Builders’ group may pull out of pay deal

IN spite of a Labour Court recommendation for a 7.5% pay rate reduction, the Construction Industry Federation has given a strong indication it may withdraw its support from the Registered Employment Agreement which decides pay and conditions in the sector.

The CIF had applied to the Labour Court for a 20% reduction in the pay rates in the construction sector, pointing out that such a wage cut could help restore some of the 200,000 jobs lost in the industry over the last two years.

However, arguing against the cut, trade union leaders 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.

Weighing up the arguments, 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 Registered Employment Agreement (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. Neither the CIF nor worker representatives were happy with the ruling and both said their members would struggle to accept it.

“The few of our members who still have jobs, and they are very few, have already had huge losses of earnings because in the boom time there was always overtime, bonus schemes and payment-by-result schemes,” said Fergus Whelan of the Construction Industry Federation. “This Labour Court recommendation comes as a kick in the teeth to them.

“From the CIF’s point of view this is not about pay cuts at all. There are elements within the CIF who will be anxious to tear up this recommendation because the real agenda is to get rid of the REA. On the trade union side, it will be very difficult for building workers to vote for this type of cut. Some will probably vote for it on the basis that at least the REA will be protected, but I think most of our members believe that even if they accept the agreement, the CIF’s next target will be the REA.”

The CIF said the recommendation “does not go nearly as far as the CIF had sought” given the huge challenges facing all sectors of the construction industry.

CIF director general Tom Parlon said he was disappointed, as the 20% cut sought had been a considered view given the realities in the industry. He confirmed the lack of flexibility in the REA and the fact that employers cannot negotiate with their workers was a hindrance.

“We are paying over 60% more than the rate paid in the north,” he said. “From that point of view we are losing jobs to the north.”