States Meeting Transcript - 25/03/2009

STATES OF JERSEY OFFICIAL REPORT WEDNESDAY, 25th MARCH 2009

COMMUNICATIONS BY THE PRESIDING OFFICER ......................................3 PUBLIC BUSINESS – resumption ...............................................................3

1. Payment of Statutory Notice Payments: establishment of precedent (P.34/2009)......3

1. Deputy D.J.A. Wimberley of St. Mary:..................................................3
2. Deputy K.C. Lewis of St. Saviour:.......................................................4 Mr. T.J. Le Cocq QC., H.M. Solicitor General:................................................4 Deputy A.K.F. Green M.B.E. of St. Helier:....................................................5 The Solicitor General:..........................................................................5 Senator T.J. Le Main: ..........................................................................6 The Solicitor General:..........................................................................6 Senator J.L. Perchard:..........................................................................6 The Solicitor General:..........................................................................6 Deputy J.A. Hilton of St. Helier:...............................................................6 Deputy G.P. Southern :.........................................................................6 The Solicitor General:..........................................................................7
3. Senator A. Breckon: .....................................................................7
4. Senator F.E. Cohen:......................................................................8
5. Connétable A.S. Crowcroft of St. Helier:................................................8
6. Senator T.A. Le Sueur:..................................................................8
7. Deputy P.J. Rondel of St. John : ..........................................................9
8. Deputy S. Pitman of St. Helier:..........................................................9
9. Deputy J.B. Fox of St. Helier:............................................................9
10. Senator A.J.H. Maclean:................................................................10
11. Deputy F.J. Hill B.E.M. of St. Martin:..................................................11
12. Deputy J.M. Maçon of St. Saviour:.....................................................11
13. Deputy T.A. Vallois of St. Saviour:....................................................12
14. Deputy G.P. Southern :..................................................................12

2. States Members' remuneration for 2009 (P.24/2009)..................................15

Connétable L. Norman of St. Clement : .......................................................15 Senator S. Syvret:............................................................................16 Connétable J.M. Refault of St. Peter:.........................................................16 The Connétable of St. Clement:..............................................................16 The Connétable of St. Helier:.................................................................16 Connétable J. Gallichan of St. Mary (The Chairman of the Privileges and Procedures

Committee): ............................................................................16 Deputy M. Tadier of St. Brelade:.............................................................16 Deputy G.P. Southern :........................................................................17 Senator A. Breckon: ..........................................................................17

The Deputy of St. John:......................................................................17 Senator S. Syvret:............................................................................17 Deputy P.V.F. Le Claire: .....................................................................17 The Connétable of St. Peter:..................................................................18 Deputy R.G. Le Hérissier of St. Saviour : .....................................................18 The Connétable of St. Clement:..............................................................18

ARRANGEMENT OF PUBLIC BUSINESS FOR FUTURE MEETINGS ....................20

3. The Connétable of St. Mary (Chairman, Privileges and Procedures Committee):.......20

1. Senator S. Syvret:......................................................................20

1. Senator A. Breckon: ....................................................................21
2. Senator T.A. Le Sueur:.................................................................21
3. Deputy S.Power:.......................................................................22
4. Senator B.E. Shenton:..................................................................22
5. Deputy P.V.F. Le Claire: ...............................................................22
6. Senator A. Breckon: ....................................................................22
7. Deputy P.V.F. Le Claire: ...............................................................22
8. Deputy J.A. Martin of St. Helier:.......................................................23

9. Senator P.F. Routier: ...................................................................23
10. The Connétable of St. Mary : ........................................................23
11. Deputy I.J. Gorst of St. Clement:....................................................23
12. Senator A. Breckon:.................................................................24
13. Deputy J.A. Martin: .................................................................24
14. Senator A. Breckon:.................................................................24
15. Deputy R.G. Le Hérissier:...........................................................24
16. Deputy E.J. Noel of St. Lawrence : ..................................................25
17. Deputy A.K.F. Green of St. Helier : ..................................................25
18. Deputy M. Tadier :...................................................................25
19. Deputy T.M. Pitman of St. Helier:...................................................25
20. Deputy G.P. Southern : ..............................................................25
21. Connétable D.W. Mezbourian of St. Lawrence:......................................26
22. Senator S. Syvret:....................................................................26

2. The Connétable of St. Mary:............................................................29
3. Deputy I.J. Gorst : ......................................................................29
4. Deputy P.V.F. Le Claire: ...............................................................29
5. The Connétable of St. Mary:............................................................29

ADJOURNMENT................................................................................30

The Roll was called and the Dean led the Assembly in Prayer. COMMUNICATIONS BY THE PRESIDING OFFICER

The Deputy Bailiff :

I welcome Members to the sitting today.

Deputy G.P. Southern of St. Helier :

Before we start, may I draw Members' attention to a piece of paper that I left on people's desks which clearly states that the company Pound World is insolvent. Clearly, there was a question yesterday and I was asked to prove it, and there it is.

Senator T.J. Le Main:

But quite obviously the directors are not. Deputy S. Power of St. Brelade :

May I make a point of clarification in relation to a comment Deputy Southern made yesterday in his reference to Mercury Construction. I had a phone call last night from the majority shareholder in Mercury Construction, and I have received some information which I will circulate to all States Members which contradicts what Deputy Southern said about the manner in which their employees were treated. Thank you, Sir.

PUBLIC BUSINESS – resumption

1. Payment of Statutory Notice Payments: establishment of precedent (P.34/2009)

The Deputy Bailiff :

Very well. Does any other Member wish to speak on the proposition? Yes, Deputy of St. Mary.

