Revealed: how building bosses cheat their workers

OVER €35 million is being pocketed every year by thousands of construction firms that are cheating 50,000 employees of mandatory pension entitlements.

An Irish Examiner investigation has found that evasion in the industry is so extensive that it affects some of the largest infrastructural projects in the State. Government and local authority projects, including a housing project for South Dublin County Council, are also failing to provide pension rights to some workers.

Under pensions regulations, the country's 4,500 construction companies must register all general operatives in the Construction Federation Operatives Pension Scheme (CFOPS).

The firms must contribute a weekly payment of €13.65 for each worker, who is then entitled to sickness and death benefits, including a €22,000 mortality benefit payable to families.

However, the scheme the largest single pension scheme in the country currently has just 53,000 active members. An additional 50,000 workers are not registered by their employers, saving the firms an estimated €35m.

Of 30 people who lost their lives on construction sites between January 2002 and July this year, only eight were covered by the pension scheme. At least 22 families were deprived of any compensation for the death of their loved ones.

The best estimates, resulting from an internal review two years ago, found compliance stood at less than 60%.

Insiders now openly acknowledge that no more than half of all eligible workers are actually covered.

Unions said building companies failing to pay obligatory sickness and pension contributions were saving billions. Certainly between €35m and €100m of workers' entitlements have been siphoned away by construction companies every year for decades.

SIPTU construction branch official Mick Finigan said it was scandalous that employers were getting away with evading the mandatory scheme.

"I just can't understand with the level of profit that is being made that companies won't spend the money to register their workers. But there surely is a moral obligation there as well," he said.

CFOPS administrator Pat Ferguson played down the issue of non-compliance.

"There is always a percentage of people who just won't obey the law, but as far as this has been a major issue for the industry, it isn't really," he said.

However, Brian Daley, the head of the scheme's policing element, the Construction Industry Monitoring Agency (CIMA), which has caught 600 firms in the past two years, said non-compliance was a serious issue.

"We are making progress. But the single biggest area of non-compliance is companies in the scheme not paying for all their workers, and that's very difficult and time consuming to track," said Mr Daley.

The CFOPS scheme was criticised by unions who believe there is a conflict of interest because the scheme's only staff are employees of the builders' group, the Construction Industry Federation.

However, CIF spokesman Kevin Gilna rejected the claim. "There is a board of trustees which includes union members. If the unions are unhappy with anything they should take it up at that level," he said.