Construction unions vote to cut minimum wage by 7.5%

CONSTRUCTION unions have voted to accept a recommendation by the Labour Court that the minimum wage in the industry be dropped by 7.5%.

The pay cut will affect 70,000 people who are still employed in construction, a drop of more than 100,000 on the numbers who would have been employed just three years ago.

At the start of July, the Labour 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 should 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.

In September 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%.

The reduction had looked set to be rejected after the Technical Engineering and Electrical Union voted to reject it. However, it is understood SIPTU, which has a substantial percentage of members whose terms and conditions are governed by the REA, voted to accept.

Yesterday the umbrella body for construction unions met to make their aggregate decision and, after a vote, it was decided to accept the reduction.

Fergus Whelan of the Irish Congress of Trade Unions said: “No one took pleasure in this, but the building workers themselves felt the most important thing was to retain the REA and if that meant a reduction in the rate, they were prepared to accept that.”

The union umbrella group will now write to the Labour Court asking it to alter the Registered Employment Agreement.

The Construction Industry Federation, which at the start of this month had been asking the court to press ahead and reduce the rate, said the vote in favour was welcome as it gives clarity to employers as they prepare for the future.