I welcome the Minister of State, Deputy Brian Hayes, back to the House. This is a Seanad Bill which has been amended by the Dáil. In accordance with Standing Order 118, it is deemed to have passed its First, Second and Third Stages in the Seanad and is placed on the Order Paper for Report Stage. On the question "That the Bill be received for final consideration", the Minister of State may explain the purpose of the amendments made by the Dáil. This is looked upon as the report of the Dáil amendments to the Seanad. For Senators' convenience, I have arranged for the printing and circulation of the amendments. The Minister of State will deal with the subject matter of the amendments in each group. I have also circulated the proposed grouping to the House. A Senator may contribute once on each grouping. I remind Senators that the only matter that may be discussed is the amendments made by the Dáil.
Construction Contracts Bill 2010: [Seanad Bill amended by the Dáil] Report and Final Stages
I wish to address the first grouping, comprising amendments Nos. 1 and 2. Amendment No. 1 provides for the exclusion of mining and drilling operations from the scope of the Bill. Section 1(1)(g) included mining and exploration as construction activities. These activities should not have been included, as similar activities are specifically excluded from the definition of "construction activities" under EU Directive 2004/18/EC, which relates to procurement procedures for the award of public works contracts. It was not the intention to include such activities, as it is our understanding that there is no evidence of payment disputes in this specific area of construction. Given the potential of such sectors, a further regulatory impact analysis would need to occur before a decision could be taken.
Amendment No. 2 allocates the responsibility for policy and administration of legislation to the Minister for Public Expenditure and Reform. This is a standard provision.
We are back to having good relations.
I thank the Senator.
The Minister of State mentioned that further analysis was necessary. We have had three years. How much longer does he want? For God's sake, we are moving at a snail's pace. This has been the most agonising progress for a Bill. Claiming that more analysis is necessary is not a legitimate argument. Tomorrow, we will debate a Bill that has been dithered about for the past four years. Everyone agrees with it, but it will only go through because this side is pushing it. Let us accelerate.
The Seanad does its work. We send Bills down to the Dáil. I compliment Senator Quinn.
Hear, hear.
This is brilliant legislation. Had it been passed in 2010, a number of people would not be out of jobs and some small subcontractors would not have gone out of business. I am not being unpleasant because of our previous ding-dongs, but I no longer accept that the Dáil should be allowed to dither for three or four years while people's livelihoods are at stake. Although there may be technical reasons, they should have been worked out by the Government by now.
I welcome the Senator's intervention. He is right in that this is Senator Quinn's Bill, not my Bill. We would not be here were it not for him.
Hear, hear.
I wanted to put that on the record, as I have done every time we have discussed the Bill in the past two years.
The Minister of State has been gracious.
The Seanad sent the Bill to the previous Dáil. As Senator Quinn would agree, this is a radically different Bill from the original. I agree with Senator Norris that it has taken too long. One reason for its taking more time than expected was that this was the first legislation in respect of which a regulatory impact assessment, RIA, was conducted. All of the partners in the industry were involved in trying to tease out the problems with the Bill, which we managed to do in the course of the deliberations in the Lower House. The length of time taken was not for lack of trying on my part.
This important amendment is concerned with certainty about payment for the small guy, as it were. Mining and exploration do not fall within that definition, for which reason we have excluded them. I would have hoped to be in a position to return the Bill before now. I am sorry it was not done in that way.
The second grouping relates to amendments Nos. 3 to 6, inclusive. The main element relates to issues raised in the context of the consultation process that formed a part of the Bill's RIA. The RIA examined the experience of adjudication in other jurisdictions and found that, in the majority of disputes that used such processes, contracts were valued at between €13,000 and €65,000.
Therefore, the RIAI concluded that these thresholds were too high and should be reviewed or removed. The amendments included on Committee Stage in the Dáil removed the current thresholds from €200,000 for private contracts and €50,000 for public contracts and replaced them with a single threshold of €10,000. That issue came from the regulatory impact assessment, and Senator Quinn was supportive of what we had to do in bringing back those thresholds to the minimum €10,000 level.
