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New Sectoral Employment Order for Workers in the Mechanical Engineering Building Services Contacting Sector

The Sectoral Employment Order (Mechanical Engineering Building Services Contracting Sector) 2018 (“SEO”) has been signed into law by Minister Pat Breen. With effect from 6th March 2018, the SEO applies to certain workers in the mechanical engineering building services sector (the “Sector”).

This is the second SEO enacted into law following the establishment of the SEO framework under the Industrial Relations (Amendment) Act 2015. The framework was introduced to replace the previously used mechanism, the Registered Employment Agreement (“REA”) system, which was declared unconstitutional in 2013 by the Supreme Court in the case of McGowan v The Labour Court.

The Order will affect qualified plumbers and pipefitter, registered apprentice plumbers and pipefitters (craftsmen) employed in the mechanical engineering building services contracting sector. Additionally, the Order relates to all employers of such workers, including those employed through an employment agency.

It would appear that some of the SEO provisions were copied almost exactly from the previous Construction Industry REA.

Terms under the SEO

  1. Hours
    The Order outlines the following minimum hourly rates of pay that are compulsory for relevant Contracting Firms to pay their workers:
    • Newly Qualified Workers (Category 1 Workers) – €22.73 per hour
    • Workers starting their Third Year (Category 2 Workers) – €23.33 per hour
    • Workers starting their Sixth Year (Category 3 Workers) – €23.60 per hour
    • First Year Apprentices – 33.3% of Category 1 Worker hourly rate, to increase to 90% for Fourth Year Apprentices.
    Additional pay is mandatory for unsocial hours rising to either time and a half or double time depending on the timing of the work.
  2. Dispute Resolution
    The SEO provides for a dispute resolution procedure. No Industrial Action can be taken in relation to matters the subject of the Order until this procedure is complied with. A worker is obliged to raise any individual dispute with their employer at local level, and if it does not get resolved, the dispute may be referred to the Adjudication Services of the WRC. Either party may appeal the outcome of the Adjudication Hearing to the Labour Court.
    In relation to collective disputes, the grievance is to be raised with employers first, and then referred to the Conciliation Service of the WRC if unresolved. If the matter still remains unresolved, if may then be referred to the Labour Court for investigation and a recommendation.
  3. Sick Pay and Pension Scheme
    The Order provides that employers must provide benefits and sick pay schemes on no less favourable terms than those conveyed in the Construction Workers Pension Scheme and the Construction Workers Sick Pay Scheme. The SEO outlines that the pension scheme is to include a death in service contribution.

Since finding that the previous registered employment agreement system were unconstitutional, there has been a lacuna in terms of worker protection and the SEO was sought to address this gap. Certainty surrounding wages and other benefits is of course a good thing for workers and their employers, although the burden of wage increases will significantly impact the price at which a construction project can be completed. Without further delay, Employers in this Sector will need to review and evaluate their payment practices to ensure that they comply with the new requirements set out in the Order, as it is legally binding and its terms are enforceable in the Workplace Relations Commission.

For any queries, please contact Anne O’Connell Solicitors at info@aocsolicitor.ie or +353 1 2903580
27th March 2018

Anne O’Connell
1-3 Burton Hall Road
Dublin 18

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