group, such as creditors, employees and shareholders. I contend that the board did not exercise that duty because no statutory notice was given, no statutory redun dancy was offered, holiday pay due was not considered, workers' pensions were put at risk and creditors, including hauliers, were left hanging in the wind due to this precipitous decision.
Even if we approve the motion for this Supplementary Estimate it will be some time before payments can be made. I hope the Government will make them as quickly as possible, otherwise many small creditors will go out of business. The Government should ensure that early payments are made and that no further unemployment will arise from this decision.
Will the Minister explain how, even though the financial position of the company was deteriorating last January and February, some €4 million or €5 million in capital investment was made at the time? This decision generated more creditors, yet brought no benefit to the company or its employees. The workers have been treated shabbily and the opportunity to make parts of the company viable was not considered properly. The case against the Minister for the manner she has handled this matter is damning.
Mr. Allen: If this was a private concern we would be seeking an examination of the company because what has occurred verges on criminal negligence. People who worked for 25 years in this company, some of whom are in their 60s and expected to retire shortly, now find that they will receive only 60% of their expected pension. It is incredible that such a situation was allowed to develop in a company, 51% of which was owned by the Government. I am seeking a full statement explaining how the pension rights of these workers – many of whom gave most of their lives to the company – have been eroded. Why have these people been left high and dry? All the Minister for Enterprise, Trade and Employment can say is, “Start your own businesses”. How would people react, however, if I returned to Cork and advised a 62 year old IFI employee to start his or her own business in a time of recession? It is callous and cold-hearted to suggest such a course of action, particularly as pensions will fall short of expectations.
Despite the fact that the Government has so many representatives in Cork city and county, it allowed this company to go down the tubes and the workers have been hung out to dry. It is despicable. It is another hammer blow for the traditional industries in Cork harbour, which have all but disappeared.
The Government allowed IFI to collapse, leaving the workers high and dry, as well as many business creditors who will now go out of business. The Minister for Enterprise, Trade and Employment should provide a thorough explanation to the House on how the IFI pension fund became so seriously under-funded.
Mr. Timmins: I thank the Minister for Enterprise, Trade and Employment for meeting a deputation from County Wicklow in her Department last Friday. The Minister's speech reads well and some of the things he pointed out sounded nice, but the reality is somewhat different. A short time ago, I spoke to an employee of IFI who had just over 30 years' service in the Arklow plant. He said he and his colleagues had first heard the rumour of closure from The Guardian newspaper. A few weeks later he was told not to come in on Friday because he was finished. When he went home on Friday he received a letter in the post notifying him of the plant's closure. If this happened in a multinational company with a boardroom in Denver, we would be banging the table and saying this is a terrible way to treat people. This happened in a company of which the Government is the main shareholder, yet the Government is trying to pretend it had nothing to do with it. We have heard much about the liquidator and the board of directors, but nothing about the majority shareholder which is the Government.
This Government is an uncaring one that has treated the IFI workers with disdain. The deal the workers are getting is inferior to that enjoyed by workers who left in the past when IFI was being restructured. It is a terrible way to treat people and it sends out a poor signal. It also puts the Government on a poor footing if it wishes to take action against a private company operating in a similar manner.
Although I have tried to tease out the matter, I have not received a satisfactory answer as to why a viability plan for the Arklow IFI plant was not received by the Department of Enterprise, Trade and Employment. The Minister of State should examine this matter. The Minister for Enterprise, Trade and Employment said she did not receive such a plan, yet the Government should have explored every avenue. What role does the Government-appointed inspector have in respect of producing a viability plan for the Arklow plant? An all-or-nothing effort appears to have been made, while areas of IFI that could have been saved were sacrificed to save someone's political hide.
Although it is regrettable that the Minister for Enterprise, Trade and Employment is not present, it is pertinent that the Minister for Agriculture and Food is here. Has he indicated any concern regarding the price of future agricultural inputs because there may be a long-term negative impact on the area?
