Sectoral Wage Rules: EROs and SEOs explained

Moira Grassick - Chief Operating Officer

October 04 2022

First published: 04/10/2022
Last updated: 04/10/2022

The Government recently signed off on an eighty-cent increase in the National Minimum Wage. From 1 January, 2023 the minimum rate of pay will go to €11.30 per hour.

For more information on Irish minimum wage rules see our guide here.

As well as minimum wage legislation, employers in certain industries must provide staff with minimum levels of pay and employment conditions as set out in any applicable Employment Regulation Order (ERO) or Sectoral Employment Order (SEO).

In this post, we take a look at some recent developments in Employment Regulation Orders (EROs) and Sectoral Employment Orders (SEOs).……

What is an employment regulation order (ERO)?

An ERO is drawn up by a Joint Labour Committee (JLC). A JLC is made up of equal numbers of employer and worker representatives and aims to establish minimum working conditions for employees in certain sectors. Typically, the sector will have no history of collective bargaining and staff on low wages.

Once the terms are set, the Employment Regulation Order (ERO) is adopted by the Labour Court, and given statutory effect by the Minister for Enterprise, Trade and Employment. Once in place, the Employment Regulation Order (ERO) obliges employers in the relevant sector to pay the minimum wage rates and provide the prescribed conditions of employment to staff.

There are currently three Employment Regulation Orders (EROs) in effect.

Early Learning and Childcare Employment Regulation Orders

Two new Employment Regulation Order (EROs) addressing the Early Years Services Sector came into effect on 15 September this year.  The new minimum rates of pay range from €13 per hour for early years educators to €17.25 per hour for graduate managers.

The ERO will apply to approximately 27,000 staff and it is estimated that more than 70% of childcare workers have received a pay rise under the scheme.

Contract Cleaning Employment Regulation Order

A new Employment Regulation Order (ERO) for the Contract Cleaning Industry came into effect on 1 April 2022. The new Employment Regulation Order (ERO) replaced a 2020 version and raised the statutory minimum rate hourly rate for contract cleaners to €11.50. The Employment Regulation Order (ERO) also provides for another increase to €11.90 per hour from 1 April 2023 and a further increase to €12.30 per hour from 1 April 2024.

Security Industry Employment Regulation Order

There has been an Employment Regulation Order (ERO) in place for the Security Industry since 2017. A new Employment Regulation Order (ERO) for the security sector was scheduled to come into effect on 29 August 2022. The new Employment Regulation Order (ERO) included increases in minimum wage rates to €12.50 per hour from 29 August 2022 and €12.90 from 1 February 2023.

The new Employment Regulation Order (ERO) has not come into effect as scheduled, however. Three smaller security companies secured an injunction preventing the Employment Regulation Order (ERO) from taking effect pending the outcome of a judicial review hearing. The judicial review hearing is due to commence in early November.

What are sectoral employment orders (SEOs)?

Sectoral Employment Orders (SEOs) are legally binding orders that require employers in specific sectors to provide staff with certain minimum rates of pay and pension contributions. Following a request from a trade union or an employer’s organisation, the Labour Court can conduct an examination into the terms and conditions of employment relating to remuneration, sick pay and pension provision in relation to a particular sector of the economy. The Labour Court can then make a recommendation to establish a SEO for that particular sector which needs to be given statutory effect by the Minister for Enterprise, Trade and Employment.

There are currently three Sectoral Employment Orders (SEOs) one of which remains deadlocked in an ongoing legal battle.

Mechanical Engineering Building Services Contracting Sector Sectoral Employment Order

In effect since March 2018, this Sectoral Employment Order (SEO) sets the statutory minimum rates of pay for workers employed in the Mechanical Engineering Building Services Contracting sector. It also requires employers in the sector to establish pension and sick pay schemes.

Construction Sector Sectoral Employment Order

In effect since February 2022, this Sectoral Employment Order (SEO) sets the statutory minimum rates of pay for workers in the construction sector. Employers must operate in the construction sector under the Sectoral Employment Order (SEO) and workers are categorised into craftspeople, construction operatives, new entrant operatives and apprentices. It also requires employers in the sector to establish pension and sick pay schemes.

Electrical Contracting Sector Sectoral Employment Order

Although scheduled to come into effect since February 2022, this Sectoral Employment Order (SEO) remains in legal limbo. The Sectoral Employment Order (SEO) sets out the minimum rates of pay, pension and sick pay entitlements for workers and apprentices in the Electrical Contracting Sector but has not yet come into force.

Much like the recent legal action by smaller employers in the security sector, an association of electrical contractors, National Electrical Contractors Ireland (NECI) have been engaged in a long-running legal battle to prevent this Sectoral Employment Order (SEO) from coming into effect.

Most recently, the NECI have received notification from the Chief State Solicitor’s Office that the State will consent to an order of the High Court quashing the Electrical Contracting Sector Sectoral Employment Order (SEO).

This Sectoral Employment Order (SEO) therefore will be ineffective as soon as the High Court makes the necessary order.

Minimum wage risks

It’s vital for employers to ensure they comply with minimum wage rules whether they fall under primary legislation like the National Minimum Wage Act or secondary legislation like Employment Regulation Orders (EROs) and Sectoral Employment Orders (SEOs).

Failing to adhere to the law could lead to expensive payment of wages claims.

Peninsula’s employment law experts can help you manage national minimum wage payments, or any other questions related to employee pay.

Peninsula clients also receive bespoke workplace documentation and policies that are regularly updated in line with any changes in employment law.

Speak to one of our experts today on 1800 719 216.

Suggested Resources