knowledge | 2 October 2019 |

New Sectoral Employment Orders For The Construction And Electrical Contracting Sectors

September and October saw the coming into force of two new Sectoral Employment Orders, almost two years after the first Sectoral Employment Order (“SEO”) was signed into law on 19 October 2017. Both SEOs follow recommendations from the Labour Court under the Industrial Relations (Amendment) Act 2015.

The SEO for the general construction industry was signed into law on 31 May 2019 and will come into effect on 1 October 2019. This SEO replaces the 2017 SEO for the same industry.

An SEO for the electrical contracting sector entered into force on 1 September 2019. Following a recent High Court ruling, the pension and sick pay provisions of that SEO have been stayed pending a challenge by National Electrical Contractors Ireland to the SEO in its entirety. However, the remaining provisions of the SEO have now come into effect.

Sectoral Employment Order (Construction Sector) 2019

Who does the Order affect?

The Order applies to the general construction sector, the definition of which includes the construction and demolition of buildings, clearing sites, construction of boundary walls, stone work and ground levelling.

Changes to pay

These pay rates will run from 1 October 2019 to 30 September 2020:

  • Craftspersons including Brick or Stone layers, Carpenters, Joiners, Glaziers, Plasterers, Painters and others are to receive €19.44 per hour;
  • Category A workers such as scaffolders with a Scaffolding Card and four years’ experience, Bank Operatives, Steel Fixers, Crane Drivers and Heavy Machine Operators are to receive €18.86 per hour; and
  • Category B workers, which are Skilled General Operatives who have worked in the sector for more than 2 years, are to be paid €17.50 per hour.

The following basic hourly rates of pay will apply in the sector from 1st October 2020:

  • Craftspersons are to receive €19.96 per hour;
  • Category A Worker s are to receive €19.37 per hour; and
  • Category B Workers are to receive €17.97 per hour.

The SEO requires that apprentices are to be paid one third of the craft rate in their first year, and this increases year on year until it rises to 90% in their fourth year. An hourly rate of €14.14 will apply to new entrant operative workers who are over the age of 18 years and entering the sector for the first time and this will increase to €14.52 from 1 October 2020.

Other notable changes

The SEO sets a normal working week for employees in the construction sector which consists of 39 hours between Monday and Friday with normal daily working hours consisting of four days for eight consecutive hours work between 7am and 5pm Monday to Thursday, and seven consecutive hours work from 7am to 5pm on Fridays. These are considered the normal starting and normal finishing times on these days. Overtime of time plus a half or double time may need to be paid outside these hours.

Pension schemes should provide entry from 18 years of age and must have no less favourable terms than those set out in the Construction Workers Pension Scheme. An employer’s pension contribution will be €27.35 per week and death in service contribution will be €1.14 per week from the 1 October. The pension scheme structure has also been set out in the SEO. For more information on this structure please contact a member of our team.

A sick pay scheme and Dispute Resolution Procedure are also included in this SEO.

Sectoral Employment Order (Electrical Contracting Sector)

Who does the Order affect?

This order applies to workers employed as qualified or registered apprentice electricians, including qualified electricians who are employed as chargehands and foremen.

Changes to pay

A new minimum hourly rate of pay has applied since 1 September 2019. All newly qualified electricians are now to be paid €23.49 per hour, qualified electricians from their third year of employment are paid €23.96 per hour and qualified electricians from their sixth year of employment are paid €24.34 per hour. Apprentices in their first year are paid €7.05 per hour (or 30% of the rate) with this rising to €18.80 per hour (or 80% of the rate) in their fourth year.

Other notable changes

The basic working week is set at 39 hours between Monday and Friday and normal daily working hours are eight hours of work between 7am and 5pm Monday to Thursday and 7am to 4pm on Friday, in line with the construction sector. Overtime hours constitute time worked outside of these hours and may incur time plus a half or double time payments. There is a provision for Unsociable Hours Worked for specific projects where the hours will vary from normal daily working hours where rates of time plus one quarter and time plus one third will apply depending on when in the day the hours are worked.

Pension, sick pay and death-in-service contributions are also in line with the construction sector, with eligibility to enter a pension scheme beginning at 20 years of age. A Dispute Resolution Procedure is also included in this SEO.

Partial Stay on SEO Application

In a recent ruling, the High Court placed a stay on the obligation of employers in the electrical contracting sector to pay amounts in respect of sick pay and pension contributions under this SEO pending the hearing of a challenge by National Electrical Contractors Ireland (the “NECI”) which seeks to invalidate the SEO in its entirety. The Court confirmed that the stay applies for all employers in the sector and not merely those who are members of the NECI. If the challenge is unsuccessful, employers will be liable for contributions backdated to 1 September 2019, the date on which the SEO came into force.

Where to from here?

While the outcome of the NECI’s challenge remains to be seen, all provisions of the SEO for the Electrical Contracting Sector other than those relating to pensions and sick pay have entered into force. Employers in both the electrical contracting and general construction industries should ensure that they comply with the requirements set out in the respective SEOS, as SEOs are legally binding and can be enforced by the Workplace Relations Commission. Exemptions can be applied for at the Labour Court in certain circumstances, including where an employer is in severe financial difficult and the majority of workers concerned agree to the exemption.

How can we help?

Our Employment, Pensions & Incentives Team along with our Construction & Engineering Team have significant experience in advising employers in the construction industry on a variety of issues, including claims under construction contracts regarding the SEOs. For further information, please contact the individuals below. Alternatively, your usual contact would be happy to assist.

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.

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