A Dundalk company set up to help reduce unemployment sacked two workers who refused to give up their back-to-work allowance payments, an Employment Appeals Tribunal was told.
The two workers sued the company, Pacsort Ltd, for unfair dismissal after it discovered they were in receipt of the allowance and sacked them.
The tribunal heard that the company, which sorts bottles for the Guinness group, had a policy of deducting from workers' wages the equivalent of any back-to-work allowance they were receiving.
A spokeswoman for the Department of Social and Family Affairs said yesterday the allowance was paid directly to workers, and was not supposed to be recouped by employers.
The two men, Mr Patrick Gray and Mr David McKee, lost the unfair dismissal case, however, because they had not challenged Pacsort's policy of deducting the allowance from wages.
Both had denied receiving the allowance. In a majority decision, the tribunal found they had tacitly accepted the company's policy.
The back-to-work allowance is paid by the Department of Social and Family Affairs to long-term social welfare recipients who find jobs. The scheme is designed to provide social welfare recipients with a financial cushion to help them to return to work.
For the first year in employment, they receive 75 per cent of their social welfare payment, with reduced payments applying in the following two years. Employers may also benefit through reduced PRSI payments.
The tribunal heard that Mr Gray and Mr McKee had been receiving the allowance for seven and two months respectively before management at Pacsort became aware of this.
The company's production manager told the hearing, which took place last June, that workers were informed at the outset of Pacsort's policy of deducting the allowance, and a formal contract would be signed. Mr Gray and Mr McKee both said they had been unsuccessful in their applications for the allowance, he said.
When he discovered they were receiving it, management took the view that money was being withheld from the company and dismissed them.
The tribunal heard the company was still seeking reimbursement of the allowance from the two men.
In a written statement to the tribunal, the company said Department of Social and Family Affairs officials were aware it was making the deductions.