In this regard, I note there has been some confusion about to what the threshold applies. The new threshold of €10,000 relates to the overall contract value, and therefore subcontractors will be free to refer payment disputes relating to lesser amounts to adjudication. For example, if a contract with an overall value of €11,000 gives rise to a payment dispute for €1,000, this will come within the scope of the legislation. The reason thresholds were included in the Bill was to avoid placing undue administrative burden arising from financial security provisions in an earlier form of the Bill. As there is evidence that obtaining such financial instruments would be prohibitively costly for the sector, these security provisions were removed from the Bill in the Seanad. The removal of the financial security provisions made it possible to reduce the monetary thresholds. It is important to note the threshold relates to the size of the overall contract; therefore, subcontractors will be free to refer payment disputes relating to lesser amounts to adjudication.
Amendment No. 3 is a technical amendment as a consequence of amendments Nos. 4 and 5, which relate to the removal of the two different thresholds that apply to State contracting or private entities. Since the new threshold of €10,000 now applies equally to public and private entities, the definition of a State contracting entity under section 1 is no longer necessary and, as such, has been removed.
I thank the Minister of State. With regard to payments under contracts, payments claims notices and who is entitled to claim, what is included in the Bill? In the previous section of the Bill there is reference to the exclusion of materials, plant and machinery, but in this section it is indicated that construction contracts shall provide for what is not included in the other section. I know of a subcontractor who had all his plant and machinery stolen and taken to Dubai under a construction contract. He is a very good subcontractor and worked here on the M50. The machinery was taken to Dubai by the main contractor and the subcontractor did not realise this was happening. When he got out to Dubai to do the work, he found out he did not own the machinery, and €1.5 million of his plant and machinery had been taken from Ireland to Dubai. Does this Bill include something that would help that subcontractor? It happened a couple of years ago so the action would have to be retrospective.
What happens if the contractor applies for a State contract, as dealt with by other sections of the Bill? Anybody who acts in such a way to a subcontractor should never again be employed on a State contract. There is such a provision in the planning Acts.
The Bill does not involve retrospective activity and it cannot do so under the Constitution. We are only responsible for legislation enacted from this day forth. Needless to say, the issue referred to by the Senator is straightforward theft, and if somebody has taken plant and machinery from a contractor or subcontractor, the appropriate sanction would have to be brought through the Garda or other international agencies.
The Senator raises a very important issue, with which the Government is grappling, of how we can ensure that those who win contracts are effectively people who have a good standing within the construction industry and comply with employment and other health and safety legislation that is in place. It is a very important point. The Government is currently working on a proposal to introduce what is called a statutory register, whereby construction contractors who are fully compliant in all legislation that goes through these Houses would be put on a register, and it would be a matter for public authorities to utilise those. We do not have recourse to that at the moment, which is a major problem. One of the more recent analyses of the National Employment Rights Authority, NERA, which considers these issues, has shown a significant problem of non-compliance in the construction industry. That is not only non-compliance in terms of legislation, and this Bill will deal with the real problem of payment.
Considering the construction industry as a whole, there are not enough contracts in place, and we hope that as a result of Senator Quinn's Bill there will be a standard upon which the industry can go forward. As part of the new armoury we are obtaining under the Bill, we must also have a regulatory statutory instrument to ensure that cowboys will be clearly and demonstrably outside the loop. Those who comply with the legislation should be clear for all to see.
On a point of order, there may be some confusion or misprint in these amendments. Amendment No. 5 states "In page 5, subsection (1)(b), line 36, "the value of the contract is more than €200,000, and" deleted." Have these amendments already been made?
Yes. The figure was €200,000, and it has been taken out.
I understand.
It was a good try. The third group includes amendment No. 7.
This amendment essentially removes the words "an act of a person other than one of the parties to the construction contract" and replaces them with "the making of a payment by a person who is not a party to the construction contract". Section 3(5) excludes the practice of "pay when paid" clauses in construction contracts; this is a key provision of the legislation. There is a concern that the wording of section 3(5) in the Bill passed by the Seanad, particularly the phrase "an act of", may give rise to a challenge to the practice of certification of payment, which is a key provision in many contracts between a building commissioner and a main contractor and is provided for in section 3(1). Typically, payments under a construction contract between the project commissioner and the main contractor are conditional upon a certificate of payment being issued by the named certifier under the contract. If section 3(5) is not amended, it may give rise to a challenge to any payment where the payment application made by the contractor was reduced by the certifier in line with the terms of the contract. This amendment brings clarity to the practice of certification of payments under a construction contract without diminishing the key intent of section 5(5), which is to outlaw the inclusion of "pay when paid" clauses in construction contracts.
