Seanad Éireann - Volume 140 - 27 April, 1994

Irish Shipping Limited (Payments to Former Employees) Bill, 1994 [Certified Money Bill] : Committee and Final Stages.

Section 1 agreed to.

SECTION 2.

Question proposed: “That section 2 stand part of the Bill.”

Mr. Howard: I have a couple of queries on this section. I do not want the Minister or anybody else to feel that I am raising these points in a niggardly fashion or to delay the legislation. My main purpose is to get clarification and to ensure that there are no bottlenecks in the procedure we are putting in place to enable the payments to be made as quickly as possible.

Under section 2(2), the method of calculation is three times the former employee's normal weekly remuneration, within the meaning of the Redundancy Payments Act, 1967. What is the [251] advantage of making the calculation on the basis of the normal weekly remuneration as against the annual remuneration?

Section 2(3) states that the lump sum shall not exceed £50,000. The Minister has indicated that only five people will be involved. However, Senator Mooney asked if we are talking about £50,000 net or £50,000 subject to tax. That is very important. I am in no position to crow from this side of the House but we are dealing with very niggardly sums which should be exempt from tax.

Mr. Roche: I support Senator Howard. In terms of what these people lost, £50,000 is a paltry sum. I understand the legal arguments which were put forward. I spoke to every Minister for Transport since 1984 on this issue because I was deeply, personally affected by it. I was moved by the plight of those people and £50,000 is a paltry sum in terms of what they lost. It is a very small sum and for the ships' officers £50,000 is nothing because they were the people who could not get new jobs. Like Senator Howard, I would hope that this £50,000 will not be watered down in any way.

I commend Senator Howard for making the point that the method of calculation was less than generous because in other redundancy cases people who served this nation less well than the staff of Irish Shipping were given more generous multipliers. A multiple of three is not generous. It would be a terrible travesty, and something that I personally would find it difficult to stand over, if it was to be whittled down in any way. I would hope the Minister will be as generous as possible.

Mr. Mooney: Senator Howard and Senator Roche have more or less nailed their colours to the mast, if I could use that colloquialism. I endorse their comments. We are all aware that these families had to incur substantial debt while they were campaigning outside the gates of this House in the hope that they would get some remuneration. The fact that this [252] Government has now delivered does not detract from the reality of ten years of waiting. What were they supposed to do in the interim? How were they to live? Some were fortunate, as the Minister pointed out, in obtaining employment but the vast majority and their families had to suffer all the financial difficulties and hardships consequent on the 1984 decision. That is why I believe there is a moral obligation on this Government to ensure that when a figure is mentioned, that is the figure they get.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. O'Shea): The first question raised by Senator Howard related to the method of assessment of income. The method used will be the same in terms of what pay counts as remuneration as per the 1967 Act, except that the £250 per week limit which applies in normal redundancy cases will not apply here. In relation to the payments being subject to taxation, my understanding is that only about a quarter of the payments will be subject to taxation.

Mr. Mooney: Unfortunately I am constrained by the party Whip and have to support this, but I want to put on record the fact that I am deeply opposed to it. This is a charade. Give them their money. Do not say you are giving them something and then take 25 per cent off the top.

Mr. Roche: I want to record my disappointment. If ever there was a case for the State to act generously this is it. I realise that there have been so many problems with precedents being argued backwards and forwards over the years but the reason we did not compensate the Irish Shipping people up to now, let us face it, has been the argument that it was going to leave us vulnerable to suits from other people who were involved in the debacle; in particular from the Chinese who ravaged the company not once but twice. I feel very strongly about this. We should not be in a situation where the tax take will diminish the compensation [253] by 1p or £1. As a nation we owe this to these people. We are not doing them any favours and if we respect service to the nation we owe it to ourselves to be generous. I feel disappointed. Like Senator Mooney I am constrained by the Whip but if there was ever an occasion when I felt like bucking the Whip and saying “To hell with it”, this is it. We should have another close look at this.

