INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
CONSTRUCTION INDUSTRY FEDERATION
- AND -
Chairman: Mr Hayes
Employer Member: Ms Cryan
Worker Member: Ms Tanham
1. Revision of pay and certain arrangements in the Construction Industry.
2. The parties have been engaged in relation to the Construction Industry Federation's proposals to revise downwards the rate of pay in the sector, the introduction of a reduced starting rate and the rationalisation of working time, overtime, travelling time, starting time and country money. Progress was made on a number of issues, however, no agreement was reached on the proposal for a reduction in the rate of pay.
The dispute could not be resolved at local level and was the subject of aConciliation Conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 26th July, 2012, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 28th September, 2012.
3. 1. The Unions acknowledge the depth of the crisis facing the sector and are anxious to engage constructively in order to protect the jobs of those
remaining in employment.
2. The Unions argue that Construction Workers have already taken a five year pay freeze and a 7.5% pay cut and deservebetter, "rather than
another ill-thought out slash and burn attack on their dwindling
4.1.The employers argue that the changes are necessary to reduce employment costs in the sector, improve competitiveness, create more jobs, encourage domestic and foreign direct investment, support sustainable residential construction and support effective monitoring of compliance with the REA.
2. Low compliance levels with the REA is a particular difficulty facing the sector. The reductions in labour costs will enhance compliance with the REA.
3. Recovery in the sector will be accelerated if the correct steps are taken now by all parties to tackle the issues and in particular, labour costs.
The Court has carefully considered the submissions of both parties to this dispute.
The Court notes that the rates of pay of Workers in the construction industry have legal effect through the Registered Agreement and bind all Employers in the sector. The Court must conclude therefore that the industry tenders for work against those legally binding wage rates. Logically therefore the decline in the value of tenders in the industry is not related to the level of wages in the sector as they bind all Employers tendering for work including those based outside of this jurisdiction. The Court was also told that the State is effectively the only significant customer the industry has at present or will have for the foreseeable future. Moreover the Court was told that invitations to tender issued by state bodies require all affected parties to comply with the provisions of the Registered Agreement in both their pricing of work and in the execution of all construction projects. The Court has not been presented with any evidence that would support a conclusion that State bodies are demanding or accepting tender prices that are manifestly incompatible with the provisions of the Registered Agreement. Nor has the Court been presented with compelling evidence that state bodies are complicit in or indifferent to widespread non-compliance with the provisions of the Registered Agreement. Were this the case state bodies and public officials would in effect be encouraging unlawful behaviour to the detriment of compliant Employers and Workers and the Court is not prepared to make recommendations based on such a premise without a compelling body of evidence to that effect. Accordingly the Court must conclude that the fall in the value of tender prices that has occurred in recent years is not influenced by the cost of labour in the sector.
The CIF has sought a number of specific changes to the terms of the current agreement in place between the parties. The Court addresses each of the proposed changes in turn and makes the following Recommendations:-
The CIF sought a reduction in pay of the order of 20%. It submits it needs such a pay reduction in order to lower the industry's cost base and assist in the process of rebuilding the sector. The Unions submit that they have already agreed a 7.5% reduction in pay in the sector. It submits that any further reduction in pay is not justified and would have no effect on employment levels in the sector.
The Court notes that the CIF and a Trade Union in another part of the industry/sector have recently agreed a pay reduction of the order of 10%. It is common case that the circumstances of that part of the industry/sector are very similar to those in the wider construction industry. Accordingly the Court recommends that the 7.5% reduction in pay already agreed between the parties be increased to bring it into line with the adjustment agreed in the Electrical Contracting Industry.
New Entry Rate
The CIF seeks the introduction of a New Entry Rate in line with the National Minimum Wage and increasing by 5% per annum over a period of four years before moving to the Grade D. The Unions argued that the reduced rate would not have any effect on employment levels, would lead to wide spread displacement of existing Workers in the industry and impose an economic barrier to unemployed Workers in the sector finding employment when the economy begins to recover.
The Court sees merit in the positions advanced by both sides in relation to this matter. The Court notes that the CIF offered assurances to the trade unions that it did not intend to displace existing staff or create a barrier to re-employment for unemployed construction Workers. However no mechanism to protect against such eventualities was presented to the Court. On the other hand the commencement rate for new entrants to the industry is significantly in advance of the current National Minimum Wage and the industry might benefit from a modest and limited reduction in the rate of new entrants to the industry. In this context the Court recommends that a new entry rate of €12.00 per hour be introduced after a mechanism for ensuring that existing or unemployed construction Workers are not displaced or adversely affected. The new entrant rate should apply to Workers that have no prior experience in the industry. Such Workers should, after one year on the new rate, progress to Grade D and after a further year progress to Grade C in accordance with the provisions of the Registered Agreement.
The CIF has sought a significant restructuring of the travel allowance agreement in place in the industry. The Unions have indicated that they are prepared to engage with the CIF with a view to modernising the agreement though they are not prepared to meet the claim submitted by the CIF.
Having considered the submissions of both parties the Court notes that a related sector of the Industry has recently agreed extensive changes to the travel allowance agreement in place in that sector. The Court recommends that changes to like effect be implemented in the Construction Industry.
The Court notes that the Unions are prepared to concede the CIF proposal that travel allowance be paid where Workers have attended for a full day's work.
The CIF sought extensive changes to the overtime arrangements currently in place. The Unions argued that the CIF had failed to engage with them on this proposal in any meaningful way.
The Court finds that the changes sought by the CIF are out of line with normal practice in Irish industry and were not included in the recently agreed amendments to an Agreement in a related sector. Accordingly the Court does not recommend concession of this claim.
The Court notes that the parties are ad idem on this point and accordingly implementation of the CIF proposals that were conceded by the Unions some years ago.
The Court notes that there is an unacceptably high level of non-compliance with the provisions of the Registered Agreement and that this puts compliant Employers and Workers at a considerable competitive disadvantage. The Court notes that both parties are committed to developing processes to address this issue. The Court recommends that the parties meet to agree procedures and processes to address this issue.
The Court notes that the parties intend to incorporate these changes into the current industry agreement with a view to making an application to the Labour Court under the relevant Section of the Industrial Relations Act 2012 to have the Registered Agreement varied to reflect the terms of the final agreement reached between the parties.
The Court so recommends.
Signed on behalf of the Labour Court
19th November, 2012______________________
Enquiries concerning this Recommendation should be addressed to John Foley, Court Secretary.