1. Deputy D.J.A. Wimberley of St. Mary :

I cannot really react to what has just been said but I just wanted to say one or 2 words. Firstly, just to re-cap that the question of moral precedent has been gone through. Having decided what we decided in connection with the Woolworths situation, all the arguments were rehearsed at that time and it seems to me that this is a continuation and also that the Minister for Social Security has correctly offered to carry out the wish of this House if we do decide that it was a precedent and to construct a scheme to continue the protection that we should have provided in the first place. What we are doing is putting right a little failure of this House in years past, so really I think that is what it boils down to. On a wider point, it does concern me what Senator Le Main and the Constable of St. Martin said yesterday concerning the behaviour of companies and so on in this regard. It did remind me, it took me back to the previous debate about W.E.B. (Waterfront Enterprise Board), where we heard quite a lot about how the directors must be loyal to and must serve only the company. That rang bells in my mind, alarm bells. It is as if the world consists of little boxes and we live in one little box when we are the director of a company, but this just is not so. It appears that if you are loyal only to the company and serve only the company then, apparently, the workers, the environment, the public and even the shareholders do not count; you are loyal first and foremost to the company. I really do believe there is a systemic problem there which we have to look at. Maybe we should start to recognise that companies should not operate like this, that they should take to heart the fact that they are part of society and not above it. I would ask the Ministers for Economic Development and Social Security if they might like to consider that wider issue when they are setting up schemes and frameworks for economic activity in the future because this path that we are on today and the sort of things we heard from the Senator and the Constable yesterday really worried me. There seemed to be there is an attitude, not in all companies, obviously, but in some, that there is this kind of division. There is me or us, the directors, and then everything else can go hang, and it just will not work. It certainly will not work in the new situation that we are finding ourselves in. I just wanted to make that point because I think that as we go forward and more of these situations arise we do need to look at that kind of question and take it on board, but I would go back to my first point in concluding and say that the case was made the last time we debated this issue in respect of Woolworths. I think the Solicitor General, if I understood him correctly, said that the parallel remedy is here in this case, too, in connection with recovery of the money. If that is possible, then it is possible in this case in a similar way to the way it was possible before, and so I am going to support this proposition.

The Deputy Bailiff :

I see the Constable of St. John is flashing his light but, Constable, I have you down as already having spoken.

Connétable G.F. Butcher of St. John :

You are quite right. [Laughter]

2. Deputy K.C. Lewis of St. Saviour :

Just a brief comment. This company is not en désastre. It is a Jersey-registered company subject to a winding-up order. I wonder if the Solicitor General would clarify the situation reference the company's liabilities to its employees.

Mr. T.J. Le Cocq QC., H.M. Solicitor General:

My understanding from the judgment of the court - and I have not been able to put my hands on the Act of the court which would accompany the judgment and would have given more information in relation to the terms of the order that the court has made - is to the effect that the company was wound up under Article 155 of the Companies Law, which is a just and equitable winding up. It would be normal for the court to make an order when it makes a winding-up order in those terms that would provide for the assets of the company to be distributed in accordance with the priority provisions contained in the Bankruptcy (Désastre) (Jersey) Law, but not having seen the Act of court I am unable to say with certainty that such an order was made. However, the letter that I saw yesterday suggests to me that the liquidators of that company are proceeding on the basis that the priority provisions contained in the Bankruptcy Law apply in this case. The figures that they mentioned in terms of entitlement for arrears of wages are those provided under the Bankruptcy Order for the cap provided. In terms of the position of that company, I think the following is correct, that to the extent that there are claims for arrears of wages, those appear to be payable and are suggested that they will be paid in accordance with the provisions of the Bankruptcy Law or the preferred claim provisions. To the extent that there are claims for payment in lieu of the statutory notice period, there is no suggestion that to the extent that the notice period has not been worked any additional period would be treated as a preferred claim. In fact, the suggestion that I have seen is that it would be treated as an ordinary claim and, therefore, would rank equally with the other unsecured creditors. That does not appear to me to be a position that is inconsistent with the legal position as it currently stands, and so it looks from the paperwork that I have seen that in this particular case the employees will receive the payment that they would have received had the company been declared en désastre but will not, other than the possibility of receiving a claim, receive anything in connection with statutory periods of notice not at this point worked. They, as I say, will rank as unsecured creditors in accordance with the position taken by the liquidators and

would, therefore, be entitled, with all the unsecured creditors, to a dividend in whatever remains of the asset. I was asked yesterday and I think it may be helpful for me to elaborate slightly on the similarities or otherwise - of course it has been mentioned this morning again - in this and the Woolworths position. The principle seems to me to be very similar indeed, that in the Woolworths case a sum of money was identified that reflected unpaid statutory notice period entitlement and an assignment was taken. There is nothing, as far as I can see in principle, subject to all of the caveats that were put before the Assembly on the last occasion, that would prevent that from happening on this occasion. There is, however, a potential practical difficulty. In the last case it would be right to say that the company under question there quite clearly had assets which were available to meet any claim assigned to the States. In other words, whereas there may have been a question as to the extent to which those claims could have been made, there did appear to be assets in Jersey in respect of which they could have been vindicated if appropriately made. I am not in a position to say whether or not that is the same circumstance in the present case. In other words, whereas an assignment might be taken, I am not in a position to say whether there are assets in the company available to meet any claim even were it made. I recognise with gratitude the confidence expressed by Deputy Martin yesterday in the powers of the States legal advisers [Laughter] but the best legal advisers will not be able to secure a payment if there is no money there to meet it. I am not saying that there is no money. I am just saying that I am not able to advise the Assembly one way or the other in that respect.

The Deputy Bailiff :

Does any other Member wish to speak?

Deputy A.K.F. Green M.B.E. of St. Helier :

May I just ask a question of the S.G. (Solicitor General) as well? The Deputy Bailiff :

Yes.

Deputy A.K.F. Green:

It just seems to me strange. I thought under Companies Law directors of companies had to behave in a professional and proper manner. These directors have known for some time that they were going to have to wind up the company, and I really am staggered, I cannot understand why these shareholders, directors or whatever did not give proper notice. Surely we can hold them to account under Companies Law. They had time to give notice to these employees. They have not met their responsibility and surely - the S.G. may advise us under Companies Law - we should seek to ban these people from being directors of other companies because of this behaviour. [Approbation]

The Solicitor General:

I am afraid that is quite a difficult question to address within the confines of this particular debate. To go back to a slightly earlier point made about the duties of directors, the duties of directors are expressly provided for within the Companies Law under Article 74 which says that: "A director, in exercising the director's powers and discharging the director's duties, shall act honestly and in good faith with a view to the best interests of the company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances." Those are, effectively, the bottom line duties of the director. Of course, what a director perceives as the best interests of the company can vary. The best interests of the company, by some directors, can be perceived to be acting in a responsible way. The best interests of the company for directors in another way might be purely concerned with the financial interests of the company and that will very much depend upon the way that the company is set up and the purposes for which it is created. As to whether directors can be held to account, I would need, I am afraid, rather more time to give any kind of comprehensive answer to the Assembly about the ways in which directors can be held to account. It would be right to say, however, that directors are not prima facie, at first blush, liable for the debts of the company if the company cannot afford them. That is the nature of limited liability. It is the company that has the debt and the director does not have the debt. There are limited circumstances, which I am not in a position to advise the Assembly thoroughly on, in which directors, if they have behaved improperly or in some way permitted the company to carry on incurring liabilities whilst insolvent, may be liable in certain circumstances but I would not wish to give the Assembly any definitive advice on that at this point.