I do not know what are the functions of this committee but when it comes into operation we should look at some device to create the transfer of these paltry sums to these people and their families. I know people from Irish Shipping who were made unemployed that day; people whose sons and daughters were denied the kind of education those men went to sea to provide them with. I know from my own family experience what it is like to be a child of a seaman; your father is missing for God knows how many days and months of your life. Children came into the world, grew up, went to school, their mothers reared them and then they were denied the chance to educate them further. We owe these people and we should pay this money without taxation. For God's sake, do we have any self respect?

Mr. Howard: I support the points made by Senator Mooney and Senator Roche. I became worried about this aspect when I saw the actual composition of the committee, which is covered in the next section. The Minister said he anticipated that only about a quarter of the payments would be subject to tax. Did I hear him correctly?

Mr. O'Shea: Yes.

Mr. Howard: We are trying to make some gesture of decency following the turmoil, upset and disturbance suffered by these people. The Minister, Deputy Andrews, said it was anticipated that the total fund would come to £3.5 million and would be distributed among approximately 300 employees with a ceiling of £50,000. If we are prepared in this day [254] and age to give £3.5 million what does it represent? Have the calculations already been done? Is that figure the net cost to the State? Or are we representing ourselves as providing £3.5 million when we know that a sizeable chunk will be returned through another channel to the State? I appreciate the Minister's difficulty but unless he can try to meet us on this point, I would suggest that the remaining Stages of the Bill be taken on another day, even though I am against creating delay here. We are not looking for a major sum. I do not want us to go away today and say we are being generous and decent in giving £3.5 million when we know that a substantial part of that will be returned to the State by another avenue. I would suggest that between now and the next Stage, the Minister should try to find a way to ensure that this sum will be a net figure.

Mr. O'Shea: I take on board the points made in relation to tax deductions from the payments due to the former employees of Irish Shipping. I should point out that the deductions are in accordance with tax law. We are dealing with a Bill which enables the Minister for the Marine to make payments to former employees of Irish Shipping. As was stated by some Members, the interdepartmental committee which will be put in place by the Minister includes an officer nominated by the Minister for Finance and an officer of the Revenue Commissioners but my understanding is that deductions which would be due would apply to about 25 per cent of the payments. They relate to tax law. We are dealing here with a Bill which is being presented by the Minister for the Marine.

Mr. Mooney: I would like to ask a question on a point of clarification. Subsection (4) says that “Schedule 3 (other than paragraphs 1 and 2 thereof) of the Act of 1967 shall apply,” Section 2 (2) refers to “within the meaning of the Act of 1967”. Is the Minister referring to that? If so, could he clarify it? Could he also clarify Schedule 3 of the 1967 Act?

[255] Mr. Roche: I appreciate the situation of the Minister and Minister of State with regard to the payment issue. I have no doubt about their personal views. No Member of the Dáil, Seanad or nation would wish to see one shilling clawed back from these people. I accept the Minister's remarks regarding the expertise on the committee. I will not seek a vote on this matter because I understand there has been agreement with the representatives of the Irish Shipping families. If that was not the case I would be in a difficult situation.

Would it be possible for us to have a role in monitoring how the committee operates? I agree with Senator Howard that it would be an appalling travesty if some of this money was clawed back. It is a small amount; in terms of the hardship that has been caused to individuals, it is a paltry amount. Is it possible to ensure that there is no taxation? I am sure the Minister has the answers to these questions.

Minister for the Marine (Mr. Andrews): I have answers but they may not be the right answers. The Senators are raising the issue of fair play because these individuals have waited so long for their entitlements. The company went into liquidation in November 1984 and this is now April 1994. The Senators are saying that there should not be a claw-back on the awards. Is that right?

Mr. Howard: Yes.

Mr. Andrews: I do not wish to mislead the House in this regard but I understand that tax must be paid in these circumstances. The law of the land must be accorded its place. I agree that it is unfortunate. However, it is the reality. The Senators are threatening to call for divisions. That is a matter for them. Despite our words on Second Stage about courage, heroism and tragedy, we must face reality.

Mr. Howard: Divisions are not being threatened. We recognise the Minister's commitment and achievement in introducing [256] this measure. However, we wish to ensure that the best possible deal emerges from this legislation.

