INT1016

FULL RECOMMENDATION

CD/10/350

DECISIONNO.INT1016

INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 33(1), INDUSTRIAL RELATIONS ACT, 1946

PARTIES :

PERMAFIX SOLUTIONS LTD
(REPRESENTED BY PENINSULA BUSINESS SERVICES (IRELAND) LIMITED)

- AND -

NERA

DIVISION :

Chairman: Mr Duffy
Employer Member: Mr Doherty
Worker Member: Mr O'Neill

SUBJECT:
1. Interpretation of a Registered Employment Agreement

BACKGROUND:

2. The case before the Court concerns a dispute between Permafix Solutions Limited, represented by Peninsula Business Services (Ireland) Limited and the National Employment Rights Authority (NERA) in relation to the application of the Construction Industry Registered Employment Agreement (REA), Wages and Conditions of Employment. The Company's representative contends that the Company is not bound by the REA applicable to the Construction Industry as they do not come within the Class of Workers to which the agreement applies, either to a Construction Operative or under the Second Schedule of the REA which covers the definition of a Building Firm. The Company maintains that it is not a construction company and it specialises primarily in providing "fire stopping" services to clients within the Construction Industry, however this requires no construction of any nature.

NERA, following an inspection of the Company, contend that the Company carried out work within the scope of the REA and employed its workers in circumstances that entitle them to statutory minimum rates of pay and other applicable statutory terms and conditions of employment.

The Company's representative submitted a request for Interpretation of the REA on April 29th, 2010 in accordance with Section 33(1) of the Industrial Relations Act, 1946. A Labour Court hearing took place on August 13th, 2010.

The following is the Court's Decision:

DECISION:

This is an application by Permanfix Construction Solutions Ltd (hereafter the Applicant), made pursuant to s.33(1) of the Industrial Relations Act 1946, seeking the decision of the Court on whether the Registered Employment Agreement for the Construction Industry (Wages and Conditions of Employment) (hereafter the REA) is applicable to the applicant and its employees.

Background

The Applicant is involved in the provision of passive fire protection services in the Construction Industry. The work consists of compressing a fire-related material into a service penetration in the floors and walls of structures during construction or applying an industrial coating of intumescent paint to steel framed structures. The National Employment Rights Authority (NERA) conducted an inspection of the applicants records as part of its function of monitoring compliance with statutory minimum employment terms. NERA formed the view that the Applicant was a Building Firm within the meaning of the Second Schedule of the REA and that it was not complying with the terms of the Agreement. The Applicant does not accept that it is a ‘Building Firm’ as defined by the REA. Nor does it accept that its employees are either Construction Craftsmen or Construction Operatives to which the REA relates.

Conclusions of the Court

The second schedule of the REA defines a building firm as : -

“a firm the principal business of which is one or a combination of any of the following activities;

(a) The construction, reconstruction, alteration, repair, painting, decoration, fitting of glass in buildings, and the demolition of buildings;(b) The installation, alteration, fitting, repair, painting, decoration, maintenance and demolition in any building, or its site, of articles, fittings, pipes, containers, tubes, wires or instruments (including central heating apparatus, machinery and fuel containers connected thereto) for the heating, lighting, power or water supply of such buildings;(c) (i) The clearing and laying out of sites for buildings.

- (ii) The construction of foundations on such sites.
  
  (iii) The construction, reconstruction, repair and maintenance within such sites of all sewers, drains and other works for use in connection with sanitation of buildings and the disposal of waste.
  
  (iv) The construction, reconstruction, repair and maintenance on such sites of boundary walls, railings and fences for the use, protection or ornamentation of buildings.
  - (v) The making of roads and paths within the boundaries of such sites.
- (d) The manufacture, alteration, fitting, and repair of articles of worked stone (including rough punched granite and stone), granite, marble, slate and plaster.

In interpreting the REA the Court must be conscious that the Agreement is primarily an industrial relations instrument which was drafted by industrial relations practitioners for the guidance of employers, employees and trade unions. Consequently the interpretation of the Agreement should not be approached as if it were a statute or the product of legal draftsmanship. Rather, the language of the Agreement should be construed by applying to it a meaning which it would normally bear amongst those having a knowledge of the Construction Industry. Furthermore, in considering questions such as this the Court, as an expert tribunal, is entitled to rely on the knowledge and experience of its members. This was recently confirmed by the High Court inBunclody Electrical Contracting Ltd & Ors v Labour Court & OrsUnreported, High Court, Hedigan J 30th June 2010.

Further, it is clear from the judgment of Flood J. inNational Union of Security Employers v. Labour Court[1994] 10 JISLL 97 that the overall purpose of a Registered Employment Agreement is to create harmony within the industry to which it relates, as a whole. The Judge also pointed out that such agreements are intended to bind all persons within the industry. That dictum was subsequently adopted, in relation to the Construction REA, inBuilding and Allied Trades Union v Labour Court & Ors, (Unreported, High Court, Murphy J. 15th April 2005).

These considerations dictate that the Court should adopt a purposive approach to the interpretation of the REA so as to achieve the objective which its framers intended to pursue. That objective is clearly to regulate the terms and conditions of workers within the Construction Industry as a whole. Like any other industrial sector, the range of activities that can properly be regarded as forming a part of the Construction Industry is continuously evolving. It is to be assumed that the framers of the REA intended their Agreement to be interpreted in a way that reflects that evolution. Moreover, paragraph (a) of the definition of a ‘building firm’ is expressed in sufficiently broad terms so as to cover the changing range of activity that can properly be regarded as forming an essential part of the process of constructing buildings.

The Court was told that the provision of fire protection is now a requirement of the Building Regulation in respect to certain buildings and is a condition of planning permission for such buildings. The Court was also told that the applicant carries out this work pursuant to a standard Building Contract and that the work is regarded as a ‘building operation’ within the meaning of s.530 of the Taxes Consolidation Act 1997. In consequence the Applicant is a construction industry sub-contractor within the meaning of s.531(1)(d) of the 1997 Act and is registered with the Revenue Commissioners as such.

The Court is satisfied that fireproofing of buildings is now an integral and inalienable part of the process of constructing the buildings to which it is applied and it has no utility or value other than as part of that process. Without it the building could not be lawfully occupied for the purpose for which it is intended and it could not be regards as complete.

Decision of the Court

For all of these reasons the Court is satisfied that the Applicant’s principal business involves the construction of buildings and it is a building firm within the meaning of the REA. It follows that the workers employed by the Applicant come within the class type or group to which the REA relates. Having regard to the nature of the work performed, those workers are either classifiable as Construction Operatives or Painters. The REA itself provides a mechanism for resolving disputes between workers and their employers, including disputes concerning grading. In the Court’s view that dispute resolution procedure should be utilised to resolve any dispute concerning the appropriate grading of the workers concerned.

Signed on behalf of the Labour Court

Kevin Duffy
19th August 2010______________________
SCChairman

NOTE

Enquiries concerning this Decision should be addressed to Sharon Cahill, Court Secretary.