Construction sector looks to cut pay by 20%

The Construction Industry Federation has formally submitted a claim to the Labour Court seeking a 20% reduction in the wage rates paid to workers in the industry.

The sides met at the court yesterday to discuss the employer body’s demand to change the industry’s registered employment agreement (REA) which sets pay and conditions. That demand also, among other things, includes:

* The introduction of a new entry grade (Grade E) at the statutory minimum wage with an increase of 5% per annum for 4 years before moving to Grade D and the current wage scale.

* Overtime to apply to individuals after completion of nine hours per day from Monday to Thursday and eight hours on Friday when required. (Currently workers are paid overtime after eight hours Monday to Thursday and after seven hours on a Friday)

* Time and a half to apply until 4pm on a Saturday. (Currently, time and half overtime rate only applies to 1pm on a Saturday).

nTravelling allowance to be paid only after 10 miles with a maximum payment of one hour per day to apply thereafter. (Currently all travel is paid the travelling allowance)

Speaking ahead of the Labour Court hearing, CIF director general Tom Parlon said there was a very limited pool of work available to construction companies.

“Employment numbers in the industry have dropped as a result, recently falling below 100,000 from a high of 270,000 in 2007,” he said. “The simple fact is that average tender prices have fallen by 30% since the downturn while construction wages have only diminished by 5%. Construction companies who are looking to honour the wage agreement are being priced out of the contracts. They can’t compete with black economy operations who do not pay attention to the REA. That is why we are asking the Labour Court to review the current REA and reduce the level of wages being paid.

“The level of employment in the construction sector seems to be on a downward spiral but that process can be slowed down if the wage rates are reduced.”

He said if current wage levels remain, more construction workers will lose their jobs.

“Companies who are not able to competitively price their tenders because of the current wage rates will not win work. If they do not have work they will not be able to afford to retain their staff for much longer. The reality is that a reduction in the REA is in the interests of everyone involved in the construction sector during this very difficult period for the industry.”

Unions have argued that pay cuts are not the way to get the industry out of its current predicament and they will fight the cuts being proposed by the employers’ body.