I am very pleased to present to the committee a draft sectoral employment order for the construction sector. The draft order proposes to amend the previous SEO made in 2023 by confirming new minimum rates of pay, pension and sick pay entitlements for workers in the construction sector. If approved, the order will be the fifth of its kind to be made since the first SEO for the construction sector was issued in 2017.
Before I detail the specifics of the order, I remind us all of our respective roles, including mine as Minister of State and that of committee members, as Members of the Houses of Oireachtas, in terms of the SEO process. An SEO is a statutory minimum wage-setting mechanism in a given economic sector. In essence, an SEO is a collective bargaining mechanism which, once the statutory threshold has been met, gives the Labour Court, as a neutral decision-maker, the power to examine an application for an SEO in a given economic sector. As part of this examination, the Labour Court must explore all the policy considerations set out in the Industrial Relations (Amendment) Act 2015 by affording all interested parties an opportunity to engage with the proposals and have an opportunity to be heard. Once the Labour Court has complied with the statutory process set out in the 2015 Act, it then has the power to make a recommendation for an SEO to me. This recommendation must be accompanied by a report setting out the process and matters the Labour Court considered in reaching its recommendation. The purpose of the report is to assist with satisfying the Minister that the Labour Court has complied with its statutory functions under the Act.
My role in this process, as Minister of State, is quite limited. Pursuant to the 2015 Act, I have the power to either accept or reject the recommendations presented. I am compelled to accept the recommendations if I agree, based on the statutory report the Labour Court has prepared, that the court has complied with the statutory process. If I, as Minister of State, am not satisfied that the Labour Court has complied with its duties as set out in the Act, I would have to return the proposal to the court setting out the reasons for not accepting the recommendation. To be clear, I do not have any power to engage with the substantive recommendation itself. I receive the recommendation and either approve or reject it.
I confirm to the committee that I have considered this draft recommendation in line with the terms of the 2015 Act, relying on the statutory report outlining the Labour Court's deliberative process. Having done so, I am satisfied that the Labour Court has complied with its statutory role. Accordingly, my Department has notified the Labour Court that I accepted the recommendation and would be referring the matter to the Houses of the Oireachtas, as required by the Act, for their consideration. Furthermore, as required, a draft order was laid before the Houses. The 2015 Act also sets out that the Houses of the Oireachtas may only accept or reject the draft order as it is. The Act does not permit any alterations or amendments from the committee to the draft order. If the Houses accept the recommendation, I will then sign a statutory instrument to give it effect. I am keen to do so before the dissolution of the Dáil. Should the Houses reject or fail to approve the draft order, the proposal for the SEO would then fall.
I turn now to the proposal itself. The application for an examination came before the Labour Court by way of application by the Building and Allied Trades Union, Connect Trade Union, Operative Plasterers and Allied Trades Society of Ireland, OPATSI, SIPTU and Unite the Union. They did so pursuant to section 14 of Chapter 3 of Part 2 of the Industrial Relations (Amendment) Act 2015.
The five unions requested that the Labour Court examine the terms and conditions relating to the remuneration and any sick pay scheme or pension scheme, of all persons employed in the construction sector as craftspeople, construction operatives, and apprentices. Having examined the submissions and the accompanying supporting material, the Labour Court reports that it was satisfied that the applicants were substantially representative of the workers of the particular class, type or group in the economic sector in respect of which the request is expressed to apply. This gave the court the jurisdiction to proceed with the examination.
The court then, as it is required to do, published its intention to undertake an examination of the unions’ request and invited submissions from interested persons. Written submissions were received from three interested parties. They were the construction industry committee of ICTU, the Construction Industry Federation and Connect Trade Union. No parties objected to the making of an SEO. These submissions will be made available for anyone to examine on the Labour Court’s website.
A public hearing was then held on 6 August of this year and again on 9 September. All interested parties were given an opportunity to be heard and to engage with the various policy considerations that the process requires. Having considered the matter fully within the statutory time limits, the Labour Court then made its recommendation to me. According to its report, the court has considered the factors set out in section 16(2) of the Act. This includes the potential impact of the making of an order on levels of employment and unemployment in the identified economic sector, the potential impact on competitiveness in the economic sector concerned and that the SEO would be binding on all workers and employers in the economic sector concerned. I understand that the Labour Court’s report has been shared with members of the committee, so I hope they have had the opportunity to examine it themselves in greater detail. I confirm that it will be made available on my Department’s website.
I hope the committee will recognise the importance of ensuring industrial relations stability in the construction sector and will accept the order in its draft form. I trust that the committee recognises that Ireland needs a competitive, productive and sustainable construction sector for the delivery of high-quality and affordable residential and commercial properties alongside its national physical infrastructure. I believe this SEO plays a really significant role in supporting this sector through the maintenance of harmonious industrial relations. The terms of the SEO refer merely to the minimum rates of pay and terms and conditions, so it is a floor. At times when the sector is buoyant, it is expected that most employers will exceed these minimum rates. The real importance of the SEO is to ensure that in times of economic downturns, workers are properly protected and the sector maintains its attractiveness as a profession for apprentices in particular.
It has been a long-standing practice of trade unions and the employers in the construction sector to enter into collective agreements that govern the terms and conditions of employment. These arrangements have been in place for many decades and have provided the industry with cost certainty and stability. The original SEO provides for a dispute resolution mechanism, which does help when it comes to preventing industrial unrest.
Should this order be approved by the members, I will sign an order giving it legal effect. Its terms will be binding across the entire economic sector. The new order will become effective on 1 August 2025. It will remain in place for two years and includes a second minimum remuneration increase in August 2026. I will hand over to members.
