Friday 30 September 2016

National wage deals needed to level playing field in building tenders - CIF

Published 05/11/2015 | 02:30

Construction Industry Federation President, Michael Stone. Photo: Damien Eagers
Construction Industry Federation President, Michael Stone. Photo: Damien Eagers

BUILDERS' lobby group the Construction Industry Federation (CIF) has called for workers' salary scales to be subject to registered national agreements.

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And CIF President Michael Stone said it was "inevitable" that wages would increase over the next 12 to 18 months, but said the lack of Registered Employment Agreements (REAs) were putting some companies at a disadvantage when tendering for work.

This was because firms which paid less than market rates had an unfair advantage over those which invested in their workers, he said. He added that REAs were a major factor in maintaining industrial peace, which would help attract foreign direct investment (FDI).

"The Registered Employment Agreements are important," he told the Irish Independent.

"As the country comes back into a growth phase, the REAs served the country well. We need to see Government coming with us and move forward to allow them to be put in place.

"One of the attractiveness for FDI companies is there are very good relations on the ground, there's been very few industrial disputes.

"One of the reasons was there was an agreed wage level, with proper wages being paid and pensions. The new legislation has been enacted, but has to go through a number of stages. We're expecting that early next year.

"We need to get these things in place so there's a wage rate agreed across the market, and companies can tender on those rates." REAs were in place until May 2013 when the Supreme Court ruled that the act which covered six agreements across a number of sectors was unconstitutional.

This was because exclusive power to make laws was vested in the Oireachtas, but REAs between employers and workers effectively had legal status, despite not being enacted by the Oireachtas. Around 80,000 workers were covered under previous agreements.

Among the reasons why the CIF believe the REAs are needed is to allow a level playing field for contractors seeking work, to bring certainty to labour costs and to provide a disputes procedure to help avoid industrial unrest.

Mr Stone said that below-cost tendering had resulted in some company closures, but the lack of clarity around salaries also meant attracting workers was difficult.

"Below cost tendering has caused a lot of companies to go out of business. It leads to a problem attracting people into the industry.

"Businesses need to make profit. The means to have a regularised wage agreement cross the industry allows a level playing pitch to bid for projects.

"The client knows they're getting value for money, and the contractor can get a reasonable level of profit."

He added that salary increases across the construction sector were required, especially given the downturn of recent years. "I think there hasn't been a labour increase since 2007. Some level of wage increase is inevitable over the next 12 or 18 months."

Full interview, p5

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