labour court

doublejj

a company in question was recently brought to labour court in regard to redundancy payment.the court ruled that the employees should be awarded two weeks statand two weeks of average pay(including overtime).the company in question is a multinational plc company,withturnover of over 800million euros per year.the company refuse to pay the court ruling......now i know the labour court is not binding but companys nearly always abide by it....is there anything can be done as more redundancys are coming soon in the same company...workers are disgusted by it esp when the company is making huge profits.....

Electricman999

The Construction Workers Alliance of Ireland

The Construction Workers Alliance of Ireland (CWAI) is an independent

organisation representing all workers in the construction industry, whether
employed or unemployed, union or non‐union.

Background

After more than 40 years, the present review of the wage setting mechanisms is

timely, but we feel that there are a number of issues of serious concern to
workers—and indeed employers—in the construction sector. It is our contention
that failure to address these issues would have serious repercussions for tax
revenue, industrial relations and pension provision.
The REA for the construction industry was introduced in 1969. At that time
seventeen trade unions were signatories to the agreement. Through
disbandment and merger, this is now reduced to seven. Of these seven unions,
three—SIPTU, BATU and UCATT—hold between them 23 of the 37 votes on the
ICTU Construction Industry Committee. These three were the only unions to vote

in favour of the proposed pay cut.1

The REA has been central to maintaining good industrial relations in Ireland

since its inception. To weaken or cancel it would lead immediately to the “race to

the bottom” of which Congress has so often warned.

Potential Conflict of Interest

We feel there is an issue with the choice of Mr Kevin Duffy to chair the review of

the construction REA. We have no problem with his overseeing other industries,
but in this case there is a potential conflict of interest, as he is a former General
Secretary of one of the constituent unions of BATU. BATU has for many years
been opposed to the REA2—indeed in 2005 it lost a judicial review of the REA,
for which a very substantial legal bill is still outstanding. €320,000 of this—
€320,000 of taxpayers’

money—is owed to the Labour Court, under the auspices

of Mr Duffy, who has yet, for whatever reason, to demand settlement.
In April 2008, the General Secretary of BATU contacted Mr Duffy to inform him
that he was withdrawing from the REA.

Union Representation at Congress and CIC

The level of representation at both ICTU and CIC is calculated on the

membership numbers submitted by each union to Congress. We have evidence
that these figures have been routinely inflated. A letter dated 18 November 2010
from Congress requests that affiliates maintain—or increase—the previous
year’s figures. Moreover, at a demonstration organised by CWAI at ICTU’s offices
on 9 February 2011, one delegate admitted—efore witnesses—hat unions had
been lying about their membership numbers for years, and that if they hadn’t
there would be some unions with no representation at Congress at all.
Correspondence between MJ Nolan TD and the Registrar of Friendly Societies

1

See enclosed summary of votes cast at CIC meeting of 15 December 2010

2

See enclosed copy of The Ventilator, Summer 1999, which includes a

recommendation for voting to withdraw from the REA
indicates that at least one of these unions—far from maintaining membership
levels—may not be a functioning union at all, having failed to submit their legally
–required annual returns for several years.3

As if that were not serious enough, there seems to be a rather too cosy

relationship between the unions—as represented by their officials, not their

grass‐root members—nd the employers as represented by the CIF. It
sometimes seems as if they prefer to see themselves as allies in maintaining the

status quo

rather than fighting effectively on behalf of their members. There is

evidence of a de facto closed shop agreement for the construction industry, with
the CIF recognising BATU in exchange for support over the pay cut.4

This is the background to the 7.5% pay cut imposed on construction workers—

following a three‐year pay freeze—n the latest variation to the REA. However,

we question the authority of the unions involved to make such a decision, given
that the weighting of the vote was calculated on the basis of fraudulent
membership numbers. Moreover, at least one of the “big three” failed to ballot its
members fully, thus completely invalidating its own vote. The REA is a major
part of a worker’s contract of employment, and as such cannot be legally altered

without their consent

.

Implications of inflated union membership figures

The inflated membership figures also have wider implications. The power and

influence of ICTU and its affiliates is in direct proportion to membership levels.
This extends far beyond the immediate sphere of influence—ICTU delegates and
affiliates may be found on almost every quango one might care to mention, from
the board of the Central Bank of Ireland down.
The membership figures also determine the distribution of money from the
Construction Workers’ Health Trust. A question that has remained unanswered
since this was set up is how non‐union workers—ho contribute equally with
union members—an access this fund in time of need, as the unions have sole
responsibility for its distribution.

