Figures released to me in the Dáil shows that the Government has almost lost control of the redundancy payment system under the weight of new claims.

The new Minister for Enterprise, Trade & Innovation, Batt O’Keeffe must breaks with the policy of his predecessor, Mary Coughlan, and accepts that a serious problem exists and starts to tackle it.

In 2009 the Redundancy Payment Section was seeking the recovery of €78.7 million. In 2009 the Department successfully recovered just €3.6 million.

The Department’s response also reveals that
• €336 million was paid out by the Department in 2009 when it processed 50,664 redundancy claims up 70% on 2008.
• In 2005 €149 million was paid out on redundancy by 2007 this had increased to €183 million and by 2009 €336 million.
• Between 2007 and 2009 the number of new claims has jumped by 200% compared to an increase of just 10% between 2005 and 2007.
• The number of people claiming redundancy has jumped from 25,450 in 2007 to 77,001 in 2009.
• In cases where employers have refused to pay redundancy but have not proven an inability to pay employees must seek judgment from the Employment Appeals Tribunal. The number of claims to the EAT has grown from 3,173 in 2007 to 5,457 in 2008 to 9,458 in 2009 resulting in waiting times of almost 12 months.

A positive step would be to:
• Reallocate staff to reduce the waiting times for redundancy payment. Many people are awaiting these payments to return to education or start a new business.
• Examine how the Redundancy Section and the Revenue Commissioners can work closely together to speed up redundancy payments, especially where employers are not cooperating with the Redundancy Section.
• Address the problem where thousands of people now waiting decisions from the Employment Appeals Tribunal, many of them on redundancy issues.

DAIL QUESTION

To ask the Tánaiste and Minister for Enterprise, Trade and Employment the number of persons that have applied for redundancy payments for each year between 2005 and 2009 in tabular form; the number that received redundancy payments between years 2005 and 2009; the number that were advised to take a case to the Employment Appeals Tribunal due to the fact that their employer had not provided adequate information to her Department; and if she will make a statement on the matter.
- Deirdre Clune.

To ask the Tánaiste and Minister for Enterprise, Trade and Employment the amount that has been paid out in redundancy payments for each year between 2005 and 2009 in tabular form; the amount that has been reimbursed to employers who have paid redundancy to employees and that are seeking to recover 60% from her Department for each year between 2005 and 2009; the amount that has been paid out directly to employees of companies who have not been able to pay them directly for each year 2005 to 2009; the amount that has been recovered by her Department from such companies for each year 2005 to 2009; the amount that her Department is seeking to recover from companies where it paid redundancy to employees; the amount that her Department is seeking to recover some or all of that from the company for each year 2005 to 2009; and if she will make a statement on the matter.
- Deirdre Clune.

To ask the Tánaiste and Minister for Enterprise, Trade and Employment the number of companies who have claimed an inability to pay redundancy for each year between 2005 and 2009 in tabular form; the number of employees that were affected for each year 2005 to 2009; the number of these companies that failed to provide sufficient information to her Department to allow their employees to be paid redundancy each year 2005 to 2009; the number of employees that were denied redundancy or asked to take a case to the Employment Appeals Tribunal as a result of such failures by their employers each year 2005 to 2009; and if she will make a statement on the matter.
- Deirdre Clune.

To ask the Tánaiste and Minister for Enterprise, Trade and Employment the timeframe employees seeking redundancy from her Department but were asked to take a case to the Employment Appeals Tribunal are waiting for their cases to be heard by the Employment Appeals Tribunal; the timeframe they are waiting for redundancy payments from the date of application for each year 2005 to 2009; if she has reviewed this problem in view of the fact that such employees are being penalised for the actions of their employers; and if she will make a statement on the matter.
- Deirdre Clune.

To ask the Tánaiste and Minister for Enterprise, Trade and Employment the steps she takes to recover money from an employer, when that employer has refused to pay redundancy, but has been unable to prove that they are unable to pay redundancy and when the employees involved have secured a decision from the Employment Appeals Tribunal that they are entitled to redundancy and this has been paid by her Department; the number of employers that fall into this category; the amount that her Department is seeking to recover from such employers; and if she will make a statement on the matter.
- Deirdre Clune.

R E P L Y

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Calleary)

I propose to take questions 130 , 131 , 132 , 133 and 134 together.