Senator T.J. Le Main:

Could I ask the S.G. a question pertinent to Pound World? Is it correct, Mr. S.G., that the directors of Pound World have been pursued by a previous owner in the Royal Court in litigation for quite a long time on ownership of the company and that the company had been folded up conveniently?

The Solicitor General:

I am afraid I am not able to advise the Senator on that at all. I have absolutely no information about that.

Senator J.L. Perchard:

May I ask the Solicitor General further to a point of clarification which will assist me in the way I choose to vote. The difference between voluntary liquidation and the directors seeking a just and equitable winding up is unknown to me. Is it as simple as if a company goes into voluntary liquidation they accept that creditors will be paid and the just and equitable winding up is the reverse, but both companies at the point of winding up are companies that are trading within the boundaries of Companies Law? Could the S.G. explain the difference and is the difference simply to avoid paying your creditors?

The Solicitor General:

I am not entirely sure of the correct answer to the point just made by the Senator. The just and equitable winding up is an order made by the court on the application of directors or other individuals who are entitled to make that application. It can be made on a variety of grounds. Quite often it is made where there is a deadlock between shareholders and it is impossible for shareholders to agree on the future course of the company and it does not necessarily imply insolvency. In this particular case, clearly there is an insolvency as it appears from the judgment of the court, but a just and equitable winding up does not of its nature necessarily imply an insolvency. A liquidation, a voluntary liquidation, is simply a drawing to an end of the life of the company by voluntary means, and I believe it has inherent in it the discharge of all of the proper debts of the company, but a just and equitable winding up does not avoid the payment of those debts if the company has assets to pay them. It depends upon the asset position of the company. I am not sure I can help further.

Deputy J.A. Hilton of St. Helier :

I just was wondering if I could ask for a point of clarification from the Solicitor General also. In the proposition where the employees are listed, it states at the top there was a manager employed to the tune of about £30,000 a year and has been employed for about 10 years. I do not know whether this is correct, and maybe Deputy Southern may answer this point later, but I am a little bit concerned because there have been a lot of questions surrounding the actions of the directors in this case. Is it possible that one of the directors might be the manager as listed in this proposition and could possibly, if this proposition was adopted by the States, benefit from the taxpayer?

Deputy G.P. Southern :

This is completely unknown. You are making pure speculation about a situation. Deputy J.A. Hilton:

I am sorry, I have real concerns about this proposition. I bumped into one of the directors a couple of weeks ago and asked him what was going on with Pound World, and the director said to me that he was looking to bring "Pound Land" to the Island and I felt uneasy about this all along. Really, the only question I am asking .. I do not know whether the manager listed in this proposition is one of the directors employed by the company earning £30,000 a year and has done so for the last 10 years, I do not know. I am asking that question. Could it be that if the States did agree this that, in fact, one of the directors might benefit from this decision to the tune of the money that is being requested, which is almost £7,000? That is all I am asking. It is just a simple question.

The Solicitor General:

Although I understand the question, I do very much regret that I do not think, on the information that I have in front of me, I really can answer it. I do not know how this list was provided and I do not know how these particular roles have been characterised. There is nothing logically impossible, it seems to me, with someone being a director carrying out a different function in the company, but I certainly could not make any inference from this that that is the reality in this case.

Deputy P.V.F. Le Claire of St. Helier :

Could I seek a point of clarification from the proposer of the statement in regard to the question that has just been asked of the Solicitor General?

The Deputy Bailiff :

No, not from the proposer at the moment. He can deal with all this I think, Deputy , when summing up. We cannot have lots of questions for the proposer now. Senator Breckon, did you wish to speak?

3. Senator A. Breckon:

I am a bit concerned about the way this debate has got rather technical, and I say that for a number of reasons. Because if we go back to basics, as it were, and we ask the question what employment safeguards have we got and perhaps the employee should be higher in the share-out when it comes to the break-up in some of these things and the fact that they are not is, perhaps, a failure in the system .. Some with longer memories will remember Queen's Valley where the contractor went, whatever the technical term was, and left people literally high and dry and the welfare system, in particular, picked that up. The former Constable of St. Helier, the late Fred Clark, was particularly active in making sure that some people that had lost holiday pay, bonuses and all sorts of things, the cry went up then something must be done. That is I do not know how many years ago, 20-odd years ago, I suppose. The question would be why has this section, that gives some basic protection for employees of which there is nearly 50,000 or more, been missing for so long? Nobody has really answered that, so perhaps we have a duty of care. The reason I say that is what we are talking about now is we are talking about vulnerable people at the very end of this chain. They are the ones that are bearing the brunt of it, the very sharp end. The fact is that next week they have no money. They have been left high and dry by some company shenanigans that are sort of doing deals and perhaps doing other things but it is not, I would suggest, of their making. That is what we are talking about, the people who are at the end, left in this vulnerable position. They are unorganised. There are a number of little shops. There is no trade union involvement and, therefore, I would suggest that they are vulnerable to that extent that they need an element of protection that perhaps on a temporary basis, not for the rest of their lives, we can provide by a few thousand pounds. I believe it is genuine hardship we are talking about here. If anybody is pulling the stunts it is the system that is allowing people who have financial control to do this. Perhaps it is therewithal that the company is in this situation. If you contrast that, I heard a story at the weekend that somebody unfortunately in a job in a finance-related sector is being made redundant.