I wish to discuss the law of the land and tax law. This Bill is before the House today because the law of the land could not rectify or deal with the problems of these people.

Mr. Andrews: No, it was the will of the land, not the law of the land.

Mr. Howard: Tax law was referred to earlier. Since the component parts of the law was incapable of dealing with the problem that arose it was necessary to introduce this Bill. These circumstances have the same application to tax law. If we must deal with the void that existed by introducing this legislation and if it is the view of the Minister and the House that we should treat these people with absolute generosity, the insertion of a section would meet with the unanimous approval of the House.

I also wish to discuss the £3.5 million. We wish to understand this matter more clearly because, having been informed that there is an agreement with representatives of the employees, we are constrained in our discussion of it. As there is an agreement with which the employees are satisfied, there is a natural reluctance on our part to interfere with it. However, how has this settlement been represented to them and what do they believe they are accepting? Has it been suggested to them that the Government is prepared to make £3.5 million available to resolve this case? Have they made their calculations on the basis of £3.5 million without recognising that a substantial portion of that amount will return to the State? It may be that the employees and their representatives are not being offered £3.5 million. I would like clarification on that point.

Mr. Andrews: The Senator makes a good case. We are compassionate people. This Bill was introduced to deal with a problem which the State should have dealt with ten years ago. I understand that, subject to the most transparent [257] scrutiny, the amount of £3.5 million was agreed by the workers and the representatives. In those circumstances and subject to examination, I would have thought that they understood that the tax laws would take effect. We have consulted the Revenue Commissioners and they have insisted that the law must be applied. However, the law of the land today will be applied more generously than it would have applied in 1984. That is an ascertainable fact.

I cannot and the Seanad cannot constitutionally amend this Bill in a tax context. It is not possible.

Mr. Howard: However, the Minister can.

Mr. Andrews: I cannot.

Mr. Howard: The Minister can.

Mr. Andrews: I can go back to the Dáil——

Mr. Howard: That is correct.

Mr. Andrews: ——and ask its approval. However, I will not take that course. I do not wish to delay the House or be tedious as I believe in getting to the core of a matter. We cannot amend the tax law in this Bill. It would require further amendment of tax law to exempt the payments from taxes. I understand that about 25 per cent of all employees will be subject to taxation. The £50,000 ceiling applies to about five of the 300 people who will benefit from this Bill; the five are former senior executives. The compensation will be taxed at more favourable rates than would have applied in 1984.

The question of taxation is covered by the relevant Acts and it would require amendment of those laws to implement the wishes and desires of the Senator. I do not deny that he has made a strong case but in the circumstances of the time and place, and given the urgency with which we must deal with this legislation, I cannot accede to his request. I would [258] genuinely like to do what he asks but I cannot.

Mr. Roche: I accept that constitutionally we cannot take a financial decision in this House, as the Minister said. As I did before he returned to the House, I commend the Minister for introducing this Bill. He has given us back a sense of dignity because we as a nation debased ourselves in what we did to Irish Shipping. The Minister is now compensating for the last ten years.

When the committee looks at this issue, it might consider some points. We are discussing an ex gratia payment which not merely compensates for the loss of a job at a particular time but for the hardship suffered in the intervening period. If there is any compassion in the Revenue Commissioners, this will be seen as a cumulative flow of income and as such it would attract a much lower tax burden, if any burden whatever attaches.

While the Minister is present, I express pleasure at the Bill. Like him, I would prefer if we could be more generous, but the Minister has given these Houses back a sense of self-respect on this issue. The committee could regard this ex gratia payment as a cumulative flow of cash over time to compensate for all the losses over a ten year period. If Revenue was inclined to look at it in that way and calculate using an averaging process over the ten years, there would probably be no tax burden.

Mr. Mooney: Like Senator Roche, I have a great deal of respect and affection for the Minister and I appreciate the points he has made here. However, like a dog with a bone, I will not give up. Perhaps the Minister can clarify this matter.

Mr. Andrews: I will if I can. I am not the fount of all wisdom.

