FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 32, INDUSTRIAL RELATIONS ACT, 1946 TO 2012 PARTIES : KAVANAGH CRANE HIRE LIMITED (REPRESENTED BY O'DOHERTY WARREN & ASSOCIATES) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Doyle Worker Member: Ms Tanham |
1. Construction Industry Registered Employment Agreement - Wages and Conditions of Employment.
BACKGROUND:
2. This complaint, which is made pursuant to Section 32 of the Industrial Relation Act, 1946, claiming that the Company is in breach of the Construction Industry Registered Agreement, was referred by the Union to the Labour Court on 29th August, 2011.
DECISION:
This is a complaint by the Services Industrial Professional and Technical Union (SIPTU) of the Construction Industry Registered Employment Agreement (“the REA”) made pursuant to Section 32 of the Industrial Relations Act 1946, as amended.
The substance of the complaint is that the Respondent Company has failed or neglected to comply with the said Agreement in respect of pay rates, country money, overtime premia and holiday pay in respect of 32 named employees, this was later amended to 22 employees.
Inherent in the complaint is a contention that the Respondent Company is a “Building or Civil Engineering firm” within the meaning ascribed to that term by the REA. The Respondent contends that it is not such a firm.
The Union maintained that the Respondent Company is a specialist sub-contractor to whom the REA applies. Specifically, it submitted that the Respondent is involved in the activities detailed in the Second Schedule of the REA and it undertakes work under contract to main or principal contractors. The Union held that the work in which the Respondent is engaged in is an essential and indissociable part of the construction of buildings or the execution of civil engineering works.
It was submitted on the Respondent’s behalf that the Company’s principal business is the hiring of its cranes with crane operators/drivers to clients. While it subcontracts its services to building or civil engineering firms, is not one itself. However, it submitted that as the number of contracts available from clients in the construction and civil engineering sectors has collapsed, the Respondent is now far more reliant on other types of contract becoming available. The Respondent accepted that a number of its employees do, on a relatively regular basis, undertake work as crane operators or banksmen, which falls within the scope of the meaning of “construction operatives” for the purposes of the REA and it has agreed contracts with its employees terms which are largely in line with or more valuable than those required under the REA. Furthermore, the Respondent confirmed for the Court that when employed on construction sites as a sub-contractor it fully complies with the terms of the REA, in accordance with Clause 10 of the REA.
Clause 10 of the Agreement places obligations on principal contractors in respect to the engagement by them of sub-contractors.
Findings of the Court:
Based on the information supplied to it, the Court is satisfied that the principal business of the Respondent is the hire of cranes to various sectors of the economy. Consequently, it is not a Building or Civil Engineering firm itself but rather sub contracts services to them.
This Court considered the issue of enforceability of the REA against contractors in the caseBoles Hire Limited v A Worker INT115where it held as follows:-
- "The development of subcontracting in these sectors has been a hallmark of the manner in which these industries have organised 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: -- (a)They must comply with the terms of the Registered Employment Agreements for the industry.
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.”
Determination of the Court
The Court has 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 sub-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.
On that basis, the Court determines that the Union's complaint is not well-founded.
Signed on behalf of the Labour Court
Caroline Jenkinson
24th January, 2013______________________
JMcCDeputy Chairman
NOTE
Enquiries concerning this Decision should be addressed to Jonathan McCabe, Court Secretary.