THE LABOUR Court has rejected a proposal by the Construction Industry Federation (CIF) that the official pay rates for workers in the building sector should be reduced by 10 per cent.
Pay scales for tens of thousands of construction workers are set out in a registered agreement between unions and employers which is lodged with the court.
The CIF rejected the national wage agreement reached last autumn and argued that, given the downturn, in particular in the building sector, the rates should be reduced by 10 per cent.
Trade unions sought the increases under the agreement, 3.5 per cent in the first phase, to be applied to the official rates.
The construction industry committee of the Irish Congress of Trade Unions (Ictu) argued in the Labour Court that the increases would not affect competitiveness. It also contended the survival of the sector required measures such as improving access to credit rather than pay cuts.
The CIF said falling interest rates and deflation had resulted in such a dramatic reduction in the cost of living that a pay cut and not an increase was warranted. It also argued the Registered Employment Agreement (REA) was an “anachronistic and inflexible restriction on the construction industry”.
However in its ruling, published yesterday, the Labour Court said that during the property boom the official registered employment agreement rates “tended to operate as a floor rather than a ceiling”.
“This is borne out by the CSO quarterly statistics on average earnings and hours worked which reveal that in early 2008, the hourly rate for skilled workers in the construction industry stood at €21.28 per hour for an average 43.3-hour week, compared with the REA craft rate which was €18.60 per hour”.
“The figure supplied to the court for the whole of 2008, when rates had begun to drop, was €20.91 per hour. This was still 12.4 per cent above the REA rate,” the court said. It said that as industry contracts and pay rates dropped – which both employers and unions agreed was happening – they would logically bottom out at or near the official REA rates.
“Given the amount by which the market will naturally reduce the rates, the court does not feel that a further reduction, as claimed by the CIF, is justified nor would it necessarily, of itself, create or maintain employment in the industry.
The court does not, therefore, recommend concession of the CIF’s claim.”
Siptu national organiser Noel Dowling said the recommendation vindicated the Ictu’s position.