Obviously, that is sad for them and they need to readjust, but I can tell Members they are being paid until the end of this year and it is called "gardening leave" or whatever, I believe. They will still be on the books. We are not talking about putting something in place that applies to all employees. Many companies, including the States of Jersey as an employer, have methods and systems of dealing with things when these unfortunate circumstances occur and although that does not include en désastre or insolvency or receiverships or such, people are dealt with properly and, I would suggest, humanely. Again, I think this employment protection issue has been slow to come and that is where I can support this because I think before now we should have put systems in place. We

have had the Woolworths issue which has been pointed out, slightly different because there were some assets there to be set against any liability, it was a lease, it was the property and it was whatever else and there were creditors, apart from the employees, and that is in the process of unbundling I believe but it is not quite complete. I think if matters are going to be put in place, and I think the Minister for Social Security has indicated that with the insolvency issues, then what we are talking about today is indeed a temporary measure. I think probably more importantly what it does demonstrate is that when people are vulnerable, in this case perhaps they are being hung out to dry by the directors and perhaps they feel that by the system, then we can demonstrate that we are inclusive. We are caring. We are sharing in their problem and we are doing it in a practical way which demonstrates to them that we recognise their plight and we are willing to make a gesture, if you like, a temporary measure that gets them over this particular difficult period. There are other issues about training, about re-employment, but at the moment I am sure that those affected feel the same as the Woolworths staff. How can this happen? Who is going to do something? I think by supporting this and getting away from the technicality, for what it is I think it is well worth supporting and I hope that Members will get back to the issue because it is about real people that have lost their jobs quite recently and what they do not want is they do not want us to get involved in the legal shenanigans and making excuses and whatever else. They want us to show some moral but also some practical support and I have no hesitation in supporting this proposition.

4. Senator F.E. Cohen:

This proposition seeks to establish an honourable moral precedent and the proposition itself does not directly refer to Pound World. We seem to be concentrating on the particular circumstances relating to Pound World rather than dealing with the moral principles that lie behind this proposition. It seeks only to establish an interim position pending the adoption, as amended, of an appropriate insolvency scheme. Whatever is agreed it is an interim proposition. We have a moral obligation to support those who, through no fault of their own, are disadvantaged unreasonably due to an insolvency. We should not be afraid of establishing a correct moral precedent because that is what our obligation is. We do need an assurance that this will only apply to genuine claims, and I look forward to hearing the proposer's comments in his summing up in relation to that matter, but if genuine claims only will be supported through this mechanism we should support the principles behind this proposition.

5. Connétable A.S. Crowcroft of St. Helier :

If the former Deputy Jerry Dorey was in the Chamber I am sure he would have been encouraging us to look at the proposition itself very carefully. It does seem to me - and I invite the proposer to comment on this - that the context in which the 3 propositions are made is: "providing that these negotiations are successful". We are not unlocking, we are not writing a blank cheque because that cheque book will not be available unless the negotiations are successful. In (b) where we are referred to the easily accessible and well-publicised system of payments, the next phrase is: "on a similar basis" and it seems to me that "on a similar basis" must refer back to the context which is: "successful negotiations to recover the assets of the company." I do not see the danger that some Members seem to be finding here because I think this is a well-crafted proposition that does not in any way open a blank cheque. It also, of course, reminds us that part of this debate is about moral obligation, as the previous speaker said, but it is also about consistency. The Assembly took a decision after a great deal of debate and a number of different propositions with regard to the Woolworths employees, and if we are going to be consistent it seems to me that this proposition needs to be supported. It is, as I say, not a blank cheque as some Members have said; it is carefully crafted and I would urge Members to support it.

The Deputy Bailiff :

Does any other Member wish to speak? Yes, Senator Le Sueur .

6. Senator T.A. Le Sueur :

I just reiterate that in our previous discussions I think it is clear that a moral precedent has been set, and I have no difficulty in the context of this proposition except that I think it would be helpful for the Minister for Social Security to have some guidance as to what constituted a similar case of redundancy. I think the discussions for the last few hours have suggested that this is open to some differences of opinion as to whether it is similar, and I think in fairness to the Minister we ought to be able to give some clearer guidelines than simply a similar case. I suspect that it may well be that the Minister will need to come back with some guidelines of his own as to how this would be implemented, but I would hate for us to come back time after time debating every single case of insolvency in this House when there ought to be clear guidelines set out. Whether that is possible within the context of this proposition, I would hope that it is because I think there is a clear message, as has been said by several people, to the employees of the companies concerned which maybe overrides on those moral grounds any other duties in respect of Company Law or anything else. Maybe I appear to be saying everything and nothing, but I just need to point out the difficulty in having a wording which simply says "similar cases" without the Minister being quite clear what those similar cases will be.

The Deputy Bailiff :

Does any other Member wish to speak? Very well, Deputy of St. John .

7. Deputy P.J. Rondel of St. John :

I was rather heartened with what the previous speaker said because I was a bit concerned that we may not have heard from the Chief Minister. That being the case, I have one or 2 small concerns but, in general, I am supportive of supporting people who find themselves in this position through no fault of their own. It is for us to make sure that we have the right checks and balances in place. We need to know from the proposer, as has been mentioned by one of the Members, that he has information on Mercury which should come to the floor of this House before I vote. We need to know also from the proposer if the staff have been re-employed. Also, I noted the comments of the S.G. that this is a similar scenario, basically, to what happened at Woolworths, although I was not a part of that debate as I declared an interest. That being the case, I think we have to search our hearts and souls to make sure we do what is right for these people because it is of no fault of their own that they find themselves in this position, and because we have been dragging our feet over many years and not putting the right laws in place, we do owe people certain responsibilities. We can make mistakes like not putting the funding in place for the £3 million overspend now on the Energy from Waste plant. We can pay our directors at W.E.B. as much as the President of the United States and yet the poor people who cannot kick back have to come to the floor of this House to get redress. Therefore, I am going to be listening carefully to the winding-up speech by the proposer, but I sincerely hope you all search your consciences and your hearts when it comes to voting. Thank you. [Approbation]

8. Deputy S. Pitman of St. Helier :

I would just like to point out to the House that the managers of Pound World are not the directors. Also, I find it outstanding that Members of this House can question taxpayers' money going to these people and they do not blink an eyelid to the £4 million that our Chief Minister has just lost for the States. I will be supporting this proposition.

The Deputy Bailiff :

Does any other Member wish to speak? Yes, Deputy Fox.

