Subcontractors threaten legal action over non-compliance with wage agreement

A group representing construction subcontractors has threatened that it will seek a judicial review of the State’s construction pay agreement, due to what it claims is “a widespread lack of compliance”.

The Irish Plant Contractors Association (IPCA), which represents many of the subcontracting firms that carry out groundworks on big construction sites, warned that it was preparing to go to the High Court on the matter if there was not immediate action by the Government.

The lobby group has claimed that a chronic lack of enforcement of agreed pay rates and conditions was leading to unfair competition for State and other building contracts – and allowed non-compliant firms to win contracts by paying lower wages, often in cash.

“If no meaningful action is taken by you, we intend to move to abolish the SEO [sectoral employment order] altogether on the grounds of non-implementation/enforcement by way of application to the Commercial High Court for a judicial review,” wrote IPCA chief executive Brian Coogan in recent days to the Department of Enterprise, which oversees the SEO agreement that dictates pay and working conditions across the sector.

“Our members do things properly in terms of paying correct rates to our employees – but many other firms do not, giving them an unfair advantage whilst competing for work on the open market,” claimed Coogan, who also sent the letter to the Workplace Relations Commission (WRC) and the Revenue Commissioners.

​“Many companies operating in the Irish market are not paying current SEO rates to employees, nor are they paying pensions, death-in-service or sick-pay contributions,” he wrote.

The organisation was “increasingly dismayed” by “the lack of action being taken” by the Government.

“Companies continue to flout our laws with impunity in the knowledge that there is little chance of government departments doing much about it,” he wrote.

In his letter, Coogan asked how many firms had been investigated or prosecuted last year for non-compliance with SEO and pensions legislation.

“It is our intention to focus on this problem – and we will not stop until it is addressed and resolved satisfactorily.”

Coogan told the Sunday Independent that he had met with several government officials over the past number of years and voiced his concerns but the IPCA was now preparing to go the legal route.

“The IPCA has for the past few years highlighted the abuses of the SEO in the construction sector.

“The abuses have led to an unlevel playing field for construction subcontractors. I have suggested various options that would bring an end to malpractice within the industry.”

Other sources in the construction industry have also said that cash payments are “rampant” across the sector, and this made it difficult for firms who were compliant with the SEO rules.

The IPCA has previously claimed that subcontractors from across the Border were winning a substantial amount of local authority contracts, despite not adhering to the agreed rates.

It also said that lower pay rates have led to many young construction workers emigrating to countries such as Australia, where construction pay was substantially higher than in Ireland. ​

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