Mr. Mooney: Perhaps not, but the Minister has a holy trinity of advisers behind him who will be more than happy to clarify any points of difficulty I may have.

[259] Mr. Roche: As a simple country Senator.

Mr. Mooney: I thank Senator Roche for the description. As a simple country Senator I do not have the Minister's resources and therefore I ask these questions. I understand there were constitutional or legal constraints preventing the Minister's predecessors from bringing forward legislation of this nature and perhaps he can clarify those. I also understand litigation was initiated or promised at some stage by Irish Shipping employees. Perhaps they proceeded with it and failed, or on advice decided not to proceed. The Minister has conceded some points. I am sorry I cannot give him my Second Stage contribution because both Senator Roche and I were loud in our praise of what he has done.

Mr. Andrews: The Senator can send me a video. I would not dream of missing it.

Mr. Mooney: I would not inflict the contribution in its entirety on the Minister.

Mr. Andrews: I will accept an edited version.

Mr. Mooney: I will send one, expurgated and with expletives deleted. In graciously conceding the point to Irish Shipping employees, the Minister may be signalling that they would have been successful in a court case. Any damages that would have been awarded in a court case would not have been subject to tax; the employees would have received the full amount. This relates to the point made by Senator Howard, that the Minister or the Government is in a position to do something about this issue. The Minister has already said he will not do so.

Mr. Andrews: I said I would be willing but I cannot, unfortunately. I am not a hard hearted individual, as the Senator knows. I do not wear my compassion on [260] my sleeve, but I feel just as badly as he does, perhaps worse.

Mr. Mooney: Perhaps the Minister does feel worse, because he has brought the Bill forward and lived with the matter. At the risk of repeating myself, this is to his eternal credit, whatever other highlights there may be in his ministerial career.

Mr. Andrews: There are others that will not, unfortunately.

Mr. Mooney: The Minister mentioned the figure of 25 per cent. There was some confusion as to whether this was 25 per cent of the amount each employee would receive, of 25 per cent of the employees.

Mr. Andrews: It refers to 25 per cent of the employees.

Mr. Mooney: That means that of the 300, 75 per cent will not be taxed, which eases my worries considerably.

Mr. Andrews: We are all compassionate, none more so than Senator Mooney. It would be good if we were all as compassionate as him. Senator Roche's point is an interesting one. When this committee looks at the implementation of the requirements and the applications received, there might be a case for giving effect to his proposal. The committee would do well to look at his suggestion, but I cannot give any guarantees or undertakings. I am not certain the law can do as the Senator wishes or can address the issue he raised.

On the question about a court case, I know from my practice as a hazard barrister, dealing with insurance companies, that any sum of money awarded to a victim is tax free. I assume the same principle would have applied if Irish Shipping employees had taken a case and succeeded, although an element of risk would be involved. As Senator Roche has pointed out, they did not have to go through the trauma of a case. Any proceedings can now be withdrawn on the basis of the Bill before us. Any [261] awards that might have been made would not have been taxed, but that is engaging in speculation. If a case had gone forward and was successful, they would have received awards; but again one can only speculate how positive their day in court might have proved. If I had been their adviser, my opinion would be that on the balance of probabilities they would have done well.

My information as to why such a long period has elapsed between liquidation and the introduction of this Bill is that it was necessary to formulate an arrangement acceptable to the former employees, while at the same time ensuring the State was not exposed to other claims. This Bill provides specifically for former employees of Irish Shipping Limited.

Mr. Mooney: I am grateful to the Minister and I am not attempting to be patronising or facetious. In his Second Stage speech he said he would not speak in detail on the provisions at that point because they would be thoroughly discussed on Committee Stage. That is precisely what we are doing.

Question put and declared carried.

SECTION 3.

Question proposed: “That section 3 stand part of the Bill.”

Mr. Howard: I have a number of queries. When I raised my question on section 2, I explained to the Minister of State at the Department of the Agriculture, Food and Forestry, Deputy O'Shea, that I was not raising queries to delay the business of the House but to ensure a smooth mechanism which would deliver earlier results. I am concerned about speed in relation to this Bill, which perhaps is stymied by certain provisions in section 3. Section 3 states that “The Minister shall, as soon as may be after the commencement of this Act, appoint a committee”. How soon will that happen if we pass the Bill this evening?