9. Deputy J.B. Fox of St. Helier :

I have been listening very intently to this debate. I was made redundant back in the late 1960s and it is not a very good era. [Interruption] It is one of my previous lives, before the last one, which resulted in the new one. I have been listening to all the arguments and I think what it is is that we are not just talking about the staff of one company. We are talking about that, yes, we did not in previous States bring forward legislation that would support the workers and safeguard the workers and also to really put the checks and balances in that we are not going to be ripped off by saying: "Oh, this is a good thing. I can avoid my responsibilities" if we have something, and I think that is probably what has been concerning the House. We have just heard a passing remark made that: "This company will close down but I intend to set up another company on a similar vein", and that is, I think, what is worrying us is that we have set a precedent that could escalate. I will be quite honest with you. I think I have had enough reassurances at the moment that we are going to get on with it. We have had the positive signs from Social Security and I would certainly like to reiterate that when I was made redundant Social Security were fantastic in making sure that I had enough to live on. I did not need their support because I had other people that came in and rallied round in support, and I thank people like Alliance Wholesale, et cetera. But, nevertheless, it is a very stressing time and we have got to do honourable things. I will support this proposition but I do so on the understanding that we are going to do something here and now and ensure that we bring in appropriate legislation as soon as possible to make sure that people that do lose their job, for whatever purpose, have rights that are achieved in legal terms to put into their pockets what is due to them as a priority as opposed to a process which, as we all know, in legal terms can take some considerable time. On the other hand, I also hope that we also look immediately at what requirements are needed that should companies close down and then reopen the following day, that we have some form of redress that we can go and seek through the courts compensation where due and stop any temptation of using this route as an easy access point of reneging whatever their responsibilities. I am not talking about legal ones, I am talking about moral ones, and if it includes both then so be it. Thank you, Sir.

10. Senator A.J.H. Maclean:

I am very uncomfortable about this proposition. I am very uncomfortable about the principle of the proposition. We are responsible  for 2 groups of people in this Island in this case. We are responsible, obviously, for the employees at Pound World as we were, indeed, for the employees of Woolworths, and I do not think there is a Member in this House or in the Island that does not have a great deal of empathy and understanding for the difficulties that those employees are faced with at an extremely difficult time and I have no doubt that there will be more over the coming year or so. However, it is the employees and the taxpayers of the Island that we are responsible for. Taxpayers have a reasonable understanding and expectation of us to make a decision that is going to look after the interests of both those groups. I am not sure that propositions coming forward and how many more are there potentially going to be before we have the appropriate legislation to deal with this, and that really is what the key to this is all about. As far as I am concerned a Redundancy Law which the Minister for Social Security and the Social Security Department are bringing forward is an appropriate way to deal with matters such as this but, of course, the need for an insolvency fund is also a way in which employees are going to be most appropriately looked after. What Members have to understand, of course, and I am sure we all do, is that there is a cost associated with such things. It has to be paid for in one shape or form and that is something that needs to be dealt with in an orderly fashion, but these propositions coming forward willy-nilly is not, in my view, the best way in which we are going to be able to look after the interests of all Islanders and not just small groups, however unfortunate the individual circumstances might be. I took on board the comments that the S.G. made when he was referring to Woolworths. "The principle is the same" I believe he said and he is right, the principle is the same but there are differences. Woolworths was a U.K. (United Kingdom) company and, more than that, as far as this House was concerned there were assets available and there is a reasonable expectation that some of the taxpayers' money used to bail out the employees of Woolworths could be recouped. There was not the same level of risk necessarily associated with what I consider to be more of a one-off than exceptional circumstance in terms of the decision that was made over Woolworths. It may well have made a moral precedent but I do not believe the case has to necessarily be followed with each and every future case that should come forward to be, perhaps, discussed by this House. We also have the Deputy of St. Mary raising a couple of points about economic activity. He referred to the fact that we should perhaps look to change the law or make additions and I think what he was really referring to was the potential for changing Companies Law which, frankly, is not the way in which matters such as this should be dealt with. They should be dealt with by having appropriate redundancy legislation and/or insolvency funds in place to deal with employees that, in the future, find themselves in a similar circumstance. I find that we also have before us this morning from Deputy Southern the representation from the Royal Court about this particular winding up or insolvency, and I think the Deputy said, shaking it around earlier on today, that this proves that the company is insolvent. Well, in fact, it does not. It says here, under point 2: "Pound World is insolvent" but reading further on, and this is an interesting point, it says: "However, in light of further developments the directors changed their mind and decided that it would be more beneficial for the company's creditors if a just and equitable winding up were ordered rather than the creditors winding up." The question that springs immediately to mind is that are these directors, in fact, deciding to take that course of action to have an orderly winding up as opposed to insolvency because they are planning to set up a new business and set up within a matter of weeks or months in some new entity? I think that probably is the reason that that decision was taken. There are many, many issues that have to be considered when making what is undoubtedly an extremely difficult decision for Members in this House.  We have former employees of Pound World sitting up above looking down upon us and it is very difficult. I empathise with their circumstances. As I said earlier I am sure we all do but we also have a responsibility to the taxpayers of this Island and, on that basis, I do not feel, in this circumstance, I can support this proposition and I would recommend or ask other Members to consider very carefully before making a decision what is undoubtedly a very difficult decision themselves. Thank you, Sir.

11. Deputy F.J. Hill B.E.M. of St. Martin :

I feel I must stand and really say how disappointed I am by the Senator Maclean speech. [Approbation] I really am. I was not going to speak but I could not allow this to go without drawing attention to Members. We are Members of this House to look after people in good times and in bad times. We are here to look after the taxpayer. We are also here to look after all taxpayers whether they are in work or out of work and I would hope that we have got a heart big enough to take care of everybody, particularly when they are in bad times. I shall certainly be supporting the people I have served not because they are here but because they are taxpayers. They are part of our community and I feel absolutely distraught to hear Senator Maclean. I really am upset and I would hope that Members will support Deputy Southern 's proposition.

The Deputy Bailiff :

Does any other Member wish to speak? Very well. I beg your pardon, Deputy Maçon.

