Complainant

Respondent

Anonymised Parties

A Bricklayer

A Construction Sub-contractor

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 23 of the Industrial Relations (Amendment) Act, 2015

CA-00028704-001

28/05/2019

As a bricklayer working in the construction sector, the complainant’s terms and conditions of employment are governed by the provisions of Statutory Instrument 455 of 2017, the Sectoral Employment Order for the Construction Sector (SEO).   This came into effect on October 19th 2017. By ministerial order, the SEO makes mandatory the rates of pay and terms and conditions proposed by the Labour Court for workers in the construction sector.   The Labour Court arrived at these proposals following consultation with the Construction Industry Federation and the unions representing workers.

The complainant’s case is that, in breach of the SEO, for most of the time that he was employed by him, the respondent did not pay a pension contribution to the Construction Workers Pension Scheme (CWPS) on his behalf and he did not contribute to the illness benefit scheme or the death in service scheme.

Having worked as a sub-contractor for a number of weeks, the complainant became a direct employee of the respondent on January 22nd 2018. He was laid off on May 10th 2019 and he did not return to work with this employer.

Mr Smith said that the union has an agreement with the respondent that bricklayers who work for him will be paid-up members of the CWPS. Copies of two separate agreements related to two construction sites were submitted in evidence at the hearing. The first of these is dated May 30th 2017 and the second is dated November 11th 2017. These agreements show that the respondent has confirmed the following:

1. Staff will be employed on a PAYE basis;

2. They will be paid no less than the minimum rate of pay set out in the old Construction Industry Registered Employment Agreement or no less than the minimum rates that may be contained in any future SEO for the construction industry;

3. They will be registered with the CWPS or an alternative scheme that is no less favourable;

4. They will be paid-up members of the Building and Allied Trades Union (BATU).

Around January 2019, the complainant informed the union that pension contributions were not being paid for him and personal contributions were not being deducted from his wages. In February 2019, Mr Smith said that he contacted the respondent who then agreed to pay the pension contributions of the complainant and his colleagues who were working on a site in Dundrum. The contributions were to be back-dated for 13 weeks. At the hearing, the complainant had a copy of his pension statement dated October 21st 2019 which shows that the respondent paid 12 weeks’ contributions in 2019. No contributions were made in 2018.

The union’s case is that pension contributions, sick pay and death in service benefits are critical elements of the terms and conditions for workers in the construction sector. Employees are legally entitled to these benefits and the failure to provide them places a strain on employees and their families and is also damaging to the employment relationship. Mr Smith said that when the complainant persisted with his enquiries concerning pension and sick pay, he was moved to another site, and eventually, in May 2019, he was laid off.

At the hearing, the respondent provided some background regarding the constraints that his company works under and the challenges to meet his legal obligations in a difficult pricing market. He said that he issued a contract of employment to the complainant which specifically provides that he is not entitled to membership of a pension scheme.   A copy of the contract was included in the documents submitted by the respondent in advance of the hearing.

The respondent said that he was not aware that in October 2017, a new SEO made it mandatory for employers to pay pension and sick pay contributions. He said that, in the past, membership of a pension scheme was voluntary. Although he has more than 50 employees on his books, he said that he got no information regarding the SEO and he only became aware that he had to make pension and contributions for his employees in February 2019. When the issue was brought to his attention, he phoned the Construction Industry Federation and he was informed that pension contributions were not being enforced. He said that the main contractor on the site where the complainant was working agreed to pay pension contributions for his workers from then on until the job was finished. In an email sent to me on October 31st, following the hearing of this complaint, the respondent said that at the end of the job, he “let all PAYE lads go because it is just not possible to pay this.”

Attached to the October 31st correspondence is an email from “cwpsteam2” dated October 30th 2019. This email, which is unsigned, states as follows:

“Hiba (sic) following our conversation please find this email a confirmation that (name of complainant) was paid the following weeks to CWPS:

February - 3 weeks

March - 5 weeks

April – 4 weeks

Total 12 weeks”

As the respondent pointed out at the hearing, clause 12 of the complainant’s contract of employment, states that:

“The employee is not entitled to access to any pension scheme.”

Although the complainant and his employer signed this contract, the right to contribute to a pension fund is a legal entitlement under Part 2 of the Pensions (Amendment) Act 2002.   This entitlement is unaffected by any provision in a contract of employment.

The terms of the pension scheme agreed between the Construction Industry Federation and the construction trade unions is at Appendix 1 of the 2017 SEO. This Order came into force on October 19th 2017 and it provides that, for employees whose employment is governed by the SEO, a minimum contribution of €26.63 is to be paid every week by an employer, with the employee contributing €17.76.

In addition to the pension benefits, employers are required to submit €1.11 each week to the CWPS in respect of death in service benefits, with employees paying the same amount.

In respect of sickness benefits, the SEO provides that employers are to pay €1.27 per week and employees are to contribute 63 cents per week to the Construction Industry Sick Pay Scheme, a total contribution of €1.90 per week.

The complainant worked for the respondent for 48 weeks in 2018 and for 18 weeks in 2019, a total of 66 weeks. The evidence provided by the complainant at the hearing shows that employer and employee pension contributions were paid for 12 weeks, during the months of February, March and April 2019. The amounts submitted were:

February: 3 weeks x €44.39 = €177.56

March: 5 weeks x €44.39 = €221.95

April: 3 weeks x €44.39 = €133.17

The Construction Workers’ Pension Scheme is a long-established and reputable pension scheme and its purpose is to enhance the income of workers in the sector in their retirement, and to facilitate employers so that they do not have to set up their own schemes. The cost to an employer of sickness benefit and death in service benefit is €2.38 per week, a tiny sum compared to the value of the benefit that may have to be drawn on by an injured worker or their family.

From the evidence submitted at the hearing and, based on the additional information provided by the respondent afterwards, it is apparent that pension contributions were paid to the CWPS for this complainant for 12 out of the 66 weeks of his employment. It appears that no contributions whatsoever were paid in respect of death in service or illness benefits. I have calculated the payments that should have been remitted on behalf of this complainant and I have arrived at the following conclusions:

Employer’s Contributions

Employee’s Contributions

Pension

(54 weeks x €26.63)

€1,438.02

(54 weeks x €17.76)

€959.04

Death in service

(66 weeks x €1.11)

€73.26

(66 weeks x €1.11)

€73.26

Sickness benefit

(66 weeks x €1.27)

€83.82

(66 weeks x 63 cents)

€41.58

Total

€1,595.10

€1,073.88

I have concluded that the complaints regarding the non-payment of pension, death in service and sick pay contributions are upheld. I decide therefore that, the respondent is to pay to the CWPS, for the benefit of the complainant, €1,595.10 in respect of unpaid employer’s contributions and €1,073.88, equivalent to the employee’s contributions, as compensation for failing to remit these payments when they were due.

Sectoral employment order, pension contributions, sick pay benefit, death in service benefit