The Construction Industry Federation (CIF) has welcomed the initiative by the Department of Education to clamp down on non compliance in construction work by organising random audits of school building projects. The CIF believes that this model should be examined by other Government Departments and should form the template for ensuring compliance on all public projects in the future.
Under the Registered Employment Agreement (REA) all construction companies are required to provide certain wages and other terms and conditions for their employees. However as the level of work in the construction industry has decreased there has been great concern within the industry that some construction operations are ignoring the REA to provide a lower tender price.
Speaking about the initiative, CIF Director General Tom Parlon said, “The issue of compliance is a major, major issue for the construction sector. The construction industry has been signed up to a Registered Employment Agreement which provides a set, negotiated set of wages as well as terms and conditions to the construction workers. This has been an across industry agreement which all construction companies operating in this country are required by law to obey.
“Unfortunately as activity in the construction industry has declined so has compliance. There is a race to the bottom to submit lower tender prices. Some construction companies are cutting corners in a variety of different aspects – including the wages they should be providing their employees.
“With so many former construction workers currently looking for work, some companies are taking advantage of the lack of opportunities. They are offering rates below what these workers should be receiving and this is allowing them to submit lower tender prices. It means that those construction companies who do obey the law and are compliant are losing out.
“We have been pressing the Government to bring forward more measures to enhance compliance and this scheme could have a strong impact. It will be interesting to see how the system develops. Potentially this could serve as a template for other Government departments and State bodies. If the scheme is a success we believe that it should be adapted across the public procurement system.
“Of course another way of enhancing compliance is to pass the Construction Contracts Bill. The delay with this legislation, which has now 1078 days on the Oireachtas books is not helping ensure compliance or payments are being made to those main and sub contractors who are due them. Enacting this legislation would be another step by the Government to ensuring compliance in the industry,” Mr. Parlon concluded.