FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 33(1), INDUSTRIAL RELATIONS ACT, 1946 PARTIES : BOLES HIRE LTD (REPRESENTED BY STEEN REILLY SOLICITORS) - AND - A WORKER (REPRESENTED BY MEATH CITIZENS INFORMATION CENTRE) DIVISION : Chairman: Mr Hayes Employer Member: Ms Doyle Worker Member: Mr Shanahan |
1. Interpretation of the Construction Industry Registered Employment Agreement (Wages and Conditions of Employment)
BACKGROUND:
2. This case concerns a dispute between the Company and worker in relation to whether the Registered Employment Agreement (REA) for the Construction Industry (terms and conditions of employment) applies to the worker in the instant case. The worker contends that he is covered by the agreement and sould receive the terms and conditions of employment as provided for in the Agreement on the basis that he was employed as a driver and assigned to a building site for the most of his employment with the Company. He further contends that if he was not required to carry out driving duties at a given time, he reported to the site foreman and was required to carry out other general operative tasks.
Management's position is that he was employed by them as a driver but their business is not predominantly that of a building or civil engineering firm as provided for under the REA. Management further contend that the worker was solely employed by them to undertake driving duties and had no obligation to report to the site foreman or to carry out additional duties.
The matter was referred to to the Labour Court for a decision under Section 33(1) of the Industrial Relations Act, 1946 as to whether the REA applies to the Company and the worker. A Labour Court hearing took place on 23rd May 2011. The following is the Court's Decision
DECISION:
The case comes before the Court pursuant to Section 33(1) of the Industrial Relations Act 1946.
Section 33(1) provides
33.—(1) The Court may at any time, on the application of any person, give its decision on any question as to the interpretation of a registered employment agreement or its application to a particular person.
The Court is asked by the applicant to give its decision as to whether the Registered Employment Agreement for the Construction applies in this case.
The Registered Agreement applies to particular categories of workers employed by Building and Civil Engineering firms.
The Agreement applies to the following classes of worker
- CLASS OF WORKERS TO WHICH THIS AGREEMENT APPLIES
This Agreement applies to workers who are employed in one of the undermentioned capacities, by Building or Civil Engineering Firms (see Second Schedule to the Agreement for the definition of “Building or Civil Engineering firmsâ€)
(a) Construction Craftsmen:
Bricklayers, Stonelayers
Carpenters and Joiners
Floorlayers (Dublin County Borough and County and Bray
Urban District)
Glaziers
Painters
Plasterers
Plumbers
Slaters and Tilers
Stonecutters
Woodcutting Machinists
and Apprentices to the foregoing craftsmen.(b) Construction Operatives.
- SECOND SCHEDULE (see Clause 2)
1. For the purpose of this Agreement a building firm means an undertaking the principal business of which is one or a combination of any of the following activities:-
(a) the construction, reconstruction, alteration, repair, painting,
decorating, fitting of glass in buildings and 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 of 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 building or 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.
2. For the purpose of this Agreement a Civil Engineering firm means
an 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 works, public mains for the
supply of water or the disposal of sewerage and all work in connection
with buildings and their sites with such mains;
rivers works, dams, weirs, embankments, breakwaters, moles, works
for the purpose of road drainage or the prevention of coastal erosion;
cattlemarkets, fair grounds, sports grounds, playgrounds, tennis-courts,
ball alleys, swimming pools, public baths, bathing places in concrete,
stone tarmacadam, asphalt or such like material, any boundary walls,
railings, fences and shelters erected thereon;
(b) the painting or decoration of poles, masts, standard pylons for
telephone, telegraph, radio communication and broadcasting; and
(c) ground levelling, ground formation or drainage in connection with
the construction or reconstruction of grass sports grounds, public parks,
playing fields, tennis-courts, golf links, play-grounds, racecourses and
greyhound racing tracks, but excluding the sowing of grass seed
on such grounds.
In order to facilitate labour specialization along with high levels of efficiency and flexible contract delivery the parties to the REA made provision for the engagement of “Sub Contractors†by Building and Civil Engineering firms that are party to the Agreement.
