Law governing construction pay rates remains pending State appeal

A law governing minimum rates of pay in construction will stay in place pending a State challenge to a High Court ruling that declared it unconstitutional.

In June, Mr Justice Garrett Simons struck down chapter three of the Industrial Relations Act 2015, which allows the government to make sectoral employment orders setting pay and conditions in building and related industries.

Mr Justice Simons last week stayed part of the ruling, relating to the pay and conditions of building workers and plumbers, pending the outcome of an appeal against his finding by the State.

However, he declared that the court order setting aside a sectoral employment order governing pay and conditions for electrical contractors “will be effective immediately”.

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This means that a third sectoral employment order, made last year, setting electricians’ pay at €23.49-€24.34 an hour, depending on service, will not apply to electrical contractors. The employment order also determined the contributions that these workers and their employers should make to a builders’ pension fund.

Former minister of state for employment Pat Breen made the sectoral employment order covering electrical contractors' pay last year on foot of a Labour Court recommendation. This prompted industry body National Electrical Contractors Ireland (NECI), to challenge chapter three of the Industrial Relations Act 2015.

The High Court ruled that this part of the Act allows a minister, rather than the Oireachtas, to make laws. This is contrary to article 15.2.1 of the Constitution, which says that the Oireachtas – the Dáil, Seanad and the president – has the "sole and exclusive" power to make laws for the State. A ruling that a law is unconstitutional means that the law has no effect.

Potential disruption

In an order staying part of his own ruling, Mr Justice Simons indicates that he considered the potential disruption that any finding that a law is unconstitutional could cause.

Consequently he stayed the ruling relating to building workers and plumbers, but declared that the ruling covering electricians should come into effect, as it had been employers in this industry who had challenged the legislation.

The State intends appealing his finding to the Supreme Court, which has the final say on all constitutional issues. If that challenge fails, it will mean that chapter three of the Industrial Relations Act 2015 will have no effect.

Businesses covered by sectoral employment orders face criminal prosecution for failing to abide by their terms.

The judge’s order notes that there is nothing to stop the Oireachtas passing legislation setting minimum pay in any industry, including construction.

NECI members warned that the sectoral employment order setting pay in their industry would result in widespread job losses in their industry as employers unable to pay the rates set by the order would lay off workers.