Comment on P.34/2009: Payment of Statutory Notice payments establishment of precedent.

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A decision made (16/03/2009) regarding: Comment on P.34/2009: Payment of Statutory Notice payments establishment of precedent.

Decision Reference: MD-TR-2009-0037
Decision Summary Title:	Comment on P34/2009: Payment of Statutory Notice payments: establishment of precedent		Date of Decision Summary:	12th March 2009
Decision Summary Author:	Kevin Hemmings, Head of Decision Support		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Comment on P34/2009: Payment of Statutory Notice payments: establishment of precedent		Date of Written Report:	12th March 2009
Written Report Author:	Kevin Hemmings, Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: Payment of Statutory Notice payments: establishment of precedent (P.34/2009): Comment
Decision(s): The Minister approved the comment on P34/2009: Payment of Statutory Notice payments: establishment of precedent to be presented to the States at the earliest opportunity.
Reason(s) for Decision: To enable the Minister’s comment on P34/2009: Payment of Statutory Notice payments: establishment of precedent to be presented to the States.
Resource Implications: Other than those detailed in the report there are no further financial or manpower Implications.
Action required: Head of Decision Support to forward the comment to the States Greffe and request that it be presented to the States at the earliest opportunity.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed: 16th March 2009		Date of Decision: 16th March 2009

Comment on P.34/2009: Payment of Statutory Notice payments establishment of precedent.

Comments on P34/2009: Payment of Statutory Notice payments: establishment of precedent

This proposition requests the Minister for Social Security to liaise with the Minister for Treasury and Resources to agree the most appropriate manner in which to fund the requested scheme. Whilst the Minister for Treasury and Resources prioritised 2008 underspends to fund the £140,000 payments needed as a result of the States’ approval of P9/2009, the Social Security Department has incurred legal and administrative costs in progressing those payments and taking the associated legal action. The Department is currently attempting to absorb these costs as it is not clear at this time whether the action to recover the payments made to the ex-Woolworths employees will be successful.

The financial and manpower implications statement in this proposition are significant:

“There will obviously be some demand on officer time to administer such a scheme. These costs may be met from departmental allocations. The cost of the coverage required will depend on the depth of the recession and the number of consequent insolvencies and redundancies. I am not in a position to estimate these costs but merely point out that we have an obligation to meet them given the precedent we have set.”

The Minister for Treasury and Resources asks States Members to seriously consider whether they can agree such an open-ended commitment or whether it is preferable for the Minister for Social Security to consider any further occurrences on a case-by-case basis. This still leaves the problem of funding any future payments. Whilst it may be possible to make a further small provision from 2008 underspends, any significant expenditure would require the Minister for Treasury and Resources to bring a further proposition to the States for additional funding, which the Minister is reluctant to do.