Statement2 March 2007

Statement by the Department of Community, Rural and GaeltachtAffairs on the awarding of a contract for ferry services to Cape ClearIsland

The Department of Community, Rural and Gaeltacht Affairs affirms that it isunder no legal obligation with regard to the employment conditions of any person employed under the contract that was in place with the company Naomh Ciarán II Oileán Chléire Teo, that came to an end on 28 February2007. The state complied with all conditions relating to redundancy in 2001when payments of €190,691 were made to the staff employed by the ferryservice prior to the service being transferred to private ownership. Having paidredundancy to the workers, the State clearly has no further liability to them.

The provisions of Statutory Instrument 131, regarding the protection of employees where business was transferred, does not apply in this case or inany of the other of the Department’s contracts that provide subsidised ferryservices to the various islands. There is a clear exemption of seagoing vesselsin this Statutory Instrument and in the European Commission regulations onwhich the Statutory Instrument is based. The Minister has offered to have hisofficials meet SIPTU officials out of courtesy to brief them on why theTransfer of Undertakings directive is not applicable to contracts entered into by the Department for the provision of subsidised ferry services.3.BackgroundTraditionally, for many years up to 2001, the provision of a ferry service toCape Clear Island was handled directly by the State. The State (TheDepartment of the Gaeltacht) owned the vessels that were in use – Oileán nanÉan and the Naomh Ciarán II. The service was managed by a committee thatcomprised representatives of Cape Clear Island and the Department of theGaeltacht.4.In 2001, a decision was made to transfer the service to a private company - Naomh Ciarán II Oileán Chléire Teo - that had been established by the skipper of the service. A contract was agreed with this company and, as part of thatcontract, it was agreed that the State (The Department of Arts, Heritage,Gaeltacht and the Islands) would lease the vessel, the Naomh Ciarán II, to thecompany and pay an annual subsidy of €104,126 for a period of 5 years, fromJune 2001 to June 2006.5.As part of that arrangement, and under the terms of the contract agreed, theState made redundancy payments of €190,691 to the four crew members whowere employed by the company before the transfer.6.Unfortunately, the new company’s principal, who was skipper of the ferryservice, died suddenly during the term of the contract. ComharchumannChlére bought the company and continued to run the ferry service under thecontract that was in effect.