The relevant provision of the agreement provides
ENGAGEMENT OF SUB-CONTRACTORS
The parties agree that contractors and sub-contractors covered by the Registered Employment Agreement for the Construction Industry should be free to engage approved contractors in any trade or activity in the industry.
For the purpose of this agreement, approved sub-contractors are defined as follows: -
(a) They must comply with the terms of the Registered Employment Agreements for the industry.
(b) They must employ the appropriate grades of trade union labour.
(c) They must supply material as well as labour in those sectors of the industry
where this has been normal practice.
(d) They must comply with the Social Welfare Acts and Section 17 of the
Finance Act, 1970 as amended by the Finance Act, 1995 and they must
conform to the guidelines issued by the Revenue Commissioners under the
Finance Act, 1995.
(e) They must maintain a safe and healthy environment and comply with the
provisions of the Safety in Industry Act, 1990.
(f) They must carry employers’ liability insurance in respect of their employees and the work in which they are engaged unless this cover is provided by the main contractor or the client.
(g) They must employ appropriate numbers of apprentices relative to the
number of craft workers employed.
(h) They must, if in a labour only category, give security in a manner to be
determined from time to time by the NJIC for the Construction Industry
against default in respect of any liabilities they may have to employees.
It is clear that this provision is intended to ensure that the employment of sub-contractors does not undermine the pay and conditions of directly employed labour or put a Building or Civil Engineering firm that organises affairs in this way at a cost advantage to those that employ direct labour.
Furthermore, because the Agreement is only enforceable against firms whose principle business is that of a Building or Civil Engineering firm, the Agreement makes provision for the Sub Contractor Clause to be enforced against the main contractor in respect of construction workers employed by a sub contractor that is not itself a Building or Civil Engineering firm.
Factual Background:
The facts in this case are not in dispute. The complainant worked, when work was available, as a driver on the respondent’s machinery commencing in August 2005 until his employment terminated in August 2009. The machinery and driver were hired out to various building and or civil engineering firms over that time. During his employment with the respondent he invariably worked on construction or civil engineering sites.
On this basis the applicant is asking the Court to determine that the terms of the REA applied in his cases.
Respondent’s Case
The respondent contends that the applicant is not a construction operative within the meaning of that term in the REA.
It further contends that it is neither a “Building†nor a “Civil Engineering†Firm within the meaning of those terms within the REA.
It submitted that its principal activity is the sale and hire of plant and machinery to various sectors of the economy. The hiring of machinery with a driver to the construction sector accounts for a very small proportion of its activity by reference to turnover.
The respondent in support of its position submitted to the Court the following information on the composition of its % turnover in respect of the years 2006 - 2010.
 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Sale of Plant | | | 33 | 52 | 36 |
| Hire of machinery | 31 | 59 | 40 | 26 | 57 |
| Hire of Plant | 38 | 16 | 7 | 6 | |
| Hire of Machine with Driver | 16 | 20 | 16 | 13 | |
| Container | 0 | 0 | 0 | 0 | |
| Machine Repair | 14 | 5 | 4 | 2 | 7 |
| | | | | |
On the basis of this information and the nature of the work in which it is engaged, the respondent contends that it cannot be regarded as a firm whose principal activity is that of a “Building or Civil Engineering†firm within the meaning of the REA.
Findings of the Court:
The Court is satisfied that the applicant is a class of worker to which the REA applies. He was employed by the respondent to drive machinery on various building and civil engineering projects and was utilised on other construction work when the machinery was not required or was awaiting repair. Consequently the Court finds that he is a Construction Operative within the meaning of the REA.
The second issue for the Court to determine is whether the applicant was employed by a Building or Civil Engineering Firms within the meaning of that term in the REA.
In interpreting the REA the Court must be conscious that the Agreement is primarily an industrial relations instrument 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 it would normally bear in the conduct of industrial relations so as to achieve the result envisaged by the parties to the Agreement. That approach finds support in S33 (3) of the Act, which allows a Court of Law to defer to this Court for a definitive interpretation of a Registered Employment Agreement (see DecisionREA 0591 –Mythen Bros and BATU).