This sounds suspiciously similar to mining contracts, and I am very disturbed that the Minister of State has indicated that mining has been excluded from this. I presume exploration has been excluded as well. The Minister is nodding. I am concerned because we may be giving away much of our resources without due regard and protection for local people. The very big contractors such as Shell and BP are well able to shaft people lower down while they take our oil, which is being given free, gratis and for nothing. I am very sorry that mining has been excluded. Is there a reason for that?
When the Bill was first devised by Senator Quinn, he did much work on international comparisons. This is a straightforward piece of legislation, as Senator Quinn rightfully stated, which will help the small guy in particular and bring some order to the industry after the considerable disorder we have seen in the past.
It is not intended to deal with large plcs, even though it does. In the area of construction, we are typically referring to residential and commercial construction, not mining exploration. The Bill’s objective was to streamline matters similarly to the UK, which also excludes mining exploration. There is nothing untoward in its exclusion from this Bill. Mining simply is not within its ambit. I apologise, as I am not expert enough to discuss the larger issue of Shell.
That is fine. I am happy to leave it at that, but I will pursue the business of mining.
The fourth grouping relates to provisions in the Seanad Bill that, by requiring the unpaid subcontractor to return to work after two weeks even though he or she might not be in receipt of payment for work carried out, favoured the main contractor. Everyone accepted this as fact. The provisions were amended to provide for suspension of work following seven days' notification in writing. This suspension can continue until referral of the payment dispute for adjudication, and following an adjudicator’s award where the award has not been paid. The amendment provides for a more balanced solution that, while not prejudging the outcome of a payment dispute, allows this issue to be resolved.
There is universal agreement that what we have done in this context has dealt with one of the key issues raised by subcontractors in the course of the regulatory impact assessment - that is, allowing people to return to work while the dispute is being resolved. This was not the case in the original draft and is a significant improvement.
The fifth grouping comprises amendments Nos. 9 to 11, inclusive. These are technical amendments to remove the provision in section 6(2) that is already provided for in section 2(5)(b), which reads:
This Act applies to a construction contract whether or not-- [...]
(b) the parties to the construction contract purport to limit or exclude its application.
This was mistakenly repeated in section 6(5).
Regarding amendments Nos. 10 and 11, at the start of Second Stage in the Dáil, I mentioned the helpful contributions of both main Opposition spokespersons, those from Sinn Féin and Fianna Fáil, in respect of the RIA. This was the first legislation on which a RIA was conducted. I invited to those discussions both main Opposition spokespersons. They were around the table with me and we listened to the industry’s opinions. I have attempted to take as broad an approach as possible.
This consultation highlighted a number of matters relating to the Bill that required further consideration, chief among those being the provision that limited the effectiveness of the adjudication process by making the adjudicator’s award binding, provided the award was not appealed. This measure was included to provide protection to the State in the event of insolvency of the payee.
During Second Stage, a number of Deputies asked to have the adjudicator’s award made binding - that is, payable even if the award was appealed to arbitration. I accepted these concerns. The amendment before the Seanad is the response to those issues. It means that adjudication will be binding and will apply equally to private and State contracts.
The adjudication provisions contained in the Bill are vital to its proper functioning. In a sense, they give the legislation the necessary teeth to provide a swift and cost-effective means of dispute resolution.
Amendment No. 11 is required to remove section 7(3), which states that work may not be suspended if the adjudicator’s award is not binding. Since the non-binding aspect of the adjudicator’s award has been removed in amendment No. 10, this subjection is no longer necessary.
I thank the Minister of State and I understand his comment about retrospective application. Perhaps my query will be too detailed for him, but I want to find out if a certain scenario is included. What happens if a contract has not been signed and a dispute is ongoing? What happens if the dispute is about a payment, the theft of machinery or whatever, but a contract was not signed before the Bill was enacted? It is a word of mouth contract so it is one person's word against another. Can the wronged person - in this instance, the subcontractor - refer the matter to the adjudicator? Can he or she do so particularly when payments have not been made to the bank for two years? Is there any way the subcontractor can approach the adjudicator or persons in this instance? I am one of many Senators but I know of two cases. I am sure many other Senators know subcontractors who have been diddled, fiddled or whatever one likes to call it in various ways, and the disputes are ongoing. This has happened.