Mr. Howlin: The Government is a majority shareholder in IFI, yet the way it addressed the company's insolvency was nothing short of shameful. In the short time available, I wish to deal with the specific issue of the Supplementary Estimate before us. The Labour Party will not be opposing the Supplementary Estimate because it is important that moneys be made available to Mr. Jackson to distribute it as quickly as possible to people who are being thrown out of work, many of them following decades of employment in IFI. Those who negotiated on behalf of the workers understood a substantial payment would be made available. On 17 October, the Minister for Enterprise, Trade and Employment stated publicly that Cabinet approval would be sought for a fair and reasonable redundancy package for IFI workers. It is my understanding, however, that no agreement has yet been reached on the scale and scope of such a package. The workers expected an interim package to come before this House which – as the Minister for Agriculture and Food said in his statement – would allow for immediate hardship cases to be addressed by a down payment on the package that was to be finalised by agreement with the unions. Given the Minister's speech and the precise sum in the Supplementary Estimate, however, it seems the Government has determined that €12.5 million, together with the statutory payments – a total of €32 million – is the full extent of the severance and redundancy package. I wish the Minister to make it abundantly clear if this is the Government's intent. Is this the final word? It certainly will come as a shock to those who believe that they are still in negotiations on the final package. They will be shocked to find that the Government has arbitrarily decided that it will fix the sum and this is the limit of the supports which are to be available. The Government, as the majority shareholder, has a unique responsibility in this case.
Let me deal briefly with the urgent issue of pensions. It was compulsory for the employees to join the company pension scheme and they paid 7.5% of their gross pay to the scheme. They were told year in, year out that there was a defined benefit scheme, that the money was there to pay a defined benefit and that everything was in order. It was not until ten days after the announcement of the company's liquidation that pensioners discovered that the employees' pension fund would be liquidated at the same time as the company and it is only now that they are discovering that the pension entitlements, which they thought were in good standing and which they were assured over the years were in good standing, may well not be in good standing at all.
With regard to pensions, the initial indications suggest there are serious difficulties with the scheme covering the Belfast workers. The  position of the schemes covering the other workers remains unclear at this stage and it seems likely that it will take some time before the trustees of the funds can establish the full facts.
What we want is not an investigation of the full facts but an undertaking from the Government that it will uphold its own responsibilities and ensure that a decent input of resources from the State to the pension fund will be made available to ensure that those people, who paid in good faith into a staff pension fund, will receive the benefit to which they believed and were constantly assured they would be entitled to. Has the Government said that it will not augment the pension fund unless there is a pro rata contribution from ICI in accordance with its 49% stake? We need to know where the Government stands on the severance package and the pension scheme and that is the clarity that I am demanding from the Minister for Agriculture and Food.
I wish to mention two other brief points. First, I wish to mention the devastation that this closure has caused. I represent the constituency of Wexford and north Wexford is greatly affected by the Arklow closure. My colleague, Deputy McManus, will deal with that in more detail, but the impact cannot be over stressed by us in the House. Arklow and north Wexford are already areas of severe unemployment and this is a body blow, and I know the situation in Belfast and Cork is no different.
This closure is also having a serious impact on the rail service. IFI was one of the most important freight customers of Iarnród Éireann and it is now being used as a justification for the downgrading and closure of some of the routes and the abandoning of much of the rail freight service. Those of us from the south-east who met with the Minister for Transport earlier today have an assurance that no decisions will be made by the board of CIE tomorrow regarding freight or any rail closures. Unfortunately my fear is that this is simply a delaying tactic until such time as the strategic report is available.
The knock-on effects of this closure are very serious for the south-east region as a whole, for Cork and for Belfast. Those issues must be debated in some detail in this House, but what we need as a minimum from the Government to deal in any fair or proper way with the hundreds of workers who are shocked by losing their jobs in the IFI debacle is clear assurances on where it stands regarding severance payments and their pension rights.
Ms McManus: Last Friday a small group of public representatives from County Wicklow met with the Minister for Enterprise, Trade and Employment, Deputy Harney. The chairman of Wicklow County Council, who came with us on that deputation, has lost his job as a result of this closure and the Mayor of Arklow town council has been affected directly as he is a service pro vider for that plant. That is an indication of just how dependent the town of Arklow has been on this particular plant. It was a very disappointing meeting. It was clear from the Minister's attitude, and the way that she indicated that the Government was closing down possibilities rather than opening them up, that this was a political decision made with ideological intent to get rid of a State enterprise.
