Brian Stanley (Laois-Offaly, Sinn Fein)

Like the previous speaker, I welcome the presence of Senator Quinn and I welcome the long overdue publication of the Construction Contracts Bill. I commend Senator Quinn on his initiative and his work in crafting this legislation. The plight of small and medium-sized building contractors has created widespread hardship for thousands of construction workers, small contractors and their families. Many have fallen victim to the sharp practices of larger companies who on countless occasions have failed to honour contracts or pay for the work that was carried out in good faith on their behalf. Some contractors, even during the so called Celtic tiger years when they were making huge profits, often took the decision to delay as much as possible payment to the small builders they had employed. Sometimes payments were not paid in full and in others were not paid at all.

As the recession took hold things worsened. Many large developers and contractors, who were aided by the banks' casino-like lending policies and their friends in other lending institutions, recklessly overstretched and found themselves in financial difficulties as the housing market collapsed. More often than not, small subcontractors or individual tradesmen were first to pay the price when large building firms found themselves in trouble, as they were denied payment for their labour.

A vicious cycle was created that resulted in wages being stopped, suppliers going unpaid and long-established, reputable firms being forced under. This in turn had far reaching implications for local economies - I have seen it in my own area - as building suppliers and retailers were left without payment.

To make matters worse, the legislation that was supposed to be in place to protect builders and ensure contracts were honoured, proved useless. In some instances, banks, to their shame, advised clients not to pay creditors. They took the view that the cost of pursuing payment through the courts was prohibitively expensive. In effect, therefore, the small contractor or individual tradesman or woman was sacrificed in order to protect the over-exposed developer.

This scandalous situation resulted in many workers being forced onto the dole or having to leave these shores to find work. A friend of mine and his family will be going abroad within the next two weeks as they have been caught in this situation. He was a small contractor who employed four to ten people during the boom time. Unfortunately, he will be leaving for Canada within the next ten days.

I want to refer to one example that I am aware of in my own constituency. In 2010, subcontractors working on the N7 motorway found they were being denied payment by the main contractor who, despite being guaranteed payment themselves because they were employed on a public works contract, refused to pay the subcontractors. There was a stand-off for days when people had to protest outside compounds and try to block machinery from being used.

As a result, a number of workers went for weeks or months without pay and the small contractor was eventually left financially ruined. All of this happened despite numerous political representations from all of us, including the previous Taoiseach, Brian Cowen, who made efforts to resolve the matter because it was in his own constituency. Despite the representations, however, nothing could be done to resolve the matter because this was a dispute between two private companies. Similar situations have happened on contracts to build new schools. Unfortunately, such examples are all too typical.

Like every other Deputy in this House, I am only too aware of the many protracted disputes, legal and otherwise, between small contractors seeking payment from large building firms. Those who pursued their debts through the courts - an expensive and extremely fraught process that placed additional strain on companies and individuals already under pressure - found that judgements which ruled in their favour were ultimately worthless.

In one case with which I am familiar, a court ruling that a large contractor should pay its debt was largely rendered meaningless when the company applied to be "strike off listed" with the Companies Registration Office. This meant they were under no legal obligation to pay the outstanding amount currently owed. To put it simply, all the time and effort it had taken to get the case to court was rendered useless and meaningless.

In the course of this debate, we should remember that the financial hits being taken by many small companies are often for relatively small amounts of money. Yet being denied €20,000 or €30,000 can often make the difference between a company remaining viable or being forced into bankruptcy.

The building firms this legislation is designed to protect have played an important role in producing generations of highly skilled tradesmen. They have been to the fore in ensuring the high standards and levels of craftsmanship that characterise those working within the building industry, and which remain constant.

As the economy gets going again over the next few years and we have a stimulus, these people will be able to play an important role once more. Therefore, there needs to be a more simplified and transparent system to ensure contracts are honoured, and labour and materials are paid for on time.

I welcome the provision in the Bill that enshrines as a statutory right a timeframe for interim, periodic or stage payments. I have been told repeatedly by the owners of small companies how important that provision is for them. This would at least reduce a payee's exposure to non-payment.

Equally important, is having in place procedures and mechanisms to permit the swift resolution of payments through a process of adjudication. Sinn Féin welcomes that very much.

Harsh sanctions should be in place for contractors and developers who break a contract and refuse to pay those whose labour they have employed, in addition to refusing to pay for materials supplied.

I acknowledge that the Bill before us is a work in progress and I welcome the period of consultation with various industry stakeholders that has already taken place. There are some additional provisions which could usefully be considered for inclusion in the Bill, such as outlawing conditional payment clauses and assurances that there are minimum interim payment periods in all construction contracts.

It is the right of everyone to get paid for an honest day's work. For too long ordinary workers have had their labour exploited and rights denied.

I concur with the previous speaker on the need to have all-Ireland legislation. The Minister of State, who lives in a Border county, will know that. We live in an age where we are moving into an all-Ireland economy but companies are transient, particularly in the construction sector. It is important that this legislation is brought forward to ensure that honest, hard-working builders and construction workers are protected from the sharp practices of unethical developers and companies.

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