12. Deputy J.M. Maçon of St. Saviour :

I wish to be very brief. There are 2 things I want to draw to Members' attention. We have been drawn to the sum of £16,000. However, it is my belief that, in these times, redundancies will continue and that if we do establish this precedent that, yes, more money will be paid in that regard. However, the proposition does call for an insolvency fund. It depends on how that insolvency fund is funded because, naturally, that may come from the taxpayer which may mean that this fund may whittle on. Something else I want to draw and this is the problem as I see it. The problem is we do not have good enough law enforcement because the companies are able to get away with not being able to pay what they, under Jersey law, are supposed to be paying, as we have seen in the Woolworths case and I know we are well aware of this. My feelings on this is that the problem comes from not having good enough law enforcement and that we need better mechanisms that will allow us to be able to obtain the funds from companies and not necessarily having to rely on the taxpayer of Jersey to bail people out. We have failed in this because there has been a loophole which has been able to be exploited, and I hope that the Minister for Social Security, while considering the insolvency fund, will also bring forward proposals to allow the Viscount, like under

the bankruptcy system to be able to go in and get the funds from companies, to do the same in the case of insolvency because that is what I think we need. We cannot let companies get away with treating Jersey employees in the wrong manner and we have got to be able to come up with systems to allow us or the States or whatever to be able to go into companies and get the funds that are owed to employees. That is the road I think we should be going down and I cannot support this proposition. Thank you.

The Deputy Bailiff :

Does any other Member wish to speak? Deputy Vallois?

13. Deputy T.A. Vallois of St. Saviour :

I was not going to speak but I just thought I would make a comment with regards to the Redundancy Law. I think this House has to remember that this should have been brought in years ago [Approbation] and we are in this position today because previous Houses did not do so. This proposition asks us to put in an interim to help those until the Minister for Social Security can come to a head with the law in a proper form. That is all that we are asking to do. Forget Pound World. Forget the businesses. Just remember that we are being asked to help taxpayers, not only those that are still paying taxpaying money but those who are out of work. We are responsible to the people outside, whether they are in businesses or out of business. I think people are forgetting that. Yes, okay, Pound World may be closing down, insolvency, and they may be setting up another business, but at the end of the day we have not got a redundancy law in place and that is the failure of this House. We have to go forward, put an interim in place until proper legislation is put in place. I have 100 per cent confidence in the Minister for Social Security to put this through shorter rather than later. Thank you. [Approbation]

The Deputy Bailiff :

Does any other Member wish to speak? Very well, I call upon Deputy Southern to reply.

14. Deputy G.P. Southern :

Before I start I want to deal with the comment made by Deputy Power about the Mercury workers and respond to it. I have not seen the comment but certainly an ex-employee of Mercury did tell me that he had been given no notice and sacked on the spot. However, I am aware that other employees from Mercury were given a month's notice and pay in lieu of notice which saw them to the end of January, by and large. However, whether I am misinformed or well informed about the instant sacking, that is a matter of irrelevance because the date on this proposition, as amended, is 4th February so it does not apply to Mercury workers. It only applies from 4th February. Perhaps I will deal with Senator Maclean first because I too found his speech extremely disappointing and he seems to be trying to split hairs. I thank the Solicitor General for the clarity of his exposition, certainly this morning. I think it is clear to me that there is more than one way of a company being insolvent and it does not really matter which way that occurs. You are still left with a limited amount of assets, you are not allowed to trade as an insolvent and the end result is that the company goes into some form of administration, whether it is the Viscount or whether it is administrators; that is what happens. When that happens the company ceases and the administrator comes in and gathers the assets and divides them up. In the division of those assets, it seems to me whatever way in which the company goes insolvent, the workers do not have first claim apart from wages already owed and holiday pay not taken. That is the only thing they have priority on, otherwise they are treated as unsecured debtors and go to the bottom, if you like, of the pecking order. Senator Maclean, in picking up a phrase in the document, skipped past: "This court is satisfied from the evidence that Pound World is insolvent and that it cannot pay its debts as they fall due." I do not know what definition of insolvency he wants but that to me says insolvent.  He, like many others, pointed perhaps to failings in the system and said: "We have a dual duty (a) to the taxpayer and (b) to employees." Hang on, who are these employees? They are taxpayers, or they were until they were made redundant. They were taxpayers. [Interruption] The good Senator had his go and I

am attempting to deal with his comments. They pay social security. They are the taxpayers and, yes, many people, the Deputy of St. John, Deputy Hill, have said we have a duty to search our consciences and look after these people, when? Senator Maclean made a great deal of the proper way to do this is with an insolvency fund. When will we get an insolvency fund? Perhaps 12 months if we are lucky. When will we get redundancy law in place to deal with other situations? Perhaps 7 months. The question Members have to ask is when do we need this assistance to people? When do we need this support? Do we need it 6 months down the line? Do we need it in 12 months down the line? No. Are insolvency redundancies happening today? Yes, they are. That is when we need to solve it. It is no good moaning, I do not think, about the ways in which directors may or may not behave, and I have every sympathy with those who say: "Well, hang on, that director is getting away with murder. There must be some way to get them." There is not a way to get them. Limited liability means just that. The company is liable. The directors are not. Unless we are going to change the law today and chase them then we can do something about that apparent injustice, but we cannot. What we are dealing with is workers made redundant now today and all the speculation about what we might do otherwise and how unfair systems are will not deliver any assistance to anybody, and that is what Members must consider today. How can we deliver? In considering that they must hark back to the decision of 4th February when it was said very clearly by Ministers, by the Chief Minister, by the Minister for Social Security that, hang on, we are setting a precedent here. They called it a moral precedent but nonetheless a precedent. It would be grossly and manifestly unfair if we deliver this package for Woolworths workers and then sat on our hands. Senator Maclean is shaking his head, maybe he did not say it, but it is the statements that came from the Council of Ministers. Clearly, it would be grossly unfair if we applied it to Woolworths workers and did not apply it to other workers in similar situations. As the Constable of St. Helier clearly pointed out, pointed out accurately I believe, the similar situation refers to the early part of the text which says: "To enter into negotiations for the allocation of the debt from those workers and then to take on the company in terms of its assets and to seek recompense." That parallel, clearly explained by the Solicitor General, is a clear parallel with Woolworths. There are some differences in the sense that we knew they were Jersey assets in the Woolworths case so we knew there was something we could get back. We do not know the extent of the assets of companies that will go bust now, already or in the future, but, nonetheless, the assignment of those debts from the workers is the way we can deliver support to them now and chase that money later.  Yesterday, Deputy Martin pointed out very clearly, while praising our legal department  no end as she does,  who is  best equipped to  chase that money and to  seek that recompense, the individual employees or the States of Jersey with its clout and its expertise? The answer must be the States of Jersey. Again, as pointed out by several speakers today, clearly this is an interim measure. It is not the final solution. It is not the ultimate answer. That is to come. An Act is 10 years overdue but, nonetheless, it is on its way. It is an interim measure to tide us over and if we do not vote for this today, what are we going to do? Everyone who came saying: "Oh, we cannot go this way", everyone who said that yesterday and cast doubts upon the accuracy, the validity of what we are about to do or what I hope we are about to do, where were they with the alternative? Where is their amendment? Where is their solution? Because we have a problem now. People are being laid off through insolvency and left high and dry, in the words of Senator Breckon, left high and dry. So where are their answers? Where is the Minister for Treasury and Resources today with his answers, with his solution? I am told he is on holiday. Perhaps he should have been here, perhaps he has an answer. But at least I would then be able to ask him, when he

