Construction union rejects 7.5% cut in minimum wage

THE executive of the country’s second largest construction union has unanimously rejected a recommendation by the Labour Court that the minimum wage in the industry be dropped by 7.5%.

At the start of July, the court ruled the legally binding rates which are set under a Registered Employment Agreement (REA) for the sector 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.

Earlier this month members of the industry’s largest employer body, the Construction Industry Federation, voted to accept the recommendation, even though it had previously been canvassing for a wage cut of as much as 20%.

Construction industry unions decided two weeks ago that they would go back to their individual unions, establish whether they wanted to accept or reject the deal.

Each of those unions will then return to the umbrella grouping and lodge their vote and an aggregate position would be decided.

Yesterday, the Technical, Engineering and Electrical Union, (TEEU) the second largest union in the sector, said the cut was a bridge too far and it would be pushing for an overall rejection by the construction unions.

“Our members would not thank us for accepting this pay cut,” said TEEU general secretary Eamon Devoy.

“We do not believe that it would contribute anything to economy recovery, quite the reverse. It would continue to depress domestic demand, which is now exerting a serious negative impact on the demand side.”

He said one particular problem was some large contractors on public procurement projects were signing up to all the relevant conditions but effectively reneging on those commitments by farming out the work to subcontractors.

“These subcontractors, many of them based in the north, often do not comply with the REA.”