Without knowing the details of the case, it depends. Can it be proved that both parties had a contract? Can it be proved that there was a verbal contract even though there is no written contract? Was there a legitimate expectation that an action would follow the agreement by the parties? I would be loath to say that it would automatically fall under it even though there is no written contract. There is some form of agreement, and I suppose it would be a matter for the courts to reach a view on its nature. Obviously the agreement is some years old.
The Bill's objective, thanks to Senator Quinn, is to avoid the legal route by having a legally binding adjudicating system under which parties will, instead of going to the High Court, follow what is effectively a non-judicial route in which a third party is asked to examine the case and produce a fair resolution.
As I just said, amendment No. 10 makes the process binding. That is a good thing because it will encourage more cases to go down the less costly and more efficient arbitration route and will encourage people to pay as they go. That is the nature of the provision's construction.
I have not seen the case mentioned by the Senator, so I do not want to be definitive. It seems to me that there is some form of agreement and establishing its form would probably be a matter for the courts.
Can I comment again?
No, Senator.
That is okay.
Amendment No. 12 is a technical amendment to provide for a standard definition of days based on that included in the Organisation of Working Time Act 1997. The term “day(s)” is used throughout the legislation and it was important that this aspect did not generate any confusion in relation to the application of legislation. This dates back to a difficulty in planning cases, as I can recall, whereby if a party makes a planning application on 23 December, even though the officials are not in their office for the next two weeks those days are regarded as days under the planning application system. The amendment will bring clarity to what counts as a day and improve the matter with a definition. There was a general acceptance of its need at the time.
Amendment No. 13 is a technical amendment that allows expenses incurred by the Minister to be paid out of moneys provided by the Oireachtas. This is a standard provision.
Question proposed: "That the Bill do now pass."
I thank the Minister of State for his explanation. I did not speak during tonight's debate as it is 1,168 days since the Bill commenced and, as we have spoken a lot about abolition or reform of the Seanad today, I felt that we should not speak any longer on the Bill than needed.
I wish to touch on some of the points that the Minister of State made. He said that the Bill came about due to a small incident. It was not a small incident but quite a substantial scandal whereby somebody who was not short of money had a company that did not pay its subcontractors. This came to the attention of Seán Gallagher, who wrote to a number of people, including his local Deputy, who circulated his letter.
What struck me when I saw the letter was that it did not seem right that somebody who is clearly not short of money was worried about getting a sub-contractor to build his own home. It was because he had let so many of them down. What I then did was run with it. I had the help of Ms Anne Ó Broin, my executive assistant for 27 years, who grasped the issue and explored ways of finding a solution. The British had introduced legislation in 1998, 15 years ago, and we were put in touch with Professor Rudi Klein, the expert who was actively involved in it. He had already spoken with the Construction Industry Federation, CIF, on a number of occasions and he came over and gave us advice. Part of the advice he gave us was that the Bill enacted in Britain had had to be adjusted and some improvements had been made, particularly with regard to certain states of Australia, New Zealand and the Isle of Man. He put us in touch with the relevant people, who were very helpful to us. I always though the grocery business was fairly tough and rough, but what I have learned is that nothing compares to how tough the construction industry is. There was great sympathy around the world for the fact that we did not have legislation, and we were offered support immediately. I contacted the then Minister, the late Brian Lenihan, who demonstrated the same enthusiasm as the Minister of State, Deputy Brian Hayes, who has taken hold of it to make it work. He left it in my hands to bring it through the Seanad. The commitment of the late Brian Lenihan was such that, following the general election in which he was the only Fianna Fáil Member who was re-elected in Dublin, and with a brief 12 hours before the election of the Taoiseach, he helped the Bill get through this House. He was committed to this Bill.
The objective was to have sensible law which would be easy to understand. Senators Norris and Keane expressed concerns that the Bill does not cover everything. The concept, after 1,168 days, was to make it as simple as we could. The Bill became quite involved because we tried to achieve too much in it. We have had some very good debates and different viewpoints have been expressed. Not everything we set out to do has been achieved, including, in particular, ways of dealing with bespoke items - in other words, a thing that has been made especially for a particular job. We would have liked to be able to include provision for bespoke items but we were not able to. As the Minister of State explained, there were other aspects that could not be handled on this basis. Under the law, if I sell a car to a person who does not pay me, I can go and collect the car from him, but if the customer does not pay for tiling or plumbing, those things are embedded in the building and the contractor cannot take them out. We understood that this would make it difficult to deal with it in legislation.
