Sectoral Employment Order (Construction Sector) 2019

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

We will now proceed to consideration of Sectoral Employment Order (Construction Sector) 2019 in accordance with Dáil Standing Order 84A(4)(k) and Seanad Standing Order 71(3)(k). The Sectoral Employment Order (Construction Sector) 2019 was referred to this committee by order of the Dáil and Seanad on 14 May. The committee has been asked to send a message to both Houses not later than Thursday, 16 May stating that it has completed consideration of the order.

I welcome the Minister of State at the Department of Business, Enterprise and Innovation, Deputy Breen, and his officials to the meeting and I thank them for the briefing material provided. I invite the Minister of State to make his opening statement.

It is great to be back here again. I am here to discuss the sectoral order for the construction sector. I am pleased to present to the committee for its consideration the draft sectoral employment order for the construction sector. This draft order is being made under section 17 of the Industrial Relations (Amendment) Act 2015. The intention is that this order will confirm the rates of pay, pension and sick pay entitlements for defined workers in the construction sector. This is the second such order to be made. The first sectoral employment order for the construction sector was issued in 2017.

This current matter came before the Labour Court by way of an application by the Building and Allied Trades Union, Connect Trade Union, Operative Plasterers and Allied Trades Society of Ireland, SIPTU and Unite the Union pursuant to section 14 of Chapter 3 of Part 2 of the Industrial Relations (Amendment) Act 2015. The unions requested the court to examine the terms and conditions of workers of the class, type or group to which the request relates in the given sector. They submitted the sector is a defined economic sector for the purposes of the 2015 Act. Having examined the submissions and the accompanying supporting materials, the court was satisfied that the applicants are substantially representative of the workers of the particular class, group or type in the economic sector in respect of which the request is expressed to apply.

As per the Act, the court then, as it is required to do, published its intention to undertake an examination of the request of unions and employers and invited submissions from interested parties. Written submissions were received from five interested parties, namely, the Construction Industry Federation, the five applicant trade unions, the Construction Workers Pension Scheme, Ms Dolores Rodgers and the Small Firms Association. Three were in favour of making the order, one was neutral on the proposition and one contended that such an order should not be made. A public hearing was held on 22 March 2019. All interested parties were given an opportunity to be heard. Having considered the matter, the Labour Court reached a decision to make a recommendation. In making its recommendation the Labour Court has to consider the factors set out in section 16(2) of the Act. These include 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 the fact that the sectoral employment order would be binding on all workers and employers in the economic sector concerned.

In accordance with the Act, the recommendation was submitted to me as Minister of State for approval on 25 April 2019. I considered the recommendations in line with the terms of the 2015 Act relying on the statutory report outlining the Labour Court's deliberative process in reaching its recommendation. I notified the court on 9 May 2019 that I accepted its recommendations. A draft of the order was laid before the Houses on 9 May 2019 as required by section 17(4) of the 2015 Act.

I hope the committee will recognise the importance of ensuring stability in employment terms and conditions in this sector and will refer the matter back to both Houses for approval so that the order can be given legal effect. When the order comes into effect its terms will be binding across the sector and enforceable by the Workplace Relations Commission. The construction sector order will become effective not now but from 1 October 2019 and, as such, will revoke the existing sectoral employment order for that sector, which is SI No. 455 of 2017.

I thank the Minister of State. Are there any questions on the order? Senator Mac Lochlainn is next.

My party welcomes these proposals from the Labour Court. They will see the minimum wage rates for construction workers rise by 5.4% and for electrical contractors by 2.7%. Workers throughout the island in many different sectors are struggling to make ends meet due to the spiralling cost of housing and other costs such as childcare and insurance. It is vital that we support workers and fair wage rates are central to this support.

