Building firms accept 7.5% pay cut

CONSTRUCTION employers have voted to accept a 7.5% cut in the minimum rates for the industry as recommended by the Labour Court at the start of July.

The Construction Industry Federation had been lobbying the court for as much as a 20% reduction in the legally binding rates which are set under a Registered Employment Agreement (REA) for the sector.

It had argued that such a percentage drop could help restore some of the 200,000 jobs lost in the industry over the last two years.

It had pointed out that general operatives here were the dearest in Europe and as their wages were 60% higher than in the north, work was being lost to workers from over the border.

However, arguing against that, trade union leaders had said construction workers had already suffered a massive drop in income from loss of bonuses and overtime and could not afford any cuts in basic rates of pay.

The Labour Court said the basic rate should be cut by 7.5% and the reduction would also apply to pay-related allowances. However, it made it clear that the cuts should be seen as a temporary derogation from the REA governing the sector and it should be reviewed in January 2012 and in each subsequent year.

It based its decision on the fact that there had been a similar cut in wages in the public sector.

For the last two months, senior figures in the Construction Industry Federation had been holding talks with employers around the country to gauge their opinion on the proposed cut and yesterday they re-gathered and voted by a majority to accept the terms.

“No one in the industry will be jumping up and down about it,” one employer source pointed out.

This morning, senior construction union officials gather in Dublin to discuss their next position on the recommendation.

Sources have indicated it is likely those officials will decide to take the recommendation back to their individual unions and ask them whether to ballot members or to allow the executive to make a decision on their behalf.

Employment in the construction industry has fallen from a peak in 2007 of 286,000 direct employees to 129,000 direct employees at the last count.

For the last few months, the Construction Industry Federation has been demanding that the infrastructural projects proposed under the National Development Plan be started.

“The single biggest difficulty is lack of work opportunities,” a spokesman for the federation said.

“CIF will continue to make the case to government for the implementation of its infrastructural projects.”


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