Pearse Doherty (Sinn Fein)
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This issue is the need to introduce legislation so that all those successful in tendering for State contracts would be obliged to comply with the registered employment agreement as laid down for the construction industry. I bring this to the Seanad because I am aware of certain incidents and have been in direct correspondence with the Minister about them.

In the county I represent, Donegal, companies are bidding for State contracts such as the construction of schools or much-needed refurbishment work to schools or Garda stations, among other public works. Whereas companies from Donegal must comply with the registered employment agreement, companies from the Six Counties do not have to comply with the agreement, leading to an anomaly. I am for an all-Ireland economy and do not advocate the idea that people from Strabane should not be able to bid for a contract in Lifford. However, a company in Strabane should not be able to bid for a contract in Lifford while paying their employees lower rates than the Donegal company.

The registered employment agreement sets out minimum wage rates for its workers. For example, an electrician under the registered employment agreement is paid €21.49 per hour, with the cost to the employer of the labour per week, taking in employer's PRSI and pension contributions, coming to €957.29. If we allow State contracts to be awarded to companies outside the State which do not have to comply with the registered employment agreement or pension scheme, we are discriminating against our own registered contractors in this State. There is no way companies in places such as Donegal can compete with those outside the State.

Is there a way to introduce legislation to ensure that out-of-State contractors would be obliged to offer their employees the same terms and conditions laid down by the registered employment agreement in the South? I note the issue of registered employment agreements has been taken to the High Court and a judicial review was sought with a judgment given last week. I do not support the idea of renegotiating these agreements but this issue is about ensuring compliance across the island. I noted the judge in the case stated the agreement applies to self-employed people and subcontractors, and out-of-State workers should enjoy the terms and conditions as laid down in the agreement while working in southern Ireland.

An example may clarify the issue. There is much-needed work ongoing in Pobalscoil Ghaoth Dobhair, a secondary school I attended. An emergency works scheme will start over the next couple of weeks. There is a pre-qualification application sent out by the Department of Education and Skills, and this is done across the board. Some other Departments dealing with public works ask in a questionnaire if the applicant complies with the registered employment agreement or the pension scheme, which is a signal that there is compliance with the agreement. There is no qualification in the Department of Education and Skills.

I do not want to name the company which has been successful in the Gweedore project but it comes from outside of the State. I do not know if it complies with the agreement but having spoken to people involved in the application, it seems likely that companies in the past and in this case may not be compliant with the registered employment agreement.

Will the Minister of State shed light on this and can legislation be introduced in this respect? Is the legislation already in place but not enforced adequately? Could we ensure through pre-qualification documentation from the Department that we ask all companies - both inside and outside the State - that they be compliant with the registered employment agreement and pension scheme? How can we address the issue otherwise as it is currently unacceptable to companies in Donegal.

Senator Keaveney and I understand how many State contracts are going across the Border. As a republican I have no problem with people across the Border getting the work as long as the employees are treated the same and there is a level playing field. If it is a case that a company on the other side of the Border can pay a lower wage for doing a job in Donegal than a company from the county, the indigenous companies will not be able to compete.

Dara Calleary (Mayo, Fianna Fail)
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I thank the Senator for raising this issue and his ongoing interest in the area. I assure the House that one of the objectives of the industrial relations and employment law provisions currently in force in this country is to uphold a level playing field in the construction sector in which common labour costs apply to all contractors under the terms of the registered employment agreements.

An employment agreement is an agreement made either between a trade union and an employer or employer's organisation at a meeting of a registered joint industrial council which relates to the pay or conditions of employment of any class, type or group of workers. Such agreements may be presented to the Labour Court for registration. Where the Labour Court is satisfied that the agreement presented satisfies the statutory requirements, it will register said agreement. The effect of this is to make the provisions of the agreement legally enforceable in respect of every worker of the class, type or group to which it is expressed to apply and to his or her employer, even if such worker or employer is not a party to the agreement.

The maintenance of a level playing field with regard to the determination of basic wages and conditions is one of the objectives of the parties to registered employment agreements, REAs. The existence of these legally backed agreements is one means, recognised under European Union law, of ensuring contractors from outside this jurisdiction do not obtain an advantage over local contractors in terms of wage costs. As Senator Doherty stated, a recent ruling of the High Court in an action seeking to challenge a decision of the Labour Court upheld the Labour Court's view that in the absence of our system of REAs, contractors from other member states could readily exercise their freedom to provide services in this jurisdiction under the relevant EU treaty at the same rates and conditions of employment as apply in their country of origin. Accordingly, as all companies who are awarded State contracts are already legally obliged to comply with the relevant REAs, we are of the view that no new legislation is required.

There are two REAs in place for the construction industry. The first of these deals specifically with pension, assurance and sick pay, while the second relates to wages and other conditions of employment. Separately, there is also an REA in place for the electrical contracting industry which covers all terms and conditions of employment in that sector, including pensions and sick pay.

The construction industry REA in respect of pension assurance and sick pay requires employers in the construction sector to become and remain a party to a contributory pension scheme approved by the Revenue Commissioners and sets out the conditions upon which pension and mortality payments are payable, and the associated minimum amounts and benefits. This REA does not specify any particular pension scheme to apply but rather sets out the general criteria within which any such scheme should operate. The REA is an agreement reached between employers and trade unions representative of workers in the sector. The construction workers pension scheme, generally referred to as the CWPS, was established on foot of the REA. It is an independently run occupational scheme.

