Ceisteanna—Questions. Oral Answers. - Construction Industry Workers' Benefit. – Dáil Éireann (25th Dáil) – Thursday, 10 Mar 1988

Ceisteanna—Questions. Oral Answers. - Construction Industry Workers' Benefit.

Mr. Wyse

asked the Minister for Labour if his attention has been drawn to the situation whereby employees working in the building industry are having deductions for pension purposes made from their salaries and when they come to pension age, they find that many of their pension contributions have not been paid into the Construction Industry Federation Pension Fund and they are only entitled to small pensions; and in the cases of employers going into liquidation, these employees seem to have no course of redress and their paid contributions are wasted.

59.

Mrs. Hussey

asked the Minister for Labour if every firm in the construction sector must provide pension, death benefit assurance and sick pay benefit to all manual employees between the ages of 20 and 65 irrespective of the size of the firm, in addition to other payments such as PRSI, PAYE, VAT and income tax; and if the expense can be justified for a very small firm struggling to survive.

Mr. B. Ahern

I propose to take Questions Nos. 6 and 59 together.

An employment agreement relating to pensions assurance and sick pay in the construction industry has been registered by the Labour Court at the request of the Registered National Joint Industrial Council for the Construction Industry. The agreement provides for pension, mortality and sick pay benefits. The agreement applies to the categories of workers specified in the agreement who are employed by building or civil engineering firms as defined in the agreement. One of the main provisions of the agreement in question is that each worker affected must receive from his employer the benefits of a pension scheme and a sick pay scheme which are no less favourable than those set out in the agreement. Every employer in the construction industry is, therefore, obliged to provide these benefits either under the construction federation operatives pension scheme or under some other scheme. The effect of the registration of the agreement by the Labour Court is to make these arrangements legally enforceable.

However, the Labour Court can only act on the basis of complaint that the terms of the registered agreement have not been complied with. The Construction Industry Federation — which administers the construction federation operatives pension scheme — employs a team of inspectors to ensure that construction firms are complying with the agreement. Employees in the industry are advised by the trade unions and the pension scheme management to check regularly that their pension contribution deductions are being passed on. If an employee discovers at any time that his contributions have not been paid over and the employer is still in business it is possible to compel the employer to pay over any arrears of contributions.

The Protection of Employees (Employers' Insolvency) Act, 1984, protects both employers' and employees' outstanding contributions to an occupational pension scheme for a period up to a year prior to the date of insolvency of an employer. This applies to employer insolvencies occurring on or after 22 October, 1983. Therefore, in any instance where employers, who are covered by the construction federation operatives pension scheme, have become insolvent, the trustees of the scheme should apply to my Department for the payment of any outstanding contributions allowed under the Act.

Mr. Wyse

Would the Minister agree that it is very important that he, as Minister for Labour takes positive action against — the best term I can think of is — cowboy builders, who deduct pension contributions from their employees but do not pay those contributions into the construction federation operatives pension scheme, thus depriving such unfortunate employees, who will have given lifelong service to their employers, of pensions? Furthermore, is the Minister aware that such builders usually go into voluntary liquidation and, after a short period, go back into business continuing the same practice? What positive action can be taken to eliminate this type of practice?

Mr. B. Ahern

The employment agreement relating to pensions, insurance and sick pay in the construction industry is precisely what has been concluded and lodged with the Labour Court so as to overcome that difficulty. In so far as I have any say, the agreement will be enforced. There is a difficulty and it has to be highlighted that people have to police their own scheme. The construction industry have employed inspectors who will visit the firms to ensure they are complying with the agreement. They have computerised their entire register of about 100,000 members in their efforts to make this scheme work. It is a new scheme and there is an amount of information on it which I should be glad to give to the Deputy.

Mr. O'Sullivan

I welcome the agreement which the Minister has announced. What happens to builders who are outside the CIF scheme? How will they be policed? There is the danger if an employee goes to an employer and asks him for a record of contributions he will get short shrift and not be well received. The employee could put his future on the line and be asked very awkward questions by the employer as to whether or not he trusts him. I fully endorse the question put down by Deputy Wyse because I have met many people who have worked in the construction industry all their lives who, when they tried to draw their pensions, found that there were gaps in their contributions. One builder may pay in an employee's contribution but another may not. It is not always the big builder who keeps such contributions up to date. In some cases the small builder may do so. If there is a gap in the contributions a case will have to be made on compassionate grounds to the CIF in order to get a pension for the former employee.

Mr. B. Ahern

This is a very important issue. The CIF and the trade unions concerned are to be congratulated on their efforts in this scheme. I cannot claim any great role in it other than that the Labour Court will assist in the scheme. If an individual is not registered with the CIF he will not be in the scheme and, therefore, no deductions will be made for him. It still remains a problem for those people. The CIF have built a register of all their members and, in particular, of those companies who have been involved in difficulties in the past and the inspectors they have now employed will follow those companies to ensure they comply with the agreement.

Dáil Éireann debate -
Thursday, 10 Mar 1988