What impressed me no end was the commitment from the Government to deal with the Bill. The Minister of State, Deputy Brian Hayes, grasped the Bill and decided to run with it. I commend the officials who dealt with the Bill, some of whom are not here now, including Nicholas O'Loughlin, who put his heart and soul into it, as did Deirdre Hanlon and Ronan O'Reilly, who is not present. One of the officials who is sitting behind the Minister is David O'Brien, who was very helpful and committed to making the legislation work. I am sure Anne Ó Broin must have given them nightmares on occasion when she phoned them to find out what was happening.
I was able to pick up the phone to Arthur Cox at the beginning and was greatly helped by Patrick McGovern, Niav O'Higgins and Niamh Burke, who put their hearts and souls into getting the Bill off the ground at first. In the Bills Office, Noreen Banim put her heart and soul into the effort as well.
Nothing would have happened if Seán Gallagher had not contacted his local Deputy, who got in touch with me. People also contacted me when they heard the Bill was being published and offered their help. Tom Parlon, the former Minister, and Don O'Sullivan, who are in the Visitors' Gallery, put great effort into the legislation. Everybody involved in the industry put so much effort into it, including Engineers Ireland, the Royal Institute of the Architects of Ireland, the Society of Chartered Surveyors Ireland, the Chartered Institute of Arbitrators, the Irish Concrete Federation - even though it did not get everything it would have liked out of it, particularly in respect of bespoke goods - and Hardware Association Ireland. What has resulted is a Bill we are all pleased with. People from right round the country have contacted me asking me to include certain provisions. The Minister and his team were very responsive to the suggestions and people were understanding when we could not include them. The Minister of State explained very well the issues of "pay when paid" clauses, bespoke items and the limits involved.
Will the Minister consider the possibility of a commitment from the Government to review the operation of the Act in two years time? It might be possible to do something on that basis. We believe the Bill is as good as we can get, but we could look again in time at dealing with disputes. The number of disputes going to court in Britain has been reduced significantly from approximately 2,500 to some 5% of the total. We have the door open and if a person is unhappy with the legislation he or she can go to court afterwards, but it takes time. The subcontractor will have been paid on that basis.
I believe this House has proved its value here tonight.
Hear, hear.
The House gives an opportunity to Independent Members to introduce legislation on their own. The Government is prepared to accept good legislation and to help those proposing it to forge really good legislation that will help the community. I believe, as Senator Norris has already stated, that if we had been able to get this Bill enacted ten years ago, a number of jobs would have been saved, many people would still be working and many companies would still be in business.
I thank everybody who has been involved, particularly those who have come along tonight to see the passage of the legislation, which makes history. It will make the construction industry even healthier than it has been in the past.
Ten Senators have indicated that they wish to speak. Usually only the group leaders speak. I ask Senators to be brief.
I commend Senator Quinn on his perseverance. I absolutely endorse everything he said in regard to the worth of the Upper House. My colleague Deputy Dara Calleary was asking about the passage of the Bill. Many Members of both Houses have been involved in the Bill. On behalf of the Fianna Fáil group, l commend Senator Quinn on the passage of the Bill, which will ensure that many jobs are saved.
I apologise to Senator Quinn for giving him a nudge to say something, but it was perfectly obvious - I have clarified this with him - that he had quite-----
There is no need for Senator Norris to nudge himself.
I do not need to nudge myself at all. I am always happy to speak. I have to say I thought it would be an impertinence to speak before Senator Quinn, or in his absence. I think it is important that he is able to take his bow at the end. I would like to record my personal jealousy because nobody has ever approached me with a Bill, unfortunately. I say to anybody out there who has a Bill to spare "I am your man, please think of me as well". This is a really good day - this part of it, at least - because we are seeing some positive collaboration between the Seanad and the Government. I want to congratulate Senator Quinn and everyone else involved, particularly Anne Ó Broin whom I know very well because our secretarial and administrative offices are very close to each other. I know how hard she has worked. We would not have this Bill without Senator Quinn. It is a very good day. This is not the only Bill that has come through this House. I think we should be proud of what has happened here today. I congratulate Senator Quinn.