[262] The functions of this committee are explained in detail in section 6. Each one of the 300 applications must be examined and processed by this committee. In relation to section 3 and the constitution of this committee, I have no difficulty accepting two officers from the Minister's Department, or an officer of the Minister for Enterprise and Employment. However, I question the two other proposed appointees. In relation to the last proposed appointee, and following our discussion on section 2, I am concerned that this appointment may reflect the interest of the office represented rather than the requirements which the Minister expects from the committee. Section 3 states that the “quorum for a meeting of the Committee shall be three” and that “The Committee may act notwithstanding one or more vacancies among its members.” However, there may only be two.

I am also concerned about the part of the section which states that “Subject to the provisions of this Act, the Committee shall regulate its own procedure and business.” Is it wise to allow a committee to regulate its procedure and business when concerns have been expressed about its constitution? Would it not be in the people's interests, whose needs we are attempting to deal with, for the Minister to advise the committee on how it should conduct its business?

Mr. Andrews: The Senator has made two good points, the first of which refers to the constitution of the committee. The Senator is happy with the two officers of the Minister.

Mr. Howard: I have great confidence in those appointees.

Mr. Andrews: The Senator is happy with an officer nominated by the Minister for Finance.

Mr. Howard: No. I am happy with an officer nominated by the Minister for Enterprise and Employment.

[263] Mr. Andrews: The Senator is happy with him, but he is not happy with an officer nominated by the Minister for Finance.

Mr. Howard: I question that appointment and the last one.

Mr. Andrews: We may be falling into a trap and imputing wrong motives to the officer of the Revenue Commissioners nominated by the Revenue Commissioners. The Senator is suggesting that this officer will do his worst as far as the employees of Irish Shipping are concerned. Perhaps that is the main motivation behind the Senator's wish to purge this individual from the committee, as set out in the legislation.

Mr. Howard: We should give the agreed £3.5 million as generously as we can.

Mr. Andrews: Yes, but tax collectors have always had a bad name and the Senator seems to be making that point. If that is not true, the Senator may argue with me. However, this officer may be more compassionate than the other officers.

Mr. Howard: Perhaps, but it is unlikely.

Mr. Andrews: At present I cannot say who this individual is, but he may be a saintly Revenue Commissioner.

Mr. Mooney: He could be full of compassion like me.

Mr. Andrews: He may have a font of passion like Senator Mooney.

The Senator also said that the Minister should regulate the committee's procedure and business. Like the planning laws, the Minister should be at arms length from such proceedings because the moment something goes wrong, or someone thinks he is being offended, or somebody gets more than someone else in the legal share out of £3.5 million, the finger is pointed at the Minister and political [264] charges are made in both Houses of the Oireachtas. I am not underrating politics or politicians. In fact, I have the highest respect for them and I do not share the sophistication that we are a “low lot” unable to regulate our affairs. I have the highest regard for people who have the guts to put themselves forward before the people and be elected. The people who criticise us would not be elected across the room. However, the further the Minister is away from the involvement of this committee the better. These responsible individuals will be able to regulate their own business and procedures in the full light of public scrutiny.

Mr. Roche: I agree with the Minister because it is important for them to be at arms length. I do not share the cynicism or sophistication, which was the Minister's eloquent phrase, about politicians being a “low lot”. There must be a distance between this committee and the Minister because in Ireland there is always the suspicion that a political string has been pulled if one person gets one shilling more than another.

There are no representatives of Irish Shipping personnel mentioned in this section. The Minister said he would consider an outside person for the committee, but he then decided against it. Was consideration given to representing the workers or the ex-workers of Irish Shipping on the committee? Were the representatives in agreement? I disagree with Senator Howard's point about the Revenue Commissioners. If a tax efficient means of payment were to be decided, it would be important to involve the Revenue Commissioners from the beginning.

