Adjournment Debate - Job Losses

Thursday, 14 April 2011

Dáil Éireann Debate
Vol. 730 No. 2

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Deputy Tom Fleming: Information on Tom Fleming  Zoom on Tom Fleming  I thank the Ceann Comhairle for giving Deputy Arthur Spring and me the opportunity to bring this matter before the House. I welcome the Minister of State at the Department of Enterprise, Trade and Innovation, Deputy John Perry.

This matter relates to the future of the 116 employees of the Aetna company in Castleisland who have been involved in consultation talks with the company for the past month concerning salvaging jobs in the company and proper remuneration of employees who might be affected by job losses. Aetna Incorporated is a US Fortune 100 company with headquarters at Hartford, Connecticut. The net profit of the company in 2010 was $1.8 million and its net profit in 2009 was $1.4 million. It has a worldwide workforce of 34,000.

The company has been operating out of its Castleisland base for the past 23 years. It is a highly successful operation with a highly skilled and dedicated workforce. During the consultation process the company held eight meetings with the employees’ representatives over a 30 day period. After those meetings the company has made a paltry offer of redundancy payments amounting to two weeks pay per year and a lump sum of six weeks pay. The employees requested the Labour Relations Commission, LRC, to intervene. The LRC has written to the company inviting it to participate in talks immediately.

At this stage, time is of the essence. I urge the Minister of State, Deputy John Perry, and the Minister, Deputy Richard Bruton, to intervene and get Mr. Kieran Mulvey, the chief executive of the LRC, to appoint a chairperson as quickly as possible to resolve the current impasse. The victims are the employees of this company.

Deputy Arthur Spring: Information on Arthur Spring  Zoom on Arthur Spring  I echo the sentiments expressed by Deputy Tom Fleming. To put this matter in context, in 2008 Aetna celebrated the 20th anniversary of its presence in Castleisland. At the time, the president of Aetna Global Benefits, Martha R. Temple, said the Castleisland facility had gained an excellent reputation within Aetna as having a highly skilled and productive workforce and said: “we ... mark our 20th anniversary in Ireland with this expansion and a clear commitment for the future.” That was only three years ago and the company’s profits last year rose by 25%.

We now have a highly skilled, educated and motivated workforce which has worked in a place where not only was there an ethos of diligence, but there was no drama. The workforce performed in a manner that can only be described as exemplary. It is something that should be emulated in the region, which is now an unemployment blackspot.

A consultation process has taken place. The Deputies from north and south Kerry and west Limerick have met with the company’s representatives but it appears that the job losses are a fait accompli. If this is the case, the consultation period should not be continued for a further [274]two weeks as this will only give the company the means of smoothing the transfer, which is a global strategic change for the betterment of its balance sheet and no other purpose. It is at its peril that the company risks losing a skilled workforce and outsourcing its business to China, India and elsewhere, which it is considering.

Three Ministers must be notified of this matter, the Minister for Enterprise, Trade and Innovation, Deputy Richard Bruton, the Tánaiste and Minister for Foreign Affairs, Deputy Eamon Gilmore, and the Minister for Health and Children, Deputy James Reilly. The universal health care system offers the potential for redeploying this workforce within the State. They have experience, education and a proven track record in medical benefits systems. They have provided an exemplary service in the private sector and have an ethos and tacit knowledge that cannot be bought. We must seek to redeploy these people and bring this country to a better position.

The IDA has a role to play and I have brought the matter to its attention. A contingency plan is required. The IDA knows the company has international competitors and if it is willing to forgo the expertise built up over 23 years, the IDA should look at its competitors and companies in Ireland and ask them if there is a potential opportunity with this facility to redeploy these people and give something to north Kerry, west Limerick and west Cork. Ireland is in a black hole of economic depression and this international event is bad news. I ask for its assistance.

Deputy John Perry: Information on John Perry  Zoom on John Perry  I thank the Deputies for raising this matter on the Adjournment. Aetna Ireland Incorporated is a subsidiary of US-based Aetna Incorporated, a leading company in the health care benefit sector. Aetna Ireland Inc. provides customer service, claim processing and plan sponsor support services for Aetna Global Benefits, the international insurance products and services division of Aetna Inc.

The company has had a branch at Tralee Road, Castleisland, County Kerry since 1988. Aetna Inc. acquired the company in 1998. In 2008, Aetna Ireland celebrated 20 years of operation in Castleisland and also announced its expansion for an additional 70 positions with the inclusion of a 24-hour support service for members of European based multinational corporations. It currently employs 105 workers in Castleisland, which is one of three claims processing and operations centres for the group, the others being in Tampa and Manila.

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As required under section 12 of the Protection of Employment Acts 1977-2007, the company notified the Minister for Enterprise, Trade and Innovation of a collective redundancy situation on 8 March 2011. According to the company, it was proposing a cessation of its customer service, claim processing and plan sponsor support service operations in Castleisland, as part of a global initiative to reduce overall operating expenses, while achieving service efficiencies and maintaining a high level of service and support for AGB customers and providers. Aetna indicated that it was proposing to transfer the functions and operations currently performed in Castleisland to vendors located outside of Ireland. According to the company, the review of its international operations is still ongoing and no final decision on the Castleisland operation has been taken.

I assure the Deputies that IDA Ireland is engaged in discussion with the company in efforts to secure its Irish operation.

If the proposed transfer of functions and operations occurs, the company stated that it would no longer require the services of 102 employees in Castleisland. Aetna advised that the collective redundancies, if progressed, would be expected to arise during the period of late June to late October 2011. The company confirmed that it intended to consult employee representatives concerning matters related to the proposed redundancies, including the selection criteria that [275]would be applied should the redundancies proceed as well as the method for calculating any redundancy payments, other than statutory redundancy.

Section 9 of the Protection of Employment Act 1977, as amended, makes it mandatory on employers proposing a collective redundancy to engage in an information and consultation process with employees’ representatives, with a view to reaching an agreement. This process requires the employer to give the representatives a reasonable opportunity to revert with their proposals, having had an opportunity to consider the employer’s initial proposals.

I understand the workers have elected an employee representative committee that, with a view to the mitigation, or avoidance, of the proposed redundancies, has responded to the company’s proposals. Unfortunately, I understand that the parties have so far been unable to agree on any proposals to mitigate the proposed job losses. As well as being dissatisfied with the information and consultation process and its failure to mitigate the job losses, the employees have expressed dissatisfaction with the redundancy package offered by the company.

I understand that the employee representative committee has formally sought the assistance of the Labour Relations Commission in the dispute. The conciliation service of the commission has invited Aetna Ireland Inc. into talks and I understand that the company is considering the invitation and will revert to the commission as soon as possible.

Ireland’s system of industrial relations is, essentially, voluntary in nature and responsibility for the resolution of industrial disputes between employers and workers, whether in redundancy or other collective disputes, rests with the employer, the workers and their representatives. The State provides the industrial relations dispute settlement services to support parties in their efforts to resolve their differences.

Even what often appears to be the most intractable of disputes is capable of resolution where both sides engage constructively and in good faith in this voluntary process. The principle of good faith implies that both sides in a dispute make every effort to reach an agreement and endeavour, through genuine and constructive negotiations, to resolve their differences.

I urge the parties involved in this dispute to work together to break the current impasse by utilising the established machinery for dispute resolution.

I thank Deputies Fleming and Spring for raising this important issue. The Minister will work closely with IDA Ireland to ensure something can be done positively to ensure their concerns are dealt with decisively.

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