questions whether we can afford to do this, I say can we afford not to do this? Can we afford not to protect our workers and give them support at this critical time? I would ask him, were he here, why surely this is a means to support the economy. Where is your stabilisation fund with its £140 million sitting in it? What is it going to be used for? Is this not appropriate use for a small proportion of that £140 million? I would have thought it is because otherwise these people will simply go straight on to Income Support. If you receive notice payments you are not eligible for Income Support. Already they are balancing the system. We will be paying out one way, through Income Support in many cases, or another way through statutory notice in the other way. I will just briefly refer to the letter that the Solicitor General referred to earlier and it is a letter from the receivers to the employees: "As you are aware, I, together with my partner Alan J. Roberts, was duly appointed joint liquidator of the above-named company on a joint and equitable basis under Article 155 of the Companies (Jersey) Law 1991 by Act of the Royal Court of Jersey, 5th February 2009, the relevant date. As a consequence, the company is no longer able to make payments to you under your contract of employment .." The contract of employment goes by the board. That is the way it happens. You may not like it; that is how it happens. ".. which is, therefore, terminated for reasons of redundancy with effect from 19th March 2009. The joint liquidators and their staff will deal with all aspects of the liquidation, including all creditor claims." It then goes on to say that: "You will be paid for any work you have done and for holiday owed," and that the payment is limited to a certain sum.

Senator S.C. Ferguson:

May we ask what the date of the letter is? Deputy G.P. Southern :

It is coming. "Your contract will be terminated for reasons of redundancy with effect from 19th March 2009." The date on the letter is 19th March 2009. There is your formal written notice on the day your contract is terminated. That is the notice formally that they got. I ask Members to support this motion. It might not be perfect, but it is what we have in front of us. Why this is such a critical decision and why it is such a difficult decision, because it is not talking about theoretical, it is talking about reality. For whatever reasons we have found ourselves in a position where redundancies through insolvency are happening and we have not got the tools to deal with it, to support the workers. This is the best option available. This can tide us over until we finally get the law sorted, amended. Please, Members, please vote for this proposition. If I have not answered anybody's questions that they feel is essential, I will take any more, but otherwise I am calling people to support this motion and I call for the appel.

The Deputy Bailiff :

Very well, the appel is called for.

Deputy K.C. Lewis :

Would (a) and (b) be taken separately in the proposition, as amended? The Deputy Bailiff :

Deputy Southern , how do you wish to take the vote upon this matter? It is quite hard to see how (a) and (b) could be separated, I have to say.

Deputy G.P. Southern :

That is my feeling. This comes as a package, I think. The Deputy Bailiff :

(a), (b) and (c) together, yes. Very well, I invite all Members to return to their seats and the Greffier will open the voting.

2. States Members' remuneration for 2009 (P.24/2009) The Deputy Bailiff :

Very well. Then we come to the next matter of Public Business, which is States Members' remuneration for 2009, P.24 lodged by the Connétable of St. Peter. One moment, I think the Connétable has a matter to raise.

Connétable L. Norman of St. Clement :

Yes, I apologise for this late intervention and while I am reluctant to suggest that a new Member should not be given his day in the spotlight, I have come to the view - and I know it is a view shared by at least some Members - that it would be inappropriate, unreasonable and in many ways discourteous to debate this matter until we have had the report and the recommendation from the Remuneration Panel, when at least we would have some informed and evidence-based submissions.

So I would like to propose that this item be deferred and I do not know if it is possible to add to that until the Remuneration Panel's report has been published. I would like for you to accept that proposition.

The Deputy Bailiff :

Well, you are certainly entitled to propose without notice that it be deferred. I am not sure you can propose it be deferred indefinitely. I think, Connétable , you must propose it be adjourned to a specific date because that is what Standing Orders require. You can just put one in June or something like that.

Senator S. Syvret:

On a point of order, could I ask the opinion of the proposer of the substantive proposition whether he would voluntarily agree to the deferral of this until such time as the panel has reported?

Connétable J.M. Refault of St. Peter :

I am minded not to give way and defer the proposal until later on in the year. The Deputy Bailiff :

Very well. We have a proposal from the Connétable of St. Clement, as he is entitled to bring without notice, that it be deferred and I think you must put a date in, Connétable . 30th June is suggested by the Greffier.

The Connétable of St. Clement :

Yes, I will propose the 30th.

The Deputy Bailiff :

Is that proposition seconded? [Seconded] Very well, does anyone want to say anything briefly? The Connétable of St. Helier :

Yes, I would like to know when we can expect to have the report from the panel that has been appointed otherwise it seems that we would be better off having the debate.

The Deputy Bailiff :

Perhaps the Chairman of the P.P.C. (Privileges and Procedures Committee) can help on that.

Connétable J. Gallichan of St. Mary (The Chairman of the Privileges and Procedures

Committee):

Yes, I believe that was addressed in the comments of P.P.C. The board sent a letter saying they hoped to be in a position to make a final recommendation by late May or early June at the latest.