This approach of employers and unions working with the Labour Court for a fairer outcome is welcome. We support these two sectoral employment orders. I appreciate that business groups have expressed their concern that these rises could impact on the cost of doing business and construction costs. The Government must do more to help reduce business costs in other areas, such as insurance. We can have fairly paid workers and successful profitable businesses - these outcomes are not mutually exclusive. With this in mind, I encourage the Minister of State to revisit the current minimum wage system and put in place measures to move towards a living wage. The national minimum wage it too low, with the result that workers are living in poverty. We must ensure this is not the case and a living wage is essential to achieving this. I wanted to make those comments in line with what we are doing today.

I call Deputy Neville.

I would also like to welcome what is happening today, and make reference to the fact that the construction sector, particularly the apprentice construction sector, has recovered or is recovering. We are using this to try to attract more talent and more workers into the sector and the market is reflecting that. Much of this is a knock-on effect.

We need to balance salaries or wages against the business challenges out there as well. We do not want to kill the goose that lays the golden egg, so we must try to find that balance. I worked in a minimum wage job in a bar for a year, so I can see it from both sides. I also worked in commercial roles in businesses. It is about finding the balance that is best for everybody. I welcome the legislation coming through, and agree with some of what was said by my colleague. However, we must also be mindful of middle-income earners in this economy, and we need to start looking at creative ways of maximising take-home pay for people who work hard and should be rewarded for it. That is something I very much want to drive and something I very much believe in. The harder people work, the more money they should make and the more pay they should get, and the more disposable income they should have. That needs to be balanced with taxes as well and that is something we also need to look at going forward.

That is a very valid point from Deputy Neville. There is no doubt that work has to pay, and this will certainly help in that respect. We spent much time last year looking at the cost of doing business, so we have to be mindful of that and try to get the balance right.

I would like to thank Senator Mac Lochlainn and Deputy Neville for their contributions on this. First, the measures here are an important step in securing stability and growth in this very critical sector at the moment. They also protect working conditions, and above all else, as Deputy Neville said, they aid in the attractiveness of the sector as a career. We know there is a shortage of people in this sector at the moment, and we have to try to make it more attractive for people to go into this area. That is important.

The most important thing, however, about the sectoral employment orders, SEOs, is that the Labour Court is independent, and it makes its recommendations when it consults everybody concerned. SEOs have brought good, harmonious relations over the last couple of years, particularly in the construction sector where we had many ongoing strikes in the past. They have been proven to work. Many bodies would like to have an SEO to protect their workers, and a number of groups are trying to get enough members to ensure they can have an SEO, so they can be seen to represent the majority of the group for which they work.

Senator Mac Lochlainn mentioned a few areas in regard to insurance. I know they are outside of this, but just to touch on them, I think the measures we are putting in place in regard to insurance will pay off. It is not something that can be solved overnight. There is no silver bullet out there, but the measures we are putting into place as a Government in regard to the Personal Injuries Board, reviews, and the new compensation rates will all be important. We just need a bit more time on that.

The Low Pay Commission is an independent body that works separate from the Government, and that is the reason it was put in place. As Deputy Neville knows, the Low Pay Commission is made up of workers from the unions, business employers, and academics, and it does play a very important role. The living wage is voluntary. We do not get involved in it, and it is up to the Low Pay Commission to decide what the minimum wage should be each year. It engages in much consultation when it decides that, going around the country consulting people in regard to it. That is working well, and the fact our industrial relations are voluntary is another sign that harmony is important.

The 2015 Act has been an important one. This SEO was sought by the contractors concerned and the Labour Court made its independent judgment in this. I would like to point out to everyone here that my only role in this was to ensure that the 2015 Act was put into place and that the Labour Court did its job in accordance with the Act.

I again thank all the members, particularly Senator Mac Lochlainn, who I served with in a previous role in a committee. I thank him and Deputy Neville, who is a good attender at these meetings, for their input into today's meeting. I also thank the Chairman for her full co-operation.

I thank the Minster of State. It is important to state that the Labour Court is an independent body and that the Minister of State took the recommendations from the Labour Court on board after it carried out its deliberations. I was struck by the fact that there were only five written submissions and three were in agreement, so the consensus seems to be that most people were in agreement on this. That completes the committee's consideration of the Sectoral Employment Order (Construction Sector) 2019.