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 bythe High CourtinBunclody Electrical Contracting Ltd & Ors v Labour Court & OrsUnreported, High Court, Hedigan J 30th June 2010.
Furthermore it is clear from the judgement of Flood J. in nationalUnion 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).
The REA should be construed purposively so as to achieve the legislative intent identified by the High Court.
In the instant case the REA defines a Building or Civil Engineering firmas “ a firmthe principal businessof whichis oneor a combination ofanyof the following activities†[emphasis added]
Respondent’s Business
The Respondent’s Memorandum Of Association lists the objects for which the company is established as
a) to carry on the business of hiring out teleporters, hire of plant, tools and labour for construction, construction contracts, wholesale, retail and supply of plant and machinery, agricultural contracting, civil engineering, sale and purchase of plant machinery, sale and repair of construction equipment and hardware, general contracting services and anything ancillary.
This is a case in which the respondent claims to be engaged in the provision of a service to, among others, the Building and Civil Engineering industries rather than be engaged directly in those industries. In that regard it subcontracts its services to Building and or Civil engineering firms but is not one itself.
Findings of the Court:
From an analysis of the evidence presented to it the Court is satisfied that the principal business of the Respondent is the sale and hire of plant and equipment to various sectors of the economy. Consequently it is not a Building or Civil Engineering firm itself but rather sub contracts services to them.
Enforceability of the Agreement against Contractors
The development of subcontracting in these sectors has been a hallmark of the manner in which these industries have organized themselves over recent decades. These developments gave rise to the real possibility that the fundamental purpose for which the REA had been established viz. the creation of a common labour cost base in the sector and the protection of pay and terms and conditions of employment to facilitate labour mobility across the industry, would be undermined by the process of specialist contractors replacing directly employed labour on inferior terms and conditions of employment. This gave rise to considerable disharmony within the industry and a significant level of industrial unrest.
The industrial unrest was resolved when the parties agreed to insert a provision dealing with the engagement of specialist contractors into the Agreement.
Clause 10 above was inserted into the REA in 2006 to address these developments.
Clause 10 provides
- The parties agree that contractors and sub-contractors covered by the Registered Employment Agreement for the Construction Industry should be free to engage approved contractors in any trade or activity in the industry.
For the purpose of this agreement, approved sub-contractors are defined as follows: -
The Clause goes on to list a number of other conditions that must be met by “approved contractors†working in the industry.
It is clear that the intention of Clause 10 is to ensure that parties to the agreement will maintain the pay and terms and conditions of employment of workers in the industry irrespective of whether they engage labour directly or otherwise.
The effect of Clause 10 is to place the onus on main contractors when engaging sub contractors, the principal business of which is not Building or Civil Engineering, to ensure that construction workers employed by those firms are paid the same rate of pay and are employed on the same terms and conditions of employment as directly employed construction workers. Thus clause 10 is enforceable against Building and Civil Engineering firms to ensure that they only engage approved sub contractors that comply with the REA. It is not directly enforceable against a sub contractor that is not itself a Building or Civil Engineering firm.
Conclusion:
The Court has found that the applicant is a class of worker to which the REA applies and is entitled to be paid the rate of pay set out in the REA. However the Court has also found that the Respondent Company is not a Building or Civil Engineering Firm within the meaning of Schedule 2 of the Agreement. Rather it is a contractor within the meaning of Clause 10 of the REA. Accordingly the terms of the REA are not enforceable directly against the Respondent but rather against the Building or Civil Engineering firm that contracted with it.
Decision of the Court.
The Court, pursuant to Section 33(1) of the Act, decides that the applicant cannot enforce the agreement against the Respondent Company, as it is not a Building or Civil Engineering firm within the meaning of the Registered Employment Agreement.
The Court so decides.
Signed on behalf of the Labour Court
Brendan Hayes
9th August 2011______________________
AHDeputy Chairman
NOTE
Enquiries concerning this Decision should be addressed to Andrew Heavey, Court Secretary.