The effect of the decision is to end the livelihoods of up to 400 people in Arklow and north Wexford. It has a devastating impact and it is only beginning to permeate the local community. As we were meeting the Minister, almost 100 people were leaving their jobs for the last time – between Thursday and Friday – with nothing more than the weekly wage in their pockets because of the circumstances and the lack of preparation for which the Government is responsible. It is only because of the good offices of the community welfare officer, who used his own discretion, that these people were treated with some dignity and respect. There has been a strong protest from the workers who came from Belfast, Cork and Wicklow and protested outside the Department of Enterprise, Trade and Employment about the redundancy arrangements.
It needs to be pointed out that when redundancy arrangements were made in the past, for example, in the Arklow plant, the deal that people got was a good one. It meant, however, that the people who were left behind had to take on additional responsibilities and duties. Those people who stayed on and committed themselves to the enterprise are now losing out and are getting a worse deal than their colleagues who left at an earlier date. That is unacceptable and it is simply wrong, particularly when the Minister indicated that she was committed to giving them a fair deal. If she means it, then the Government and ICI will have to come up with more money to put into the pool of money left for them.
Nobody expected the issue of pension rights to become such a central issue. It is quite extraordinary and disturbing that workers should be so vulnerable having contributed towards their pension funds. The Government has got to deal with this issue to ensure that people's rights are protected and not simply prevent it being addressed directly.
Mr. Boyle: In concluding his contribution on behalf of the Government, the Minister for Agriculture and Food, Deputy Walsh, tried to make the case that while the Government has no legal obligation to provide ex gratia severance payments, it should be acknowledged and rewarded for doing so. However, the Government, as a majority shareholder in IFI, has a responsibility  to make sure that the workers involved in these plants are given statutory notice and the necessary documentation in terms of P45 forms and RP1 forms, and the scandalous behaviour of the company, on behalf of the majority shareholder, is significantly at issue in the provision of these funds.
The Minister for Enterprise, Trade and Employment, Deputy Harney, has let herself down and has not fulfilled her responsibilities properly, not only as custodian on behalf of the people of the shareholding in IFI but as the member of the Government who is responsibility for making sure that employment legislation is not only put on the Statute Book, but implemented equally and fairly throughout the public and private sectors. She has let herself and the Government down to such an extent that I would argue that this should be a resigning matter, but it will not be.
The €12.48 million being approved by the House will not be opposed by the Green Party, but we oppose this being the only payment the Government intends to put forward. It is failing to live up to its responsibilities to the IFI workers. Not only is the €12.48 million not enough, it is only half enough. The workers have asked for payments of at least five and a half weeks wages per year of service. The proposed payment does not meet the likely shortfall in the pension fund.
Neither the Government nor the company has put forward a plan to deal with the safety risk arising from having a skeleton workforce at each of the plants involved. At Marino Point this weekend four people were on hand to supervise the 26,000 tonnes of ammonia in the two tanks. There are two compressors on each tank, one of those four compressors was faulty and the fail-safe for that compressor was a flare valve which was itself faulty. Any Estimate the Government puts before this House must not only take account of the redundancy and of the pension scheme entitlements of the workers but it must also take account of the environmental custodianship which has been maintained by a workforce which is skilled and committed despite years of under investment in the plant and machinery in the plants concerned. Neither the Government nor the Minister should be allowed to get away with this type of negligence.
The Minister has failed to acknowledge that the average age of the Marino Plant workers is between the middle and late forties. I am sure the ages of the Arklow and Belfast workers are similar. These people are coming to the end of their working lives and the alternative supports from FÁS and county enterprise boards which are being offered are insulting to the people concerned. The Government has failed to acknowledge that a decision was probably made nine months ago to close this business but the closure was postponed for political considerations connected with the general election of last June.
For these reasons, for playing loose and fast with people's livelihoods, for failing to put in place back-up plans to protect the legal entitlements of the workers and the environment of the areas concerned we should be debating, not a Supplementary Estimate for the Department of Enterprise, Trade and Employment, but a motion of confidence in the Department and its Minister.
Mr. Morgan: It was stated earlier that this House is not a crèche but some Ministers clearly think it is. The Government is telling IFI workers that Enterprise Ireland will help them to start their own businesses. Doing what, I ask? It will not be making fertiliser.
This token Supplementary Estimate is a sleight of hand and yet another example of bad faith, broken promises and bad practice by the Government, which should be setting the best possible standards as an employer. The workers who met the Taoiseach last Friday night left that meeting believing that today's Estimate was an interim and not a final payment. Yet, today we find the Taoiseach's promise of last Friday does not hold in the cold light of day.