REA and RCT1 Issues

A year after the introduction of the REA, the then Minister for Finance, Charles

Haughey, introduced the Relevant Contracts Tax (RCT1). This allowed main
contractors in certain to employ others on a subcontract basis. From the start,
this was abused. At no time since its introduction did the legally binding REA
cover more than 30% of construction workers. Instead, the vast majority were
employed on the RCT1 system. This appealed to unscrupulous employers in that
it reduced their immediate overheads, but that short‐termism has left a legacy of
defaults on pensions contributions. The long‐term result will be an increasing

3

See attached correspondence between MJ Nolan TD and the Office of the

Registrar of Friendly Societies, and report on union membership from the 2009
Quarterly National Household Survey from the Central Statistics Office, which
makes quite clear the legal requirement.

4

See enclosed letters re representation of brick‐ and blocklayers from Paddy

O’Shaughnessy (BATU) and Eddie Keenan (CIF)
drain on the state pension fund as affected workers reach retirement age without
sufficient contributions. It will be left to the state pension fund to make up the
shortfall. The effect of this in the current economic climate, combined with an
increasingly aging population, will be disastrous.
The part played by the trade unions in this is worrying. Every Social Partnership
agreement signed by the unions somehow ignored the growth in the use of the
RCT1 system. Its removal—r at least amendment and strict enforcement—should have been a precondition of any talks from 1970 to the present day. Once
again, the unions seem to be colluding with employers to preserve the status
quo. The result, as we have seen, is that the RCT1 system has won out over the
“legally‐binding” REA.
It should be noted that in almost every case where RCT1 cases were investigated
by the Revenue Commissioners or SCOPE, for alleged non‐compliance with the
terms of the REA, the complaint was upheld.
Of all the employers in the industry, by far the most egregious abusers of the REA
were the speculators and developers, who eventually brought not only the
industry but indeed the entire country to its knees. Any submission from such
parties should be treated with the contempt it deserves.
In October 1998, Finance Minister Charlie McCreevy addressed Deputies in the
Dail in response to questions from Emmet Stagg TD. The transcript of the speech
is attached. We would point out a number of factual errors in Mr McCreevy’s
answer:

•

It is manifestly untrue to claim that “sub‐contracting itself is, and always

has been, an integral part of the construction industry”. It only became
such on the introduction of the RCT1.

•

Workers on “the lump” were not “paid without tax being deducted”—he

vast majority were on PAYE.

•

Far from playing “a vital role in combating tax evasion”, the RCT system

has facilitated the growth of the black economy.

Conclusion and Recommendations

Although to date the implementation of REA and RCT1 regulations has been

poor, with potentially catastrophic implications for the economy, we believe that
there is still time to rectify the situation.
Firstly, we reiterate that we fully support the REA, but that it must be properly
implemented. This means above all that its “legally‐binding” status must be
recognised and enforced.
Without the protection of the REA, the most vulnerable workers are open to
abuse and exploitation. Migrant workers in particular are at risk.
The REA allows a level playing field—there has been some evidence that
contractors have tendered for work on the basis of compliance, but priced that
work on the basis of non‐compliance. If such cases should come to light, the legal
and financial implications are worrying. Would a compliant contractor have a
case if he lost out to a non‐compliant rival? This very question was asked of the
then Secretary General of the Department of Education and Science, Brigid
McManus, by Sean Fleming TD in September 20085. Seventeen months on, the
silence is deafening. Meanwhile some of our poorest and most vulnerable
workers—ignorant of their rights and too frightened to protest—are subject to
xenophobic and racist abuse from those who see them as undercutting agreed
rates.
The pension “time‐bomb” could yet be defused. A substantial percentage of the
CWPS fund consists of small contributions from temporary workers—tudents
working in holidays, for instance—ho will never claim a pension from the fund.
This money could be used to offset the shortfall in contributions caused by noncompliant
subcontractors.
Compliance should be policed by independent bodies—either from the public
sector (NERA) or the private, where companies such as Contractors
Administration Services (CAS)6 for example have widespread experience in these
matters. If included from the earliest stages of negotiation, such bodies would
work to the benefit of both employers and employees. Although it might be
argued by some that this is introducing an extra layer of bureaucracy, the system
would be self‐financing, as it would bring in extra revenue. The increased
contributions to the CWPS would further reduce the burden on the public purse.
Similar protection should cover subcontractors. At present there is no regulation
to ensure that they receive payment promptly. Delays and defaults end up being
passed on to employees. We would draw your attention to legislation being
brought before the Oireachtas by Senator Feargal Quinn, which addresses this
issue7. We wholeheartedly support this bill as it offers protection to the majority
of workers in the industry who are currently employed on a subcontract basis.
It should be pointed out that such systems have been implemented successfully
worldwide, as well as by large private‐sector employers such as Hewlett‐
Packard, ESB and Aer Rianta in Ireland. It is also worth noting that France has
one of the lowest rates of union membership (7.5%) worldwide, yet has one of
the best records on compliance with employment rights and agreements.
Finally, we would reiterate that the CWAI fully supports a properly‐implemented
legally‐binding REA, which has given us forty years of industrial peace in the
construction industry. Its dilution or loss, while the RCT1 system remains, would
make widespread industrial unrest not a possibility, but a certainty.

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