While it is not a legal requirement for employers and employees in the construction industry to pay into this particular scheme, it is, as already stated, a legal requirement that employers provide for pension, mortality and sick benefits for those workers to whom the REA applies. The conditions upon which such pension, mortality and sick pay benefits are payable and the amounts thereof must not be less favourable than those which are set out in the REA.

The construction industry monitoring agency, CIMA, which was established by the Construction Industry Federation, CIF, and ICTU, monitors compliance with the REA with a view to ensuring employers register their employees in the scheme and pay weekly contributions on their behalf. CIMA engages trade union monitors to follow up on cases of non-compliance and to bring proceedings, where required.

The National Employment Rights Authority, NERA, carried out 395 inspections in the construction sector in 2009. Among businesses inspected, a compliance rate of 45% was recorded and €252,000 in unpaid wages was recovered for workers.

Enforcement of the provisions of an REA may also be effected by direct complaint to the Labour Court. A trade union may complain to the latter that a particular employer is not complying with an REA. If, after investigating a complaint, the court is satisfied that an employer is in breach of an REA, it may, by order, direct compliance with the agreement. Failure to comply with such an order is an offence punishable by a fine. In this context, a total of 108 employers in the construction sector were referred by NERA for prosecution in 2009.

These safeguards are in place to ensure the satisfactory operation of the pension schemes. They are also designed to ensure non-compliant employers are discovered and do not benefit in any way from their avoidance of their obligations. Information relating to REAs is disseminated to employers and workers by way of a wide range of structures and organisations, all of which have an important role to play in ensuring compliance by employers with the pay and conditions requirements in those sectors.

NERA provides information to employers and employees on its website and through its call centre in relation to employment rights and responsibilities generally. This would include responsibilities arising under REAs. It would also include providing detailed advice if requested. Other bodies that play an important role in disseminating information on the terms of the REAs in the sector under discussion include the CIF and IBEC.

The REA system has been the subject of a number of recent legal challenges that have come before the High Court. Senator Doherty referred to a number of these. As well as raising issues specific to particular REAs, these challenges also related to the constitutional propriety of the legislative provisions under which they were made. In this context, the Industrial Relations (Amendment) Bill 2009, which has passed all Stages in this House and is currently awaiting Committee Stage in the Dáil, will provide for a number of amendments to the existing legislative framework surrounding the REA and joint labour committee, JLC, systems, including that REAs will be given legal effect in future by ministerial order and that a perceived gap in the scope of parliamentary supervision will be filled by providing for Oireachtas scrutiny of these instruments.

All construction related projects involving public expenditure must conform to Department of Finance public procurement procedures. These procedures state that contracting firms, including subcontractors, must be compliant with all statutory legislation, including REAs, when engaged on public works contract. It is in this way that the level playing field to which I refer is created.

The standard public works contract between a contractor and procuring authority requires the former to undertake to ensure the wage rates and other terms and conditions for all workers comply with the relevant REA. I will raise the specific issue to which the Senator refers in this regard with the Tánaiste and Minister for Education and Skills. Furthermore, the contractor is obliged, for the purposes of the reporting requirements during the course of the contract, to make a statement to the contracting authority certifying compliance with employment rights legislation in respect of each payment due under the contract.

If an employer is aware of specific instances where public contracts have been awarded to firms that are not paying their workers their legal entitlements, the matter can be investigated through NERA, the Labour Court under the Industrial Relations Act 1969 or the relevant public authority that awarded the contract in the first instance.

In December of last year, the Tánaiste and then Minister for Enterprise, Trade and Employment received the report of the inquiry that she had established to investigate the dispute that arose between the Technical Engineering and Electrical Union, TEEU, and employers in the electrical contracting industry regarding the status of the REA which applies in that sector. Peter Cassells and Finbarr Flood addressed issues of enforcement and compliance in their report and jointly recommended that the Departments of Finance and the Environment, Heritage and Local Government should ensure those sections of the public works contract which oblige contractors engaged in public contracts to observe the terms of the REA are more rigorously enforced by public authorities, including local authorities. In particular, they highlighted the need to develop a more rigorous system of enforcement in respect of firms from other jurisdictions, including the Six Counties, which undertake short-term assignments in this jurisdiction. The Department of Enterprise, Trade and Innovation has taken up this issue with the relevant authorities and is also hoping to foster a renewed spirit of co-operation between the trade union and employer bodies in that regard.

I again thank Senator Doherty for his ongoing interest in this matter. I will correspond directly with the Tánaiste and Minister for Education and Skills on the specific issue relating to Pobalscoil Ghaoth Dobhair and revert to the Senator in respect of it at a later date.

Pearse Doherty (Sinn Fein)
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I thank the Minister of State for what is probably the most comprehensive response I have received in respect of a matter I have raised since I became a Member of the Seanad. I also thank him for his commitment to raise the specific issue with the Tánaiste and Minister for Education and Skills. He addressed the general issue in a very clear manner and I would appreciate it if he could avail of the opportunity to follow up on the specific matter.