New minimum pay rates for construction sector under SEOs

Peninsula Team

June 28 2019

New pay rates for construction sector under SEOs

Minister for Trade, Employment, Business, EU Digital Single Market and Data Protection Pat Breen TD formally approved two recommendations from the Labour Court for new minimum pay rates in the construction and electrical contracting sectors. The new pay rates will apply to workers in the construction and electrical contracting sectors and will come into effect later this year.

Construction sector SEO applications

A Sectoral Employment Order (SEO) is a wage-setting mechanism which is governed by the Industrial Relations (Amendment) Act, 2015. Employers and trade unions that are substantially representative of a sector are entitled to jointly or separately ask the Labour Court to review terms and conditions of employment in the sector.

The BATU, Connect, OPATSI, SIPTU and UNITE applied to the Labour Court earlier this year seeking a 12 % pay increase for construction workers over a three-year period.

Connect, the Association of Electrical Contractors and the Electrical Contractors Association made a concurrent application in respect of the electrical contracting sector.

The Labour Court considered both applications and submitted its recommendations to Minister Breen in accordance with the Industrial Relations (Amendment) Act, 2015 in May.

Increased rates of pay

The Labour Court recommended a 2.7% increase for construction workers to be implemented on 1 October 2019 and 1 October 2020 which amounts to a 5.4% increase over two years.

The Labour Court issued a second recommendation to increase the minimum pay for electrical contracting employees by 2.7% from 1 September 2019.

Minister Breen accepted the Labour Court’s recommendation and laid two draft orders before the Houses of the Oireachtas earlier this month. Both orders were formally approved in June.

Electrical Contracting SEO 2019

With effect from 1 September 2019, the Sectoral Employment (Electrical Contracting) Sector 2019 is will make it compulsory for electrical contracting firms to pay workers the prescribed rates of pay and to provide a pension and sick pay scheme. The electrical contracting SEO also outlines a dispute resolution procedure to resolve disputes relating to any of its terms.

Construction Sector SEO 2019

With effect from 1 October 2019, the Sectoral Employment Order (Construction Sector) 2019 will apply to all building firms and civil engineering firms who will be legally obliged to pay the new minimum rates of pay, make unsocial hours’ payments and comply with new pension scheme, sick pay scheme and normal working hours requirements (39 hours per week).

Industrial unrest

Various employers’ groups in the construction sector were critical of the pay increases on the basis that they will increase pressure on employers in the industry and the likelihood of a construction slowdown. While the Labour Court recommendations are significantly less than what the unions sought on behalf of their members, it remains to be seen if the new SEO’s will keep all sides happy and avoid industrial unrest in the construction sector.

Is your business affected by these changes?

Employers in the construction sector will need to ensure that they are paying the minimum wages set by these new SEOs. If you have any questions on this or any other HR issue, please contact the advice line on +353 1 886 0350 to speak with one of our experts.      

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