The Deputy Bailiff :

Very well. Deputy Tadier ? Deputy M. Tadier of St. Brelade :

Yes, I do feel compelled to speak. I would say, first of all, that I do feel uneasy about the original proposition. I am not minded to support the proposition whether it be debated today or not purely on the grounds that I think a body has been set up to look into it. But my objection is that I see this effectively as a guillotine motion and, irrespective of what my personal opinion is of it, this type of thing could be used against any of us. I think it would be preferable and also I think it needs to be noted that the Connétable of St. Peter , whether you agree with him or not, has put a certain amount of work into bringing this today. He had prepared his case, so I would prefer this to be debated here, to either be adopted or rejected, and the good Connétable of St. Clement can make his case on the floor during the debate.

Deputy G.P. Southern :

Yes, I just want to make a point that we have a system in place with a purpose to decide what our remuneration should be and that the proposition itself, I believe, is incorrect in the sense that what it should say is paragraph (a) to do away with the system we have; and (b) to volunteer to give up £1,000. That first paragraph, to do away with the system we already have, is not at question, yet we have it in place. The proposition should say to scrap the system we have rather than to voluntarily give up £1,000. I do not believe it is appropriate.

Senator A. Breckon:

Certainly, in defence of an individual Member, I wonder whether I may seek some guidance from the Chair. I believe Standing Orders indicate the rights that an individual Member has to bring a proposition and other Members' rights to defer that and I think there is a timing on it, if memory serves me right. What I am concerned about is whether Members agree with the Connétable 's proposition or not, I am concerned that it has to be taken out of time. I wonder if you could give some guidance from the Chair.

The Deputy Bailiff :

Certainly the Member is ultimately entitled to have it debated. I think it can be deferred 3 times from memory, although the Greffier will correct me if I am wrong. So it could be deferred 3 times but then after that the Member is entitled to insist upon it being debated.

Senator A. Breckon:

So there is no time on that, it is just 3 times?

The Deputy Bailiff :

It is 6 months. Senator Syvret. I am sorry, I have seen the Deputy of St. John first. The Deputy of St. John :

As the seconder of the main proposition, I think it is discourteous given that even today the proposition was pushed to the end of the Order Paper, when in fact it was delayed from an earlier session. I think it is totally discourteous to the Constable of St. Peter that he is being treated in this way. Now it has been on several Order Papers, for it now to be delayed until June, I think we are riding roughshod over an individual Member's proposition.

Senator S. Syvret:

As much as I can understand where Deputy Tadier was coming from, as has been explained, it is not possible under our system for a Member's individual private debate to be held out indefinitely. It can only be done on 3 occasions then ultimately the Member does in fact have the right to have their case heard. I do not think it is analogous to the guillotine motion whereby you have begun a debate on a subject and that debate gets guillotined before many Members have a chance to speak. The 2 situations are, I think, quite different. I really do hope we are not going to have a profoundly long debate on this subject. It is never terribly edifying on the States to spend three-quarters of an hour arguing about procedural matters.

Deputy P.V.F. Le Claire:

In the Constable's proposition in part (b) he asks to request the Privileges and Procedures Committee to notify the States Members Remuneration Review Body that it should cease work on formulating recommendations on the level of remuneration for elected Members for future years until the last quarter of 2009. What effectively is being asked now by having this deferred until the end of June is to allow them to complete their work, which negates part (b) of the proposition. I think it does interfere with the rights of .. I am trying to say, has it been withdrawn? Right, okay, I beg your pardon.

The Connétable of St. Peter :

Just to clarify the matter for Deputy Le Claire, I did withdraw item (b) after seeing the report from P.P.C. I thought it more prudent to withdraw that section. Apologies if you were not aware of that. Just moving forward, I would just like to say I was not expecting a deferment, I was expecting to be debating the suspension of the Standing Order and I did prepare a few words for the Assembly and with your permission I would like to read those out to the Assembly. Basically, I must make it clear that my proposition P.24/2009 does not set out to debate what we, as States Members, should receive but that we recognise the very difficult situation that many people in Jersey are now finding themselves in and if we were suspending Standing Order 106, which is what I was expecting, that we would enable the Members to fully engage with the principles of leadership and example to all Island businesses, landlords and employees and to act in and demonstrate empathy with the population of the Island. That is the fundamental principle behind P.24/2009. It is not debating about what we, as Members, should or should not receive in remuneration, it is debating whether we should, as an act of leadership, make a very positive gesture that we are going to support people that are becoming more and more in need every day as we move deeper into this recession [interruption].

The Deputy Bailiff :

One moment, this is the Connétable 's proposition which Members are saying should not be debated. I think it is reasonable if he should have a moment or 2 to explain why he wants it debated today.

The Connétable of St. Peter :

I will conclude very shortly. It has been very easy to see that over the last few hours of yesterday afternoon and today it has been very easy for Members to give away taxpayers' money. I think the people of Jersey will see another story in what is going to outflow from today.

The Deputy Bailiff :

Now there are a number of speakers on whether we should debate this now. Deputy R.G. Le Hérissier of St. Saviour :

Yes, I think the Constable has an absolute right to do it this morning. I think this matter has been bubbling up for some time, it is a matter of intense frustration on both sides to people and I believe we should, as Deputy Tadier said, go ahead and get the matter resolved.

The Deputy Bailiff :

Very well. So then the matter before the Assembly is the proposition of the Connétable of St. Clement. Connétable , do you wish to reply to ..?

The Connétable of St. Clement :

I think I would, just very, very briefly. Just to say particularly to Deputy Tadier this is not an attempt at guillotine by any means and I have apologised and I do again to the House for the late intervention, but every Member - and I reinforce this - has the absolute right, and I agree with it, to have their propositions debated in this House. I think it is better, always better, to have an informed debate, an evidence-based debate if you like, with the information that we are going to get from the panel. I do think it is discourteous to attempt to second-guess the panel before they have completed their work - it has only got a few weeks to go, as we know - to impose our views on what they are going to say before we know what they are going to say. Because if we start doing that sort of thing, I wonder how many people are going to step forward to serve on panels to advise and guide us and then we start guiding them before they have completed their work, so I maintain the proposition.

The Deputy Bailiff :

Very well, the appel has been called for so the matter is for or against the proposition of the Connétable of St. Clement that the debate on P.24 be deferred to 30th June.