Mr. Andrews: I am subject to correction, but I understand consideration was given to the presence of a trade union member on the committee who would represent the views of the workers. On balance, it was decided, presumably with the agreement of the individuals concerned, to accept the committee as presently constituted.

[265] Why is a committee being established? Is this another layer of bureaucracy? Will it involved additional Exchequer expenditure? Why are the former employees not being given a voice on the committee? The purpose of the committee is to enable the Minister to have the benefit of the advice and expertise of those with experience in the areas of tax, redundancy and finance when deciding on applications. Rather than creating an unwanted layer of bureaucracy, this should facilitate the efficient and speedy processing of applications. There will be no Exchequer expenditure involved. The committee is not a representative group, but a process whereby the assessment of applications is assisted and expedited by the availability of expert advice. It is not a haggling forum, and I do not say that with disrespect. If a person representing the interests of former employees were to be nominated to the committee, the liquidator, IBEC or the Irish Chamber of Shipping would also wish to be represented and this would delay the process.

When going over the nitty-gritty of the committee with civil servants, this question as to why former employees of Irish Shipping were not represented arose. The reason was — this may or may not have happened — that if A was represented B and C would also want to be represented. At the end of the day the committee would have been an amorphous mass. I believe in small committees which do business and produce conclusions quickly. A large committee leads to a sense of ponderousness which inevitably produces a conclusion it does not understand and those it seeks to advantage are disadvantaged and may not understand the deliberations of such a committee. This would be too complicated.

Mr. Mooney: Having argued about the question of payment — I will refrain from using the word “passionately”——

Mr. Andrews: I do not have a problem with that word.

[266] Mr. Mooney: ——the Minister responded by saying the Government would be generous, but to me the most important person on this committee would be the representative of the Revenue Commissioners. I would be more concerned about an officer of the Minister for Finance being on the committee because — the Minister would be the first to testify to this — it is more difficult to get money from the Department than it is from the Revenue Commissioners. Revenue Commissioners deal with people at the coalface and would, therefore, be generous and would stretch existing laws to their limits. Based on the Minister's remarks, I presume that the two officers appointed by him would articulate the views he expressed here. I have no difficulty with the composition of the committee and it should not be held up for that reason.

Mr. Sherlock: I support what has been said in regard to the representation of workers on the committee. For ten years Irish Shipping workers lobbied, campaigned and harassed public representatives in order to see justice done. I have no doubt that it was the realisation on the part of the Government that it could not walk away that resulted in this Bill. An opportunity should be given for representation at this time and I support that.

Mr. Andrews: It is nice to see Senator Sherlock because I was in the other House with him for a long time. If one appoints representatives of the workers or the trade unions to the committee — I am not in any way diminishing either — there would been calls for other representative groups such as the Irish Chamber of Shipping, IBEC and others to be appointed. We had to draw a line somewhere. Warts and all, it is the best I can do in these circumstances. However, I appreciate the Senator's point.

Mr. Howard: I do not believe the Minister is making his own argument. I would be happy with a small committee. I am [267] motivated by the speed and generosity with which we can distribute the £3.5 million to the 300 former employees. Given that each case must be examined by this committee, I would have thought that a committee composed of members from the Minister's Department or the Department of Enterprise and Employment, as representatives of employees affected, would be adequate. Perhaps I was unfair in what I said about the Revenue Commissioners, but, despite what Senator Mooney said, the Department of Finance and the Revenue Commissioners are reluctant to give out cash. The Minister wants to ensure the committee is at arms length from him and he has a valid argument in that regard. The committee will be required to set its own procedures and business. If the committee is properly motivated, there will be no problems, but if it is not, it could take some time to examine the 300 cases.

Question put and agreed to.

SECTION 4.

Question proposed: “That section 4 stand part of the Bill.”