This is but the last in a series of blows inflicted on IFI workers. Why were the workers in the Cork plant summarily dismissed with one hour's notice, their lunches left uneaten? Why are they not being paid severance pay? Why was no statutory notice given? Even worse is the state of the workers' pension fund, which has been shown to have a 40% shortfall. Has this fund been put in the care of the liquidator and if so, why? This Supplementary Estimate clearly does not deal with the pension shortfall. Given that it is the 51% shareholder, how does the Government propose to deal with this problem?
This week IFI workers are travelling to ICI headquarters in Britain, paying for their own flights, to negotiate with the other shareholder in the company. The workers have intimated that the Government has told them it will match any payment secured from ICI, which made profits of £569 million last year. Surely an Irish Government should take a more fair and honest stance and fulfil its responsibility as an employer? What example is the Government setting for the private sector?
In the context of the island economy where we need to show a just and prudent record as an employer, what example are we setting for Northern workers, who are also redundant and facing diminished pensions?
The Department's website has a new feature of an on-line redundancy calculator. One wonders how it calculates redundancy payments. If it is based on the recent track record of the Department the results would be very interesting and I hope the Minister for Finance was not responsible for formulating the calculator's programme.
Mr. J. Higgins: One would not wish to delay the setting aside of funds for immediate disbursement to workers in IFI in this unfortunate and  disgraceful situation. However, the arrangement being proposed here is an insult to the 620 workers being summarily dismissed.
The €25 million being set aside for the workers' redundancy packages contrasts in the most scandalous fashion with an incredible €238 million paid by IFI's parent company, Nítrigin Éireann Teoranta, in interest alone to banks between 1987 and 1999, on debts taken over in 1987 from IFI. Four or five banks have soaked this State owned company to the tune of €238 million in interest, not counting a single euro of principal, yet all we have left for workers is €12.4 million.
The political establishment is covering up this scandal. The Minister for Enterprise, Trade and Employment refused to answer my questions on this scandal two weeks ago and no one from Fianna Fáil will dare comment on why banks were allowed to rob the semi-State sector blind in this fashion. We now see workers being left with the crumbs of a few million euro. The media has not featured this scandal in the way it should. The truth about this Government is coming out with greater ferocity every day. It is a Government of deadly hostility to publicly owned industry. IFI could have been saved with imagination and proper investment and by diversity into natural fertilisers and composting. New and diverse products could have maintained this industry in public ownership.
This morning we heard that Iarnród Éireann, under the auspices of the Government, is preparing to let go 330 workers because it wishes to privatise sectors of its freight business. Redundancy payments are no recompense to workers and are, in general, entirely inadequate. Workers in the Irish Glass Bottle Company and Peerless Rugs brought this matter to public attention. The Wexford Electronic workers, after a lifetime of service, were left with the insult of half a week's wages per year of service. This is an outrage.
Those of us who have just heard in detail from the Minister about the uncertainty of the pension rights of IFI workers are absolutely staggered. It is incredible that workers in a company which is half in State ownership do not know their pension rights. This is unbelievable and a matter for which the Government must answer.
It is time for the leadership of the trade union movement to get out of the parlour with the Government and employers and give real leadership in the fight on these issues to get workers' rights and a different programme which will save companies in public ownership and ensure real levels of redundancy payments for workers if they are let go.
The situation in IFI has been well known for many years to anyone who looked at the financial background to that company. If we wish to be  truthful to ourselves and the workers we must accept that this is a highly cyclical industry which has had a number of extremely bad years. It is also true that, over the years, various Administrations of various political hues put significant funds into IFI and its predecessor, NET.
Much of the debate that has taken place in the House involved understandable political point scoring. Nevertheless, the reality has to be faced by Members. It is not true, as has already been suggested, that the situation was masked in the general election. In fact, it was in July, after the election, that the first rumblings of the current circumstances were heard.
Mr. Roche: With respect, I did not interrupt anybody in this House. If the Deputy is going to interrupt me he should at least be truthful. There is no process, this is not the House of Commons. This is Dáil Éireann and the Deputy should stop acting the fool when people's jobs are concerned.
Mr. Roche: The Deputy will have his moment. The reality is that a valiant effort has been made for months to get a strategic alliance with this particular company. The one player in the field, the Finnish company, pulled out, as everybody knows.
