INT1020

Background

The Applicant is involved in haulage and transport, sale of stone and other materials, plant and truck hire and grounds and excavation works. The National Employment Rights Authority (NERA) conducted an inspection of the Applicant’s records as part of its function of monitoring compliance with statutory minimum employment terms. NERA formed the view that the Applicant was a ‘Civil Engineering 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 ‘Civil Engineering Firm’ as defined by the REA. Nor does it accept that its employees are Construction Operatives to which the REA relates.

Meaning of ‘Building or Civil Engineering Firm’

The REA applies to workers employed by building and civil engineering firms. 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;

• (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.
  

• “[A]n undertaking the principal business of which is one, or a combination of any of the following activities: -
  • (a) the construction, reconstruction, alteration, repair, painting, decoration and demolition of : -

• • • • roads, paths, kerbs bridges, viaducts, aqueducts, harbours, docks, wharves, piers, quays, promenades, landing places, sea defences, airports, canals, waterworks, reservoirs, filter beds, works for the production of gas or electricity, sewerage and all work in connection with building their sites and mains;

• • • • rivers works, dams, weirs, embankments, breakwaters, moles, works for the purpose of road drainage or the prevention of coastal erosion;

• • • • cattle markets, fair grounds, sports grounds, playgrounds, tennis-courts, ball alleys, swimming pools, public baths, bathing places in concrete, stone tarmacadam, asphalt or like material, any boundary walls, railings, fences and shelters erected thereon.

Position of the parties

The Court was told that its principal activities are haulage and transport. It chiefly hauls goods such as quarried rock, sand, site waste, top soil, sub soil and farming goods however, it is not limited to construction material. Its chief assets are its thirty-two trucks. In addition to hauling goods at a per tonne rate, it also hires out its trucks with a driver. On behalf of the Applicant it was contended that the fact that the Company is also engaged in the sale of stone and other materials and in plant and truck hire and that a small percentage of its business involves the construction of roads, however this does not displace haulage and transportation as its principal business.

The Memorandum of Association states that the object for which the company was established was“…to carry on business as transport, haulage and removals contractors….”. Nine of its drivers are exclusively truck drivers while 3 other drivers are both truck drivers and operate other machinery undertaking groundworks and site excavation. The majority of its turnover (62.31%) is derived from haulage and truck hire contracts. Coshla Quarries hires out the majority of its plant and machinery (excluding truck hire). Coshla Quarries is part owned by the Applicant’s principal shareholder. Two of the Applicant’s workers permanently work in the quarry.

On behalf of the Applicant the Court was told that groundworks and excavation accounted for 18.93% of the Company’s overall business. This work is offered as an ancillary add on to secure haulage business and to expand the company’s customer base. It does not enter into a contract solely for the groundwork/excavation contract. It does not tender for business where haulage is not included. There are currently 12 workers involved to some degree in civil engineering works, including one Foreman, an Engineer and a Quantity Surveyor. When not involved on groundworks/excavation they are employed to work in the quarry.

Since the completion of the N6 road, the Company has reduced its workforce significantly, 33 exclusive truck drivers were let go since January 2009. They had been employed to attend at the N6 site with rock and soil transported from a quarry and returned to the quarry with excavated material for tipping. This work was a major source of the haulage business for the previous 4 years.

The Applicant cited previous decisions of this Court to support the proposition that where more than half of a firm’s overall costs relate to off-site activity it is not encompassed by the REA.

On behalf of NERA, the Court’s attention was drawn to the Company’s Abridged Financial Statement for years ending 31st August 2008 and 2009 submitted to the Central Registration Office where the director’s Report states:

• • “The Company is engaged in the provision of all Civil Engineering Services together with Plant Hire, Haulage and Excavation Services. The Company performs a mixture of contracts each year from the large contracts in excess of a million euro to small site excavations for a thousand euro. The number of large contracts secured in the past three years has been the main reason for the growth in the company’s business. The Directors have no plans to make any material changes to its operations in the foreseeable future.”

Conclusions of the Court

In asserting that its business was not encompassed by the REA, the Respondent placed considerable emphasis on the breakdown of its turnover between haulage/ truck & plant hire, quarry works and it’s on site groundworks/excavation work. The Court has found previously (PHI Ireland LimitedINT1018) that apportionment of a firm’s costs/turnover between on site and off site activity cannot be regarded as the sole or determinative criterion in deciding if it is covered by the REA.

The REA is an employment agreement made between the CIF and a number of named Trade Unions of workers and was concluded for the purpose of ensuring that all workers in the Construction Industry were treated in the same way in terms of rates of pay and conditions of employment thus maintaining a level playing field amongst employers in the industry.

The REA was written not by lawyers but by industrial relations practitioners. It is addressed to building employers, workers and their trade unions. Its purpose is clear and there can be no doubt that the parties to the agreement intended it to have general application in the industry. It is an employment agreement between parties and should be construed in accordance with the rules normally applied in the interpretation of collective agreements (see Decisions of this Court inCK Decorators, REA072 andHoran HomesREA06120).

The REA relates to a “firm” not a company. In considering if the Respondent is a building or civil engineeringfirmwithin the meaning ascribed to that term by the REA, the Court needs to consider what the intention of the parties to the REA was and ascribed a meaning that comports with that intention. As the Court found inHoran Homesthe word “firm” must be understood in its colloquial meaning as referring to a business or enterprise.

Based on the information provided for the Court, it appears that the Applicant’s groundworks/excavation activities form a substantial and dedicated business unit within the company which can properly be described as “a firm” for the purposes of determining the applicability of the REA, and one which the company fully intends to be a long term aspect of the business. An analysis of the turnover figures presented to the Court demonstrate that the construction related haulage/groundwork/excavation work undertaken by the Applicant in the three year period September 2007 to August 2010 accounted for just over 50% of its turnover, and for the two years from September 2008 to August 2010 accounted for just over 70% of its turnover. Based on these figures the Court is satisfied that the contracts secured by the Applicant in recent years to carry out construction related haulage/groundworks/excavation activities comprises a substantial part of that business and therefore reflects the nature of the work in which a number of the employees are engaged.

Furthermore, the Applicant owns a substantial amount of diggers and equipment required for groundworks/excavation work, which are detailed in the Company’s 2009 accounts as constituting over 65% of its fixed assets, whereas motor vehicles constitute 29% of fixed assets. In its annual returns it reported that it is engaged in the provision ofall Civil Engineering Services(emphasis added) together with plant hire, haulage and excavation services and that the number of large site clearance projects contracts secured in the past three years has been the main reason for the growth in it’s business.

Determination

For all of these reasons the Court is satisfied that the Applicant herein is a civil engineering firm within the meaning of the REA and therefore the REA is applicable to those workers who come within its scope.

Signed on behalf of the Labour Court



Caroline Jenkinson
2nd December 2010______________________
AHDeputy Chairman



NOTE

Enquiries concerning this Decision should be addressed to Andrew Heavey, Court Secretary.