Noonan ‘cannot interfere’ in IBRC row

Finance Minister Michael Noonan has said he cannot interfere in the dispute between IBRC and its staff over redundancy payments which could see the latter taking industrial action.

Just over 100 staff remain at the financial institution, who are members of finance union IBOA, have backed action unless they are given four weeks’ pay per year of service, the redundancy terms which were on offer at the financial institution a little over a year ago.

The amount has been reduced to two weeks pay per year of service since February 2013 when the special liquidators were appointed to IBRC.

If the terms are not increased the workers have threatened to withdraw co-operation with the preparations for the disposal of the remaining IBRC loans.

Mr Noonan was asked by members of Dáil whether he supported the claims of the workers and whether he was going to intervene.

He said senior officials in his department are engaging with “all parties” in relation to the IBOA members’ concerns. He also said the special liquidators had said they were “highly cognisant” of the issues raised by the staff representatives.

The minister said the liquidators had indicated that significant steps have already been taken to address those concerns “including the extension of all staff contracts out to the end of March 2014 and in many cases out to the end of 2014, almost two years following the commencement of the liquidation”.

“This should provide some reassurance to IBRC staff relative to the common position in liquidations where staff contracts are terminated immediately. It remains the position that some staff may, in time, be re-hired by Nama, its service providers or other purchasers of the IBRC assets as the sale processes are completed,” the minister said.

However, he said in relation to the redundancy terms being sought, the voluntary severance scheme in place before the liquidation was no longer operational and that IBRC employee contracts were terminated in February 2013 on the appointment of the special liquidators.

“As a result of the termination of the employment contracts, employees were entitled to apply for a statutory redundancy payment and a statutory notice payment, subject to the limits prescribed by statute,” he said.

“While my officials will continue to engage on this matter, I am not in a position to interfere directly. There are standard rules which apply to the distribution of the assets of companies in liquidation and it would not be appropriate for me to interfere with these rules. Such interference could have the impact of diverting the assets of IBRC from one category of creditor to another outside the normal Companies Acts priorities,” Mr Noonan said.

“Any such interference would be open to challenges in the Irish Courts by unsecured creditors.”

An IBOA spokesman said it noted the minister’s commitment to further engagement by his officials with the union and the staff in IBRC.