I must advise the Deputy that the level of information requested in the questions is extremely detailed and would consume considerable resources within what is currently a very busy area of my Department to provide the information requested. I am sure the Deputy will appreciate that the main focus of the Redundancy Payments Section currently is to dispatch redundancy payment claims to individuals and businesses as quickly as possible.

Under the Redundancy Payments Acts 1967 – 2007, the objective is to ensure that statutory redundancy payments, due to eligible employees on being made redundant, are made in accordance with the legislative provisions. The legislation places the onus, in the first instance, on the employer to discharge the obligation to pay redundancy entitlement to employees. In so doing, the employer is entitled, by virtue of pay related social contributions made to the State, to recover a 60% rebate on the amount paid out in redundancy payments to employees.

In the case of liquidations/receiverships/examinerships and in cases of informal insolvency where the employer provides proof of inability to pay the redundancy entitlements to employees, the Department pays the redundancy lump sums directly to the employees from the Social Insurance Fund (SIF) and then seeks to recover 40% of the amount paid out as this is the company’s share of the liability of the employees’ statutory payment.

In circumstances where proof of inability to pay on the part of the employer is not provided, or the employer refuses to pay the redundancy lump sum payments to employees, it is the case that the Department refers those employees to the Employment Appeals Tribunal (EAT) to obtain a determination of their right and entitlement to a redundancy lump sum. Where a positive determination is obtained from the EAT, this enables the Department to pay the employees directly from the SIF and the Department then endeavors to recover from the employer the amount paid out from the Fund – 40% in the case of employers where proof of inability to pay could not be provided and, in the case of employers who refused to pay the redundancy entitlements in the first instance, the Department seeks to recover to the SIF 100% of the amount paid out.

Under Section 43 of the Redundancy Payments Act 1967 (as amended) amounts owing to the Fund are recoverable as debts due to the State and, without prejudice to any other remedy, may be recovered by the Minister as a debt under statute in any court of competent jurisdiction. The Minister’s claim has preferential status under Section 42 of the Redundancy Payments Act 1967 (as amended).

The Department does not collate information regarding the number of cases in which it has advised employees to have recourse to the EAT owing to either insufficient proof of inability to pay on the part of the employer or, refusal by the employer to pay the entitlements of employees.

The Employment Appeals Tribunal is an independent, quasi-judicial body under the aegis of the Department of Enterprise, Trade and Employment. It deals with claims under 18 different pieces of legislation. I am informed that it is not currently possible to disaggregate the numbers of claims received under the different pieces of legislation – it is possible to disaggregate once the claims are dealt with. Overall, the numbers of claims to the Tribunal have shown a marked increase in the last two years in particular, from 3,173 in 2007 to 5,457 in 2008, and rising to 9,458 in 2009.

The degree of increase in the numbers of claims received has naturally placed considerable pressure on case processing timeframes before the EAT. However, a number of steps have been taken to relieve this pressure. These include increasing the allocation of administrative resources to the Tribunal in the past two years, increasing the numbers of sittings per day, to a total of 924 in 2007, 1,304 in 2008, up to a total of 1,437 in 2009.

Efficiencies introduced in the Tribunal have increased the rate of throughput of claims from 2,807 in 2007 to 4,007 in 2008 and rising to 4,680 in 2009. Included in these figures are claims dealt with under the Redundancy Payments Acts as follows:

2007 – 546
2008 – 1038
2009 – 1420.

In addition, I have increased the pool of people available to sit on Tribunal Hearings by 9. Work is underway in relation to the IT system operated by the Tribunal in order to upgrade it and consideration is being given to the possible installation of a new IT system. The situation in the Tribunal is under constant review and further action will be taken as necessary within the constraints that exist in relation to resources.

The Redundancy Payments Section of my Department is currently processing rebate applications submitted by post from June 2009 and those filed online from August 2009, so that the waiting time is approximately 6 to 8 months depending on the manner of filing the application. In respect of lump sum payments paid directly to employees in instances where employers are unable to pay the statutory redundancy entitlements, the Section is, in general, processing claims dating from August 2009. For the years 2005 to early 2008 the Department’s target for processing claims was 6 weeks for online claims and 10 weeks for manual claims submitted by post. Since then the processing times have extended continually due to the influx of redundancy claims resulting from the economic downturn.