The case in which I am most parochially interested is that of the Arklow plant. I believe the Arklow plant has been pulled down by another plant, which is obviously operating under different economic circumstances. However, my major concerns are threefold. First, I hope the liquidator, going forward, will make a real effort to see if the Arklow plant can, with a minimal investment, be made viable again. It should be kept up and running. I have already discussed this with officials. If the liquidator seeks, rather than to simply sell off the plant in a fire-sale, to look for some sort of strategic alliance, something could be done.
I am concerned about the points being made in the House about the pension fund, not least because my constituents will be deeply worried by some of those allegations. Members know what the situation is with regard to a pension fund. A pension fund is in the control of the trustees. As it happens, the trustees of the pension fund in the Republic have done a very good job. There are two separate pension funds in the Republic, one of which is well insulated. The other, which is over-subscribed, has a problem because the equities, which are part of that fund, will have to be sold or turned into annuities, as Members who wish to be truthful will know.
There are a couple of possible points I want to raise, one of which I have already raised with the Minister, namely, that a number of issues could and should be done. The IFI workers in Arklow are currently subject to a programme that will lead to retraining under FÁS. I ask that that be brought forward and that the staff be made fully cognisant of what exactly is planned.
Second, in the case of Arklow, we have an enterprise centre which has already been cleared for over €750,000. It will need a further injection. I ask the Minister to be as generous as possible in that regard and to do everything that is possible with Enterprise Ireland.
IFI and all other companies operate in a particular economic environment. I wish that IFI were not going to the wall, but it is, and the circumstances have been well flagged for many years. All the political hand-wringing in the world will not resolve the particular problem.
I welcome the package that is being put before the House. In so far as there is any surplus on the liquidation, I hope it will be set aside and used to the benefit of the workers. As has probably been mentioned by other contributors, there are probably small creditors involved. Certainly, there are many people involved in the transport operation in Wexford and Wicklow. I ask that the financial institutions show forbearance. It is clear that the liquidation funds should be more than capable of meeting all the outstanding creditors, with the exception of the shareholders. With some common sense and prompting from the Department, the financial institutions could be asked to exercise a little more understanding and some patience in this regard.
Mr. M. Ahern: I thank Deputy Roche for allowing me some minutes of his time. Together with Deputies Roche and Walsh, I commend this  Estimate to the House. There are immediate problems facing the employees who were let off last week without any payment. We are dealing with this Estimate to provide a forum or system whereby they can receive a payment. As the Minister said in his speech, the amount to be paid will be the lower of €5,000 or three months' pay.
A question that was raised by many employees related to the trust deed set up to allow this to be proceeded with and they felt that they were signing away other rights for which they might wish to fight. The trust deed has been modified so it now reads such that people will sign it, but all that will be set off will be the amount of money they will get from the future funds that they will receive.
Mr. M. Ahern: That is their choice. They will not get the money. All they are signing is a form to accept the money. They are not signing away any other rights. It serves as a receipt to show they are getting the money.
Concerns have been raised that people who are offered jobs would not be able to take them up if they did not get redundancy forms, so we have been in touch with the liquidator to ensure that any individuals who have an offer of a job will be treated preferentially. Those employees should inform the liquidator immediately of that position.
I hope the liquidator will make a success of this liquidation, that he will have a surplus and that this surplus will be available to provide extra funding for the employees and any of the other creditors who may not be paid during the liquidation. I am glad that the agencies are actively involved in aiding the employees who have been, and will be, laid off. Enterprise Ireland, FÁS, those involved with social welfare and county enterprise boards are actively involved in helping people with their difficulties and trying to get them new jobs.
The cost of decommissioning has been mentioned frequently. I understand that the liquidator feels he will be in a position to sell the plant and that whoever will purchase it will be required to dismantle it at his or her expense. Thereafter, the question of the clean up of the area arises. From an environmental report that has been prepared, I understand that the cost of cleaning up will be in single figures and minimal in the context of the total value of the site in question.
Furthermore, I commend the fact that the Government has, in principle, decided to subordinate loans of £34 million to the company in favour of other creditors, which means that there will be more funding available, in principle, for the payment of creditors. This will be of immense benefit in terms of the payment of creditors and employees.
