Dominic Hannigan (Meath East, Labour)
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208. To ask the Minister for Public Expenditure and Reform when the Construction Contracts Bill will come into force; and if he will make a statement on the matter. [44297/13]

Dominic Hannigan (Meath East, Labour)
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209. To ask the Minister for Public Expenditure and Reform the amount a contract needs to be worth for it to be covered under the Construction Contracts Bill; and if he will make a statement on the matter. [44298/13]

Brendan Howlin (Wexford, Labour)
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I propose to take Questions Nos. 208 and 209 together.

The Programme for Government contains a commitment to introduce new legislation to protect small building subcontractors that have been denied payments from bigger companies. In this regard, Minister of State Brian Hayes worked closely with Senator Feargal Quinn to develop the Senator’s private member’s Construction Contracts Bill into a robust piece of legislation. I believe that there is considerable support both inside and outside the Dáil for these reforms. The Act which is subject to a Commencement Order, to allow for the development of a comprehensive code of practice, was signed into law on the 29 July 2013.

The key objective of the Construction Contracts Act is to ensure that cash flows down the supply chain on all construction contracts. This issue is addressed in the Act by providing statutory arrangements in relation to payments under construction contracts, including providing for interim payments. This will reduce the subcontractor’s exposure to non-payment. The Bill also provides the means for subcontractors to enforce these rights; by suspending their labour and by introducing a new mechanism for the swift resolution of payment disputes through a process of adjudication.

The Bill applies to contracts with an overall value €10,000 or more. It is important to understand that the amount that is subject to a payment dispute can be lower than this. Therefore subcontractors will be free to refer payment disputes relating to lesser amounts to adjudication. For example if a contract with an overall value of €11,000 gives rise to a payment dispute for €1,000 this will come within the scope of the legislation.

This is an important piece of legislation aimed at creating a more level playing field between contractor and subcontractor in the construction sector. This legislation is a priority for Government. In this regard, my officials are current working on the code of practice that will deliver a timely and cost effective adjudication procedure and to give effect to the legislation.