Mr. Howard: Section 4(1) states: “An application for the payment of a lump sum under this Act shall be made in writing to the Minister within 12 months after the date of the passing of this Act.” I am sure the Minister has considered ways of ensuring that each person, or the descendants of deceased employees, will be made aware of this Bill. We are dealing with 300 people and the descendants of some of these people. It would be reasonable to assume that some may be outside the jurisdiction and may not be aware of this legislation within the 12 month period — although I note in subsection (3) the Minister may extend the period. Has the Minister considered means such as newspaper advertisements to convey this to those entitled to benefit if they follow the correct procedures?

[268] Mr. Andrews: The Senator has expressed a concern. However, it is reasonable to assume that those affected by this Bill know about its existence. It is unlikely that those concerned would not be aware of this. I have no doubt but that the committee will take note of what the Senator said. In the event of people being identified as entitled to money under this Bill and if some people or their personal representatives have been left out, action will be taken. This is a valid point and it is interesting to note that section 4 (4) states: “Notwithstanding subsection (1) of this section, the Minister may, if he or she thinks fit, extend the period of time referred to in said subsection (1)”. This subsection preempts or anticipates the point made by the Senator. It indicates flexibility in the application of the Bill because it says the Minister may extend the period of time referred to in said subsection. There is no limit on that time, it could be 12 months, two or three years. That is how subsection (4) may be interpreted.

Mr. Howard: If the Minister finds at the end of the 12 month period that applications have not been received from 20, 30 or 40 of the 300 former employees, subsection (4) will provide him with an opportunity to extend it.

I seek clarification on subsections (5) and (6). Subsection (5) sets out how the Minister deals with a proposal in relation to an application. Subsection (6) states:

A person who has been notified of a proposal under subsection (5) of this section may, within 21 days of receipt of the notification, make representations in writing to the Minister...

The Minister shall then take certain specified steps. To put it in layman's terms under subsection (5) when the Minister proposes to refuse an application he is basically saying no. However, the person is then given the opportunity of going back to the Minister. If I interpret this correctly, the Minister is being asked to decide the matter twice. I would have assumed that the refusal in subsection (5) would be by the committee rather than [269] the Minister and that the appeal would be to the Minister against the committee's decision.

Mr. Andrews: It could be taken that, in the first instance, it would be the committee which proposes to refuse an application for the payment of a lump sum under the Act and then notify in writing the applicant of the proposal and the reasons for it. Then it goes to the Minister who has a sort of appellate jurisdiction to decide whether there is any reasonable grounds to continue the refusal.

I imagine there is third opportunity for the individual who is refused, which is an application to the courts. If he is dissatisfied, he would probably take legal advice and resort to the courts. There are a number of avenues open to the individual who is refused an application. However, having read the Bill, people applying would take account of the conditions under which they make their applications and not make a vexatious application. They would make an application based on a sustainable case that cannot be refused.

Mr. Sherlock: While money is never adequate compensation for the loss of a job or a career, the eventual decision to make the payments is a vindication of the workers' determination. In what circumstances would the Minister envisage refusing an application under subsection (5)? What are the parameters or criteria to be laid down for people who will be making applications?

Mr. Andrews: The legislation is clear on the conditional nature of applications. The individual must have been in the employment of the company for a certain period and must have been an employee at the date of liquidation. Section 6(2) states:

The Committee shall investigate an application referred to it for the purpose of ascertaining——

(a) whether the applicant is a former employee of the company or [270] the personal representative of a former employee,

(b) the period of service with the company of the former employee concerned,

(c) the normal weekly remuneration of the former employee concerned

That of course would depend on the amount he would be getting out of the £3.5 million package in the final analysis.

(d) whether a lump sum is or is not payable to the applicant,

(e) the calculation of such lump sum (if any) or,

(f) any other facts relevant to the payment of the lump sum,

and shall, as soon as may be, prepare a report in writing on the result of the investigation and shall transmit the report to the Minister.

Section 6(2) sets out the functions of the committee investigating an application in determining in each case whether the applicant is a former employee or the personal representative of a deceased former employee, whether the applicant qualifies for payment, applicable service and pay level, amount payable and other facts relevant to the payment and it must report thereon in writing to the Minister. There is a fail safe mechanism there and the conditional nature of the application is set out clearly in the Bill.