Mr. Stanton: This is a terrible mess and as the main shareholder, the Government must take responsibility for it. Some of those employed at IFI gave a lifetime of service to the State, yet they were given less than a day's notice of the closure of the company. They were told to pack their bags and leave. A worker told me it was more or less a case of lunch boxes being left in the fridge.
The Minister of State at the Department of the Taoiseach, Deputy Roche, who is no longer present, told the House that problems at the company were known about for years, but he went on to say that nothing was known until recently. I do not know how he can reconcile those statements. It appears the problems came to a head last January when it became known that the company was in serious trouble. However, the minor matter of the general election had to be held before action could be taken.
The proposed redundancy settlement provides, on average, for a payment of two and a half to three weeks' wages for every year of service, which is considerably less than the norm. The workers are seeking five to six weeks' wages for each year of service, which would be more usual. A lump sum payment of €50,000 is not a large amount, especially to those who will probably never work again. The job market in the east Cork area for workers of that age is not good. I submitted a parliamentary question to the Tánaiste and Minister for Enterprise, Trade and Employment on the position regarding the workers at ISPAT. She indicated that 75% of those who wanted employment got jobs, but many of those are FÁS training jobs and could not be described as real employment.
Will the Minister outline what will happen to life insurance cover and to cover for spouses, which is removed when the pension scheme is closed? The workers received letters last week informing them they were without jobs. Will the Minister indicate if this means that, legally, they are unemployed? They did not receive RP1 or P45 forms, but merely a note telling them to leave. That is not good enough. Will the Minister indicate if they are or are not employed? There are those who maintain they are entitled to their wages because they are available and willing to work but have not been officially dismissed. Will the Minister outline their status?
The Minister of State, Deputy Michael Ahern, indicated that the liquidator will look after those employees who get job offers. What is his role in their getting employment? Prospective employers, of whom there will be very few, will seek P45 or RP1 forms. Mention of the role of the liquidator is more of a smokescreen.
Mr. Stanton: They have not received them. Why was action taken in this manner? I believe the employees are entitled to be paid until such time as they receive their RP1 forms because they have not been officially dismissed. Will the Minister explain why the Government is putting them on the dole when it should be paying them?
I hope the amount of money being made available is only a start and I plead with the Government to ensure more money will be provided. It sets a bad example to the private sector if this is how the Government, as the main shareholder in the company, treats the workers. How can a Government credibly tell private sector employers not to treat their workers in a similar manner?
The protection of employment legislation provides that workers who are made redundant should be given some form of notice. I was under the impression that the Government would act under its own rules, but this is not happening. Many of the workers had life pensions. Will the Minister indicate what will happen to them?
The workers and the company worked very hard to try to keep the company open, but the Government pulled the plug without warning. They held meetings with the Minister for Enterprise, Trade and Employment in good faith. They were trying to cut costs and were willing to negotiate some redundancies. It augurs badly for the future for State employees or for anyone involved in negotiations with the Government. If negotiations are under way with the Government it should at least have the courtesy to tell those involved that things will not work out. I hope the Government will do the right thing by the workers and at least double the amount of money it is proposing to make available.
Mr. Coveney: I thank Deputy Stanton for sharing his time. The workers at the IFI plant at Marina Point in Cork – they are the ones I know best – have been treated disgracefully. It is even more disgraceful that with the Government as majority shareholder, the company acted in the way it did in what has been described this evening as an orderly wind down of IFI, a description I find difficult to accept.
Let me outline what the workers had to put up with. Most of them read in a British newspaper that IFI was closing down. They were not even given the courtesy of a telephone call. They got no warning of the closure and there was no statu tory notice. They were not even given the time to put a rescue package together.
Mr. Coveney: It is. The workers asked for a two week period to finalise a rescue package for presentation to the Minister for Enterprise, Trade and Employment, but they were not granted even that. That aspect was debated with the Minister in the House a number of weeks ago.
The workers were laid off with no payments except for their up to date wages, which I am not sure even included holiday pay due to some of them. No RP1 forms were issued, which makes it almost impossible for them to quickly secure new employment. I am not sure it is legally possible to secure new employment without those forms, yet they still have not got them. No statutory redundancy was agreed and as far as I am aware, even the redundancy fund that is now being proposed is being strongly opposed by workers who are very unhappy with it. They have been laid off and nothing has been agreed.
