While now called Sectoral Employment Orders (SEO`s), the National Agreements previously binding the Construction Employers and their workers, until the Supreme Court “Camlin” Decision in May 2013, are back. The relevant Order signed by Minister Pat Breen, named the Sectoral Employment Order (Construction Sector) 2017 (the “Order”), took effect from 19 October 2017. This Order, as before, provides for mandatory terms and conditions in the Construction sector generally, including pay, pensions, and sick leave far above statutory minimums.
Background to the Sectoral Employment Order
Readers of my previous BLOGS on the Morgan McManus website will be aware that conditions of employment in the Construction sector were previously regulated by the Registered Employment Agreement (REA) system. Although the REA system had been in place since the Industrial Relations Act 1946, this system was declared unconstitutional in 2013 by the Supreme Court in the Camlin Decision; also known as McGowan v The Labour Court. I wrote about this Decision in my BLOG “Supreme Court declares that Registered Employment Agreements are Unconstitutional”.
The Industrial Relations (Amendment) Act 2015
To rectify matters, rather than have industrial unrest in the Construction and related industries, the Government enacted the Industrial Relations (Amendment) Act 2015. (“the Act”). This Order came about by means of the SEO framework which was established by the Act.
Labour Court Consultation on the SEO
In April 2017 the Labour Court (the “Court”) received submissions from the CIF, UNITE the Union, the Irish Congress of Trade Unions, and the Trustees of the Construction Workers Pension Scheme. Members of the public and other bodies were also invited to make submissions, but were not given a lot of time (see my BLOG “Labour Court Consultation on Registered Agreements for the Construction Sector”). It would appear that some of the SEO provisions were copied almost exactly from the previous Construction Industry REA. Following discussions, the Court made a recommendation to the Minister, who in turn signed the SEO into law.
Principal Terms under the Construction SEO
The new minimum hourly rates of pay are as follows:
• New Entrant Workers: €13.77 per hour
• General Operatives with more than 1 years’ experience (Category 1 Workers): €17.04 per hour
• Skilled General Operatives (Category 2 Workers): €18.36 per hour
• Craft Workers: €18.93 per hour
• First year Apprentices: 33.3% of the Craft Worker rate, to increase up to 90% for fourth year Apprentices
It will be noted that, as before, these rates far exceed the statutory minimum wage, and that they are approximately 10% higher than they had been under the REA.
The Order also provides for ‘time and a half’ or ‘double time’ payments for various unsocial hours e.g. time and a half for “Monday to Friday normal finishing time to midnight”, and double time for Sunday.
Pension Scheme and Sick Pay Scheme under the SEO
The Order provides for mandatory pensions and sick pay schemes. The Court recommended that both schemes be modelled on the respective schemes that had existed in the construction sector for many years (by virtue of the REA). Both schemes are to be funded through a mixture of employer and employee contributions at rates set by the SEO, and the Pensions Scheme is to include a Death in Service aspect also.
The Employee unions sought the inclusion of an Employee Travel Allowance in the SEO, which the CIF disagreed with. The Court decided not to include a travel allowance provision in the SEO.
Dispute Resolution under the Construction SEO
Finally, the Order includes a new Dispute Resolution procedure. No strike or lock-out is allowed unless and until all stated Dispute Resolution procedures have been exhausted. It requires employees to raise individual disputes with their employer at local level first (with a requirement on the part of the employer to respond within 5 days), before referring it if necessary to the Workplace Relation Commission (WRC), which decision can then be appealed to the Court.
In terms of collective disputes, the dispute should be raised with the employer first before being referred to the Conciliation Service of the WRC if necessary. This decision can in turn be referred to the Court for investigation and recommendation.
Who is affected by the Construction Sectoral Employment Order?
The SEO is legally binding on Construction sector employers and its terms are enforceable in the WRC. The definition of the sector is wide and covers “Building Firms” and “Civil Engineering Firms”, each of which is given a broad definition, and includes for example companies involved in the “construction, reconstruction, alteration, repair, painting, decoration and demolition of” a variety of structures. As before with the REA`s, employers falling within these definitions are bound by the terms of the SEO, whether or not they are CIF members and whether or not they agree with the SEO and its terms.
This does seem a little unfair, bearing in mind that the previous REA`s were struck down by the Supreme Court due to lack of broad consultation and, as I have pointed out in my BLOG above, not a lot of notice was given to enable other bodies make submissions.
So, what has changed since the previous REA`s?
Not a lot!
Employers in the construction sector should without delay ensure that their standard terms and conditions meet the terms of the SEO; otherwise expect a multitude of Complaints to the WRC. It`s “as you were, gentlemen!”
For further information on Employment Law, contact:
Morgan McManus Solicitors