Dáil Éireann Debate, Tuesday - 24 July 2018
544. Deputy Sean Fleming asked the Minister for Education and Skills the discussions he has had with the Minister for Public Expenditure and Reform regarding putting arrangements in place to ensure that persons that carry out work on school building projects are paid for their work as sub-contractors in cases in which the main sub-contractor encounters financial difficulties; and if he will make a statement on the matter. [33701/18]
Amharc ar fhreagraThe Construction Contracts Act was developed in consultation with industry to address poor payment practices in the construction sector. The Bill was introduced to Seanad Éireann in 2010 and received cross-party support in both Houses. It was enacted in 2013. The Act applies to all construction contracts entered into after 25 July 2016.
The Construction Contracts Act imposes minimum terms on all construction contracts, whether written or oral, and provides the tools necessary to enforce payment. The tools include a maximum payment interval of 30 days and a requirement to honour payment requests within 30 days for subcontractors, a right of suspension for non-payment, and a right to refer a payment dispute to adjudication.
Like other major construction projects, school building projects involve a complex arrangement of contractual relationships between the client, the main contractor and various sub-contractors and suppliers. In general, all sub-contractors and suppliers engaged on education sector building projects are employed directly by the main contractor, or indirectly by the main contractor through other sub-contractors.
The Department of Education and Skills is not party to these contractual arrangements and does not have any role or authority in relation to payment or other contractual issues arising. However, sub-contractors on school building projects may exercise the remedies available to them under the Construction Contracts Act in order to secure their payment entitlements.
While the Construction Contracts Act does not cut across the rules for company insolvency proceedings, the magnitude of the exposure that many sub-contractors currently face upon the insolvency of a contractor would not arise if the provision for payments were insisted upon and the remedies available were exercised when payment was not forthcoming.