To add insult to injury, the workers cannot even ascertain the facts about the current position of their pension fund, to which they have contributed for years. The Minister of State at the Department of the Taoiseach, Deputy Roche, told the House that all Members, if they are truthful with themselves, are aware of the position regarding pension funds which, in this instance, is the responsibility of the trustee. The Minister stated, “The position of the schemes covering the other workers remains unclear at this stage and it seems likely that it will take some time before the trustees of the fund can establish the full facts”. We have known for months that IFI was under threat of closure, yet it is only now, after the workers have been laid off, that we are trying to establish the facts regarding the pension fund. That is how the Government has treated workers who have given 25 or 30 years to a State-owned and State-run company. It is a disgrace.
I wish to reinforce a point made by Deputy Boyle regarding the 26,000 tonnes of ammonia currently stored in IFI with only four people responsible for it. That is an awesome responsibility should anything go wrong. IFI workers said in a Cork newspaper yesterday that they would work free of charge to ensure that the necessary safety precautions are in place to look after the ammonia. Does the Government plan to put a more comprehensive and structured package in place to ensure we do not have an environmental catastrophe in Cork harbour?
Mr. N. O'Keeffe: I welcome the opportunity to contribute to this debate. This is a very important and sad matter for my constituency due to the job losses. I pay tribute to the workers for the orderly manner in which they are doing their business even though they have been thrown on the scrap heap at short notice. I met them on three  occasions and am proud to be associated with them. Sometimes in such situations things get rough and Deputies on all sides get blamed, but on this occasion the workers have been well behaved.
The safety aspect is of major concern to all in the area. Will the Department of Enterprise, Trade and Employment ensure that the statutory requirements in regard to health and safety are put in place? We have seen a breakdown in the pension trust which was regulated by the Department of Social and Family Affairs. There has also been a breakdown in the area of labour and employment law which is regulated by the Department of Enterprise, Trade and Employment. Such lapses are serious as we in this House pride ourselves on putting legislation through that is for the common good. In this case all of the regulations appear to have collapsed.
It is imperative that the issues of the remaining liquid ammonia and the six large vessels which contain various catalysts be addressed. I am not a scientific expert but I understand that the potential dangers could have devastating effects for residents of the area and across the harbour. Such threats to the area existed in the past due to a lax approach to the regulations.
The uncertainty which prevails is a cause of grave concern. I understand that a creditors' meeting is planned for Leopardstown racecourse on Friday, 8 November. I inquired as to why Leopardstown was the chosen venue and was told that the expected crowd would be so large that the legal requirement would not be covered if some remained outside due to a lack of space to accommodate them. The workers will be on one side and the service industry will be on the other. Many people in the constituency are in grave financial difficulties and there is no point in appealing to the financial institutions because they have their own businesses to run. People who have diggers, tractors and loaders, hauliers, mechanical workers and the service industry generally were employed in that area and they are now in dire straits. If these people's problems are not addressed they will have no choice but to go to the wall, which is unacceptable.
I am also concerned about the progress that was being made in the area of rail development with the proposed extension of the Cork railway line to Carrigtwohill and probably Midleton and Youghal. I understand that the railway line from Cobh could be at risk and I seek clarification on the matter because it is basically a passenger service. Many years before I came into this House the railway line was also at risk but the development of industry in the area gave it a status and recognition that kept it maintained over the years because of the transport of ammonia and various materials and goods to that industry.
I obtained a copy of the FÁS document distributed at Marino Point. While I do not wish to criticise it, I did not see how it offered much hope to the IFI workers. Apart from a stated commitment to help those recently made redundant, there was  no immediate offer of help. No jobs were on offer and courses were not even available. What kind of hope was that to hand out as a preamble to filling in FÁS forms? The document professed a commitment to the redundant workers but in reality I do not see much future for workers in their 40s or 50s. The meeting was no more than an exchange of views and an opportunity for workers to ask questions.
I welcome the Minister's announcement of €20 million which he claims will give an average payment of €50,000 per worker. I understand that the average private sector redundancy payment is in the region of €80,000, which indicates a shortfall for those unfortunates who have given many years to this company. It is many years since Jack Lynch, God be good to him, opened that plant in 1979. That was a flagship day for the constituency of Cork East and we now see its demise.
Deputies who do not have their tax clearance certificates are faced with expulsion from this House. If we make an error we have to go before the Public Offices Commission. Where are the people who ran this business and who is going to challenge them?