I commend Senator Quinn. When he initiated this legislation, I wondered why this could not be done in six months because it was such a simple Bill and he explained it so simply at the time. We are where we are. The Senator is to be commended on introducing this Bill. The Minister has to be commended for running with it and bringing it to fruition today. I know the Irish Concrete Federation is not delighted with it, ach b'fhéidir go mbeidh lá eile acu, le cúnamh Dé. I commend Senator Quinn - I almost referred to him as the Minister - on his good work.
He could be appointed as the Minister for the Seanad.
If ministerial posts were given out for effort, Senator Quinn would certainly get one on the basis of the work he has put into this legislation. I commend and thank him for his achievement in this regard. This is one of the biggest issues I have encountered in my home town of Carrick-on Suir and across my constituency of South Tipperary since I became a Member of this House. I could do nothing about it because there was no legislation to deal with it. The only grain of hope I was able to give people was to tell them that Senator Quinn was trying to bring a Bill through the Oireachtas and to make it law. I respect what Senator Quinn has said about the passage of this legislation coming too late for some people. Small operators such as subcontractors will be able to sleep a little easier in their beds knowing that this legislation will give them some protection in the future. I commend and congratulate the Senator.
I would like to join Senators in heaping plaudits on Senator Quinn. He has shown us a fine example of how the Seanad can work. He mentioned that 1,168 days have passed since he introduced this Bill. We certainly hope the subcontractors will be paid much more quickly as a result of this legislation. Many of them may have been waiting for the length of time he mentioned. I congratulate Senator Quinn on bringing the Bill to this House and pursuing it through the Dáil. I thank him for that on behalf of the Independent group.
I commend Senator Quinn, who has put a great effort into bringing this Bill to fruition. He has done a great service to the construction industry. I congratulate him on his perseverance. It is regrettable that it took so long to get to this stage, but we are where we are. I suppose we should be positive now that we have reached this stage. As a litigator, I welcome the Bill, especially in light of the remarks that were made about the number of cases in this area. I am probably running the risk of talking myself out of two jobs-----
The Senator did a good job on the first one.
-----when I say that the first thing litigation solicitors, especially on the defence side-----
There is always Europe.
-----generally do is advise that it be avoided at all costs because it is such a costly effort. Our neighbours in the UK have taken the lead on the adjudication process. Lawyers in this country are going to have to embrace this sensible and practical process, along with mediation and other very useful tools that have become fundamental parts of the wider litigation and legal system. I welcome Mr. Tom Parlon and the other representatives of the Construction Industry Federation who are present for this debate. I think they see this legislation as fundamental.
If Senators continue to speak at such length, there is a danger that the debate will have to be guillotined.
I would hate to see that happen. I beg the indulgence of the Chair for another minute. I would have made my point by now.
Probably not.
Those who are in attendance see this Bill as fundamental if they are to achieve their ambition of doubling the size of the industry in the next few years. This Bill is good because it will ensure small contractors and subcontractors receive payments promptly. It will benefit all contractors in the construction industry by providing for a fair playing field. I reiterate that huge congratulations must go to Senator Quinn and also to Anne Ó Broin who has been of great assistance to the Senator.
I will be very brief. I could not let the day go without congratulating Senator Quinn on this Bill. I commend the Minister for Finance on accepting the Bill. In that context, I should also mention the previous Minister, Brian Lenihan - may the Lord have mercy on him - under whose stewardship this process was initiated. It is a good day for the Seanad. We may have gone out with a bang with the last Bill we passed, but this Bill shows what this House can really do. Many members of the press were in the Gallery for the last episode, but none of them is here when we are seeing the fruits of the actual work of this House.
It is too positive for them.
Senator Quinn gave another demonstration of what we can do two weeks ago when he introduced the defibrillator Bill. Many Bills are initiated in the Seanad. It is a poor day when our actual work is not reported. The media is interested in drama. I congratulate Senator Quinn. On the day that is in it, we are going out on a high.
I welcome the passing of this legislation. I thank the Minister of State for his contribution to its passing. Senator Quinn has done the State some service, to quote a former politician.
That quote is from a murderer.
If our economy is ever to recover-----
Othello.
