State owed €183m over failure to pay redundancies

MORE THAN €180 million is owed to the exchequer by companies that failed to pay statutory redundancy to their workers after laying them off, a Dáil committee was told yesterday.

The Committee of Public Accounts heard that from January 2009 to May 2010, over 80,000 statutory redundancy claims were paid, costing €789 million.

Secretary general at the Department of Enterprise, Trade and Innovation Séan Gorman said €183 million was owed to the exchequer by companies that failed to pay statutory redundancy to their workers. Some €39 million of that dated back to before 2004 and some has been due since the 1970s, Mr Gorman said.

He also said a person laid off today and seeking statutory redundancy from the State would be waiting until next May to have their claim processed.

Fianna Fáil deputy Seán Fleming asked the secretary general how much of the €183 million they expected to recoup, given they could not get some of it back during the economic boom.

He described the pre-2004 sums as “fictional debts” and questioned the reasoning behind keeping the figures on the department’s books.

Mr Gorman acknowledged it was a challenge to recover the money and some was locked in protracted liquidation or receivership proceedings.

The department was trying to strike a balance between walking away and waiting, he said, and even some of the older debt could still be recovered.

Asked about the Aer Lingus redundancy scheme in 2008, which involved the laying off and re-employment of staff to work at the new Dublin airport terminal, Mr Gorman said they had not yet made a decision on whether or not the scheme would be paid and were taking legal advice.

The company had already paid the terms to workers and were seeking a 60 per cent rebate, he said.

He also said the department had received 350 claims for workers from the Dublin Airport Authority, which is hoping to avail of a similar scheme.

Committee chairman Bernard Allen said the Aer Lingus scheme was “a bogus redundancy scheme” and taxpayers shouldn’t have to pay for changes in the terms and conditions of staff.