My Department has, in 2009, processed 50,664 claims, up 70% on 2008, and made corresponding payments totaling €336m which results in average weekly payments to the value of €6.5m being issued. In the period 2007 – 2009, the level of new claims lodged with my Department has increased cumulatively by 200%. This contrasts with the previous two-year period 2005 – 2007 in which period the increase in new claims lodged was just 10%.

Efforts have been made by the Tánaiste and myself to deliver more acceptable turnaround processing times for redundancy payments given the difficulties that this gives rise to for both individual employees and the business community.

Measures already taken include:
· the reassignment of 26.7 additional staff (full time equivalents) from other areas of the Department to the Redundancy Payments area since early 2009 with ongoing review of trends and demands. The current number of staff serving in the Redundancy Payments Section in terms of full time equivalents is 52.5;
· the prioritisation of the Department’s overtime budget towards staff in the Redundancy Payments Section to tackle the backlog outside normal hours;
· the establishment of a special call handling facility to deal with the huge volume of telephone calls from people and businesses who are naturally concerned about their payments, using the facilities and cooperation of the National Employment Rights Authority (NERA). This centre has received an average of 12,500 calls per month this year with an estimated 60% relating to redundancy payments;
· The provision of better quality information relating to current processing times on the Department’s website;
· Engagement with the Revenue Commissioners to facilitate the offset of redundancy rebate payments by employers against outstanding tax liabilities with the Revenue Commissioners.

The Tánaiste and I are monitoring closely the impact of these changes against the continuing influx of redundancy claims and it is clear that additional measures are required to help reduce the backlog of claims which currently stands in excess of 39,000. The Department is currently actively engaged in efforts to secure up to 16 additional staff resources deployed to the area in the first half of 2010.

Table 1 attached sets out the number of statutory redundancy applications received for the years 2005 to 2009.

Tables 2 and 3 set out the total amount paid by the Department out of the Social Insurance Fund in respect of redundancy claims for the years 2005 – 2009.

In the years 2005 to 2009, the Department has been successful in recovering to the Social Insurance Fund amounts of €2.2m, €0.4m, €0.7m, €0.9m and, €3.6m respectively as shown in Table 4.

The cumulative debt outstanding which the Department is seeking to recover to the Social Insurance Fund as it stood at each year end is €24.9m, €31.1m, €37.7m, €48.5m and €78.7m respectively as shown in Table 5.

Table 1: Actual Statutory Redundancies for years 2005 to 2009
2005 2006 2007 2008 2009

23,156 23,684 25,459 40,607 77,001

Table 2: Expenditure from the SIF on Statutory Redundancies for years 2005 to 2009
Category of
Claim 2005 2006 2007 2008* 2009*
Rebate to Employers 137,915,574 152,168,532 167,390,542 161,774,389 247,891,733
Lump Sum to employees 11,257,620 14,343,692 15,937,492 31,936,998 87,970,092
Total 149,173,194 166,512,224 183,328,034 193,711,387 335,861,925

Table 3: Redundancy Payments made from the Social Insurance Fund (€) including breakdown of lump sum payments made
Category 2005 2006 2007 2008* 2009*
Rebate to employers 137,915,574 152,168,532 167,390,542 161,774,389 247,891,733
Lump Sum 60% 5,985,141 7,700,138 8,721,499 17,873,894 50,906,127
Lump Sum 40% 3,991,538 5,115,416 5,842,876 11,930,101 34,569,646
Lump sum 100% 1,280,940 1,528,137 1,373,117 2,133,003 2,494,209
Total 149.173,194 166,512,224 183,328,035 193,711,387 335,861,716

Please note that rows 2 and 3 (lump sum 60% and lump sum 40%) of Table 3 split out the amount of the payments made in respect of employees in situations of liquidation or receivership or companies in informal insolvency. To find the total amount paid out the figures in both rows for each year should be aggregated and the amount which the Department seeks to recover is the 40% amount on row 3.

Table 4: Recoveries in Respect of Redundancy Payments (€)

2005 2,199,478
2006 434,468
2007 657,978
2008* 948,606
2009* 3,589,802

Note the amounts recovered in each year relates to monies recovered for the current year
and earlier years.

Table 5: Amounts Outstanding due to SIF in respect of Redundancy Payments (€)

2005 24,913,154
2006 31,122,241
2007 37,680,257
2008* 48,493,602
2009* 78,673,864.61
All figures are cumulative figures

Please note that figures for both 2008 and 2009 in tables 2, 3, 4 and 5 are *provisional figures.