Ms Jean Winters:

We thank the joint committee for giving us the opportunity to attend here today and to outline our observations on the general scheme of the Industrial Relations (Amendment) Bill 2014. The Construction Industry Federation is the representative body for employers in the construction industry. We represent contractors and members throughout all sectors of the industry, including general contracting, specialist sub-contracting, civil engineering contracting, mechanical and electrical contracting, and house-building. We have 13 branches throughout the country representing the interests of our members and we have offices in Dublin, Cork and Galway.

We welcome the publication of this Bill. The Supreme Court judgement in 2013 left a vacuum in the industry, which has caused huge difficulties for our members. There have been difficulties in tendering and trying to resolve disputes that arise, and we have been left without any kind of certainty in the industry with regard to labour costs. We are hopeful that the industry is emerging from recession and that over the coming year and into the future the industry will be capable of creating jobs. Since the recession hit, approximately seven years ago, over 180,000 construction workers have lost their jobs, which is a huge number of people left without work. We are hopeful that when we emerge from recession we will be capable of creating jobs.

What we need in the industry is certainty about labour costs. We need a level playing field for contractors when they are tendering for work and we need a robust and vigorous disputes resolution procedure to enable us to resolve the disputes that will inevitably arise. The construction industry is characterised by its competitive nature. Contractors are in competition with one another for jobs, both within the State and outside the State, and it is essential that they can compete for work on a level playing field with regard to costs. Labour costs account for over 50% of any tender and when our members are trying to compete we need certainty about labour costs. We also need a vigorous disputes resolution procedure. The industry is labour-intensive. A worker in the construction industry can expect to have a job for the duration of a contract. If that contract is finished, the employer may transfer the worker to another site if another site is available. If that is not the case, that worker could be made redundant. Construction workers, therefore, are constantly moving from employer to employer and from site to site, so the industry is transient in nature and because it is labour-intensive it is prone to volatility. That is why a vigorous disputes resolution procedure is essential to us.

Part II of the heads of Bill provides a legislative framework to allow individual employers and trade unions to come to an employment agreement and to register that agreement. Registered employment agreements, REAs, are binding only on the parties to the agreement and therefore we believe that REAs will not really be of benefit to the construction industry in general. The industry is competitive by nature and we must ensure that there are universally applicable rates of pay for all employers and workers in the industry, regardless of whether they have been a party to the agreement or not. We are therefore concentrating in particular on Part III, which deals with registered employment orders. These are sectoral agreements or provision for sectoral orders, which we believe are more applicable to the construction industry.

There are a number of issues in connection with the registered employment agreements which we would like to address. I will go through some of the heads on which we would like to comment.

Head 13 deals with non-application of the Act. It sets out the various family members, generally speaking, to whom the Act would not apply. The reason we are looking for this legislation to be enacted in the industry is that it would apply to all employers and all workers of a certain category, class or type. Therefore, we would look to have head 13 omitted from the Act because it would not apply to, say, a family firm. The construction industry is characterised by small- to medium-sized enterprises. There are family firms throughout the country. If a family firm was exempt from this part of the legislation purely because the owner employed family members, that would place the firm at a competitive advantage in comparison to other contractors. We believe this would defy the basic principle of the legislation and therefore we would look to have the head omitted.

Our comments on heads 14 and 16 are similar. The wording in the heads states that an organisation representing workers, on its own behalf or jointly with an organisation representing employers, can apply to the Labour Court for it to carry out a review and make a recommendation to the Minister. It does not specify that an organisation representing employers can apply to the Labour Court for a review on its own or jointly with an organisation representing workers. We have been assured by the Department that the intention is that any organisation representing either employers or workers may make an application to the Labour Court, but we would like clarity on that issue. The framework document that was issued in February in connection with this legislation and the briefing document issued by the Department in July would lead us to believe that any organisation could apply to the Labour Court. These comments apply to heads 14 and 16.

Head 21 looks at the recommendation of the Labour Court and sets out the principles and policies that the Labour Court must take into consideration when making its recommendation. One of those is that it must take the general level of wages applying into account. We would like that extended to include the general level of wages applying to workers of a similar class, group or type, not just in Ireland but also in other EU member states. This would be to ensure that Irish construction workers' rates of pay are not out of line with those that apply in other EU member states. In particular, we would be thinking of contractors in the North, because Irish contractors have traditionally been in competition with contractors from Northern Ireland and we would like to make sure that the Irish construction workers' rates of pay are not out of line with other jurisdictions.

Head 22, on the dispute settling provisions, is of particular importance to us. The wording in the heads of Bill provides that, in general, if a dispute occurs between a worker and his employer in relation to something that is in the order, a strike or lockout cannot occur until the dispute has been put forward for resolution by the LRC or the Labour Court. We would like the dispute resolution procedure to be strengthened, and for the Bill to state that if a dispute occurs between a worker and an employer to whom the order relates, a strike or lockout will not occur until the dispute has been put forward. In other words, the dispute resolution procedures should not apply just to a dispute that may occur about an issue in the order. The disputes resolution procedure should apply to any dispute that may arise between workers and employers. The only issues that would be covered by the order would be rates of pay and conditions of employment and pensions and sick pay. There may be disputes.

The only issues that will be covered by the order will be rates of pay, conditions of employment, pensions and sick pay. There may be disputes. As I said, the industry is a labour-intensive one. It is transient in nature and, therefore, prone to volatility, which is why the dispute resolution procedure is very important to us. We would like a strengthened dispute resolution procedure that would help to resolve any disputes that may arise in the industry.

Head 26 deals with exemptions and derogations. While we accept that the conditions set out in the Bill attaching to exemptions are quite strict, which is good, we believe the basic principle of an order is that there is a level playing field in regard to tendering on labour costs from an employer's perspective and that there are fair, sustainable and reasonable rates of pay from an employee's perspective. We would prefer to see the derogations omitted from the legislation because, again, we believe that defies the basic principles of the order in the first place.

Lastly, but of huge importance to us, are the compliance and enforcement provisions. The Bill states quite rightly that the compliance and enforcement provisions would be consistent with those set out in the Workplace Relations Bill, but the importance of compliance and enforcement cannot be overstated from our perspective. In the past, when we had registered employment agreements, the issue of compliance with, and enforcement of, those agreements was hugely important. As I said, many of our members and contractors in the Republic would be in competition with contractors from the North. It is essential that there is provision there for those who will carry out compliance and enforcement and that they have the necessary authority and powers to ensure that all contractors, regardless of origin, will be forced to comply with the provisions of the order. It is our view that the National Employment Rights Agency is the appropriate body to carry out compliance in the industry and that it should have adequate resources to ensure that it is capable of ensuring compliance with the provisions of the order.

We believe NERA should have a unit dedicated purely to the construction industry, because of the size of the industry, the number of workers involved in it and the transient nature of it, and that it would have the necessary authority and powers to ensure that contractors, not only those based in the State but those based outside it, comply with legislation. If that necessitates provision being made for contractors outside the State having bases or offices in the State to enable NERA carry out its functions in compliance and enforcement, that should be done. Those are our views and observations on the legislation.

As I said, the important aspects of it are that it would bring certainty to the industry. We had that certainty until May 2013 when the Supreme Court struck down REAs. We need certainty in regard to labour costs because the industry is emerging from recession. We believe we are capable of creating employment. Currently, 106,000 construction workers are employed in the industry and we are only emerging from recession, so we hope we will be in position to create more employment. That is the reason we need certainty in regard to labour costs, stability and a proper dispute resolution procedure and to ensure that whatever order is put in place can be enforced and complied with.