Mr. Mooney: Is the Minister satisfied that the involvement here is at arm's length? He went to great trouble on section 3 to say he was operating at arm's length. May I assume that the existence of the committee is to advise and assist and that there is not an interventionist element involved here? Is it the committee who makes the ultimate decision on the bona fides of the application or the Minister? Is the Minister satisfied that the sort of consequences he outlined on section 3 will not be heaped on the Minister for an interventionist approach?

[271] Mr. Andrews: My personal approach would be non-interventionist and that is the intention of the section. To answer the Senator's question, the Minister will remain at arm's length but there will be an appeal to the Minister.

Question put and agreed to.

SECTION 5.

Question proposed: “That section 5 stand part of the Bill.”

Mr. Howard: Section 5 deals with false information. It begins by saying: “A person shall not give false information to the Minister...” Subsection (3) states:

It shall be a defence for a person charged with an offence under this section to show that he or she did not know and could not, with the exercise of reasonable care, have known that the information was false.

Information is either false or it is not. The wording in the section is raising a level of uncertainty in my mind. I cannot visualise the situation envisaged here. Perhaps the Minister in his capacity as Minister and with his Law Library background might be the best person to explain to a layman like myself the nature of the safeguards in subsection (3).

Mr. Andrews: I would not presume to have any more or less wisdom than the Senator. However, this section illustrates the flexibility of the Bill. It states:

It shall be a defence for a person charged with an offence under this section to show that he or she did not know...

In other words, the person had no mens rea or evil intent. The person may base the application on a set of circumstances he or she thought were absolutely accurate but which could, following close scrutiny by the committee, subsequently turn out to be incorrect. That would not be false information because there was no intention to represent false information as being true. It was a mistake or [272] an error of fact based on the proposition that the individual making the application thought he or she was giving the correct facts.

However, where a person specifically launches into an application which he or she reasonably knows to be false, the application will fail. Section 5 (3) is a generous subsection and reflects the thread of generosity that runs through the Bill. However, we should not be taking too much credit ten years later; it should have been done earlier but unfortunately it was not.

Mr. Sherlock: Is section 5 necessary? Although the company was liquidated the records must be available. The figures I have mention that there were 350 employees in the company at the time. In view of the fact that the records must be available, why would a person make a false application?

Mr. Andrews: That is a good point. There is always the possibility that in the circumstances it may be necessary. Taking account of the integrity of the individuals who worked for Irish Shipping and the fact that we have been extolling their virtues without exception, the likelihood of section 5 coming into play would be remote. It may be necessary, I do not think it will, but at the same time I think it should remain there.

Question put and agreed to.

Sections 6 to 9, inclusive, agreed to.

Title agreed to.

Bill reported without recommendation and ordered to be returned to the Dáil.

Mr. Mooney: As someone who had a personal interest, as many of those who have contributed here this afternoon, I said it in Committee and I wish to say again that it will be to the eternal credit of this Minister that he introduced this legislation. I thank him for his indulgence in answering the questions we raised and I hope the speedy implementation of this [273] Bill will result in a reduction of the hardship experienced by many former members of Irish Shipping.

Mr. Howard: I wish to be associated with Senator Mooney's tribute to the Minister. I compliment him on his very frank and generous response to the queries from this side of the House. On Second Stage he expressed a hope that there would be a good discussion here, and we have had that. We have clarified many points that were of concern or interest and I am much happier now with the measure that is leaving the House. I say “well done” to Deputy Andrews for being the Minister who, at long last, brought this much needed legislation to the Houses of the Oireachtas.

Mr. Sherlock: With the passing of the Bill we see the end of one of the chapters of the Irish Shipping saga. Many questions were raised about whether Irish Shipping should have been liquidated. This welcome Bill provides some form of financial compensation for those who lost their jobs as a result of that decision.

Minister for the Marine (Mr. Andrews): This sorry chapter is being brought to a relatively painless close in the history of the economic life of our nation. I wish to express my gratitude for the usual constructive contributions in the Seanad. The Bill itself will be all the better because of this healthy and open debate.

Sitting suspended at 5.45 p.m. until 6 p.m.