Mr. N. O'Keeffe: It is about time that the legislation we put in place was enforced. The pension fund which we heard so much about over many years and which is so important to people, is in crisis. It is at 1996 levels of investment – which is not bad by any standards – but are there any other irregularities? If anyone in the private sector made someone redundant with the kind of notice seen in this case he or she would face the severity of the courts and would appear before the Employment Appeals Tribunal as well as the many other issues that would arise. Look at the difficulties that arose with Irish Shipping and the problems surrounding the difficulties with the privatisation of Irish Life. Other parties were in Government at that time.
The consultant's report on the viability of the plants should be made available to this House. I understand that it states that Arklow and Belfast are viable but the Cobh plant is not. They will be sold off. Cobh will be sold at scrap value and that will not be enough to clear up the site and make it viable once again. Let there be no doubt about that. It would not be possible to pay someone to take it for scrap and dismantle it. We have two plants for sale which will probably be sold at a knock-down price. I do not want to cause disillusionment because these workers are decent people and many of them are supporters of my party and helped to put us here. The dismantling of the plant is one thing but the asset value is not going to exceed the liabilities and let no one tell me otherwise. I have been around for long enough and know how these things work. We will be faced with a situation where the liquidator will not have sufficient funding to complete the job. The workers are on one side and the service  workers are on the other side, and there may be other people I do not know about.
I make an appeal that we rescue this situation. We are the people with statutory control of the country. I am a Government Deputy and the Departments of Enterprise, Trade and Employment and Social and Family Affairs have an obligation in regard to pensions and labour law and so on to keep the House in order.
Minister for Agriculture and Food (Mr. Walsh): I thank all Deputies who contributed to this debate and who have considered the matter from a position of concern with regard to the workers on what has developed so abruptly. I will take individual expressions of concern back to the Minister for Enterprise, Trade and Employment and make sure they are followed up, particularly in regard to the safety issues which were raised by a number of Deputies. My understanding is that safety precautions are being adhered to, but if there is some local knowledge that this is not the case, I will convey that to the Department.
As I outlined in my opening statement, the Government is taking a number of positive steps to help IFI employees. One of the concerns raised by the unions was the fact that employees were only paid up to the date of the collapse of the company and were then left without any income. I thank the House for facilitating this motion by agreement which will allow an interim payment of at least €5,000 for each worker on account so that they will have some cashflow. This initiative is being taken in response to the concerns of unions. The Government and the ICI have agreed to provide approximately €25 million to cover ex gratia redundancy payments to the workers and, together with their statutory entitlements, the total payable to them will be approximately €32 million, which equates to €50,000 per worker.
Mr. Walsh: Yes. It is tragic that this has occurred and that the company's board decided it had no option in the absence of a realistic viability plan but to close the company. However, the company had a troubled history and over its lifetime the Exchequer under different Administrations invested €750 million in the company.
Mr. Walsh: The Government is concerned about the company's creditors and various transport and service companies have been mentioned.  Their position can be determined only in time when the company's assets have been realised and the statement of affairs, which will be presented to creditors on Friday, will give an indication of what can be expected. The Government and the shareholders have agreed in principle to subordinate their loans amounting to £34 million to the company in favour of the creditors, which will significantly improve their position.
With regard to pensions the trustees of the various schemes must establish the full facts and that may take time. The shareholders made their contributions to the schemes but the equities involved have reduced in value. The equities will be converted into annuities.
Mr. Walsh: There is work to be done to make sure the full facts are known but the trustees must consider the range of options available to them to minimise shortfalls that may arise. The position in this jurisdiction is much better than that in Belfast.
Mr. Walsh: Hopefully, an adequate amount will be available. It will be a matter of extreme concern if employee pension entitlements are not capable of being met by their pension funds. I understand the company has been meeting its obligations to the various schemes on an ongoing basis and, in addition to the initiatives which the Government has taken in conjunction with ICI to provide financial assistance to workers, the Government has been active in seeking to help the workforce.
The proposal before the House will enable much needed interim payments on account to be made pending the finalisation of the arrangements for the distribution of the funds available for ex gratia severance payments and this should go a long way to alleviating serious hardship. The House has been extremely helpful in these difficult circumstances by allowing for the provision of this Supplementary Estimate.
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