New Sectoral Employment Order for the Mechanical Engineering Building Services Contracting Sector

With effect from 6 March 2018, a new Sectoral Employment Order has effect in the mechanical engineering building services contracting sector.

The Order is the second such SEO to be given effect under the Industrial Relations (Amendment) Act 2015. The first was the Sectoral Employment Order for the Construction Sector which came into effect in October 2017.

The SEO framework under the Industrial Relations (Amendment) Act 2015 was introduced following the decision of the Supreme Court in McGowan v Labour Court Ireland in 2013 in which the Registered Employment Agreement system was declared unconstitutional.

Who does the Order affect?

The Order applies to qualified plumbers and pipefitters and registered apprentice plumbers and pipefitters (craftsperson) employed in the mechanical engineering building services contracting sector. It also includes those qualified plumbers and pipefitters who have acquired additional or advanced welding qualifications and who are required to function as welders on a day to day basis within the sector. The order applies to all employers of such workers including agencies. The Order is legally binding and its terms are enforceable in the Workplace Relations Commission (“WRC”).

Principal Terms under the SEO

Hourly Rates

The Order makes it compulsory for relevant Contracting Firms to pay workers the following  minimum hourly rates of pay:

  • Newly Qualified Workers (Category 1 Workers): €22.73 per hour
  • Workers Starting Their Third Year (Category 2 Workers): €23.33 per hour
  • Workers Starting Their Sixth Year (Category 3 Workers): €23.60 per hour
  • First Year Apprentices: 33.3% of Category 1 Worker hourly rate, to increase to 90% for Fourth Year Apprentices

The Order also fixes unsocial hours payments at either “time plus a half”, or double time, depending on the timing of the work.

Changes to other terms and conditions

The Order provides that employers must provide pension benefits and sick pay schemes on no less favourable terms, including both employer and employee contribution rates, than those laid out in the Construction Workers Pension Scheme and the Construction Workers Sick Pay Scheme. Additionally, the pension scheme is to include a death in service contribution.

Dispute resolution

A dispute resolution procedure is also included in the Order. No industrial action can take place in relation to matters the subject of the Order until this procedure has been complied with. A worker must raise any individual dispute with their employer at local level, and, if the grievance is not resolved, may refer it to the Adjudication Service of the WRC. Either party can appeal the outcome of the Adjudication Hearing to the Labour Court. In collective disputes, the grievance must be raised with employers, and if unresolved, referred to the Conciliation Service of the WRC. If the matter still remains unresolved, it may then be referred to the Labour Court for investigation and a recommendation.

Action points for employers?

Employers in the mechanical engineering building services contracting sector will need to review, without delay, their payment practices to ensure that they comply with the new requirements set out in the Order.  SEOs, having a legislative footing, are legally binding on the sectors to which they apply and their provisions are enforceable by the WRC.

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.