-----we need to see a significant level of activity in the construction sector. We need that sector to be credible and to operate ethically. I think the legislation we are passing will ensure that subcontractors, who were very badly treated in the past, will not suffer the same fate in the future. I know many subcontractors in east Galway who will never recovered from the financial hardship that has been imposed on them by unscrupulous people who failed to pay them when they delivered the goods. I congratulate Senator Quinn and thank him for his perseverance in ensuring this legislation has been successfully brought through the House. I think he has made a real contribution to the Oireachtas and to the Seanad. I hope the passing of this legislation will help us in the months ahead as we battle to ensure Seanad Éireann is retained.
Hear, hear.
It was amazing to hear Senator Quinn say that 1,168 days - perhaps we are close to 1,169 by now - have passed since this Bill was introduced. Seán Gallagher brought these issues to my attention when I was serving as a local councillor on Louth County Council. He was very concerned. As has been said, Senator Quinn was the only person up here who took on Mr. Gallagher's idea.
This Bill delivers on a commitment in the programme for Government to introduce new legislation to protect all small building contractors who have been denied payments from bigger companies. As Senator Landy has said, it will give great comfort to small contractors. I hope they will receive the payments they have been due for a long time. The failure to make payments has a domino effect on contractors and subcontractors, but it is the small contractor who is the first to be left out. We all have experience of small contracts in our respective areas. It is unfortunate that small contractors have gone out of business because they have not been paid.
Local authorities do not pay contractors quickly enough and I am aware of contractors who are awaiting payment. While the Office of Public Works has improved in this regard, it still waits until the last minute to make payments. Money must circulate in the economy. Small contractors are waiting for much too long and I hope the legislation will ensure they are paid much sooner.
I congratulate my colleague, Senator Feargal Quinn, on his Bill, which is an example of what can be achieved in this House provided one is patient. This was one of the first Bills introduced in the new Seanad which I joined two years ago. It is great that this worthwhile legislation has reached this stage. I also congratulate the Minister of State and everyone else concerned.
This Bill has been a while coming. The Minister of State was also present when I spoke previously on issues addressed in the legislation. I refer to a case that came to light in my parish of Kilfinane involving contractors who were not paid for work done on a school. This was the second time the contractor in question had been left high and dry by unscrupulous individuals. Ugly scenes occurred as a result and when I discussed the matter with the Minister of State in the Chamber, he gave a commitment that they would not be repeated. He also stated he would ensure this legislation was brought before the House at the earliest possible date.
I wholeheartedly congratulate Senator Quinn who has given some solace and protection to people who had no recourse and nowhere to turn to and were forced in some cases to take the law into their own hands. This Bill is a victory for the House and the Senator in particular and shows the Seanad remains relevant. I hope we will be able to enact further legislation before we are all put to bed.
To respond to Senator Quinn, we will review the legislation. I gave a commitment to do so on Committee Stage in the other House, although I did not have the commitment written into the Bill. We will introduce a statutory instrument to allow the adjudicators to be appointed and the system established. This will be the bread and butter of the legislation and will ensure it works in practice.
This is historic legislation as it is the first private Bill to span two terms of the Oireachtas. This proves that while Governments come and go, Senator Quinn is still here. I hope those words will not be used against me in the weeks ahead.
I guarantee they will be.
The completion of the Bill is a significant achievement on which I congratulate the Senator. I thank especially Ms Anne Ó Broin who works with Senator Quinn and Mr. David O'Brien and Mr. Ronan O'Reilly from the Department. Senator Quinn, in referring to the late Deputy Brian Lenihan from the Dublin West constituency, reminds us that this Bill was first introduced when Mr. Lenihan was Minister for Finance. It was the late Minister who agreed to the legislation. Things move on and it is only right that Senator Quinn should recognise the late Mr. Lenihan's contribution during the term of the previous Government in accepting the legislation.
We must recognise that the construction industry is a fundamental part of national recovery. The sector must be sustainable but is currently unsustainable in that it accounts for less than 4% of gross domestic product when it should account for 10% or 11% of GDP. I accept it was not sustainable when it accounted for 20% of GDP.
The Government hopes that this key legislation, which is being enacted on the initiative of Senator Quinn, will set a new standard that is based on fairness across the construction industry. It will introduce rules, contracts and regulations that will help the sector grow and prosper. We need a prosperous construction industry and I hope the actions we take, with Senator Quinn and others in the House, will help it get back on its feet again. Construction must be a key driver of economic growth.