10% pay rise for Construction Sector under new Sectoral Employment Order

A Sectoral Employment Order (SEO) for the general construction industry has been signed into law by the Minister for State at the Department of Business, Enterprise and Innovation, Pat Breen.

Effective from 19th October 2017, the order provides for mandatory terms and conditions in the construction sector, including pay, pensions and sick leave. In finalising the Order, the Labour Court received submissions from the Construction Industry Federation (CIF), UNITE the Union, the Irish Congress of Trade Unions and the Trustees of the Construction Workers Pension Scheme.

Who does the Order affect?

The Order applies to employers in the construction sector, regardless of whether or not they are CIF members. The sector is defined to include both “Building Firms” and “Civil Engineering Firms”, examples will include companies involved in; construction, reconstruction, alteration, repair, painting and decorating. It is estimated that the new Order will apply to approximately 50,000 workers. Notably electricians and plumbers are not included.

Hourly Rates

The new minimum hourly pay rates are:

• New Entrant Workers: €13.77
• Category 1 Workers (General Operatives with more than 1 years’ experience: €17.04
• Category 2 Workers (Skilled General Operatives): €18.36
• Craft Workers (Includes: Bricklayers, Carpenters, Plasterers): €18.93 
• Apprentices
• Year 1: 33.3% of Craft Rate
• Year 2: 50% of Craft Rate
• Year 3: 75% of Craft Rate
• Year 4: 90% of Craft Rate

These new rates are approximately 10% higher than they had been under the previous Registered Employment Agreement (REA).

Unsocial Hours

The following unsocial hours payments will now apply:

• Monday to Friday, normal finish time to midnight: time and a half
• Monday to Friday, midnight to normal starting time: double time
• Saturday, first four hours from normal starting time: time and a half.  All subsequent hours until midnight: double time 
• Sunday, all hours worked: double time
• Public holidays, all hours worked: double time plus an additional day’s leave

Pension Scheme and Sick Pay Scheme

The Order provides that employers must provide pension benefits with no less favourable terms than those in the Construction Workers Pension Scheme (CWPS). The Order also provides for a mandatory sick pay scheme, in recognition of the health and safety risks posed to industry workers.

Dispute Resolution

The Order includes a new dispute resolution procedure. No strike or lock-out is allowed unless and until all stated dispute resolution procedures have been exhausted.

Where to from here?

The Order is a significant development for those in the general construction industry. Employers will need to review their payment practices to ensure that they comply with the new requirements.

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