New Legislation Makes Legal Requirement for Pension, Death in Service, and Sick Pay
As a result of the SEO being signed into law, pensions, sick pay and death in service benefits are required for specified workers in the construction sector. CWPS Chairperson Andy O’Gorman outlines to Barry McCall what this will mean for the sector.
CWPS Chairperson, Andy O’Gorman
Sectoral Employment Order
The signing of the Sectoral Employment Order (SEO) into law by Minister for State Pat Breen TD. The SEO has resulted in the replacement of the old Registered Employment Agreement (REA) for the industry, which was deemed to be unconstitutional by the Supreme Court in 2013 because of the underpinning legislation.
SEOs were established by the Industrial Relations (Amendment) Act 2015 as a means for interested parties to apply to the Labour Court to carry out an examination of rates of pay, pensions and sick pay in a sector with a view to making a recommendation to the Minister to set legally binding rates.
Application to the Labour Court
In 2016, CIF made an application to the Labour Court for an examination of rates, pensions and sick pay and was joined by ICTU, Unite and the Construction Workers Pensions Scheme in making individual submissions the following year.
“We made a submission because CWPS is an interested party”, explains CWPS Chairperson Andy O’Gorman. “We have close to 300,000 members between ‘actives’ and ‘deferreds’, and we are currently the scheme of choice for anyone in the industry with employees.”
CWPS 50th anniversary in 2015
Little wonder. The scheme celebrated its 50th anniversary in 2015, and it has been ahead of its time throughout its history. As a multi-employer scheme, it offers full transferability and portability of pensions to construction workers, as they moved from employer to employer.
Furthermore, CWPS members now bring their individualised pension pots with them throughout their career as a result of changes made in 2006 following extensive discussions between employers and the construction group of unions.
“The first thing we did in our submission was to set out the background and size of the scheme. It had been the scheme that was exclusively used by the whole industry until the Supreme Court struck down the REA”, says Andy O’Gorman. “Of course, we accept that no scheme has a natural right to be the only one deemed suitable for the industry.”
Death in service benefit of €100,000
The submission also included details of the death in service benefits and sick pay scheme. “We provide members with a death in service benefit of €100,000 regardless of the cause of death, without any medical underwriting”, he points out. “Also most employers in the industry don’t have sick pay schemes of their own in place for employees. Our scheme attempts to bring members up to average industry earnings when they are off work due to illness or injury. The pension contribution used to be 7% of average earnings and the Labour Court has now given us set contribution rates.
The SEO recommended by the Labour Court and accepted by the Minister has proposed CWPS as a scheme that meets all the requirements of the legal instrument.
“The Labour Court has been very clear that any other scheme would have to offer the same benefits and conditions, as CWPS,” he adds.
“It helped that both the employers and the group of unions were agreed that there should be a mandatory pension scheme for the industry and that the CWPS offered good value for money as such a scheme. The Labour Court accepted this view. The same procedure has now begun for the Mechanical Engineering and Building Services sectors and the Labour Court is deliberating on those at present.”
Rates for the Construction and Related Industries
|Death in Service Contribution||€1.11||€1.11*||€2.22|
|Sick Pay Contribution||€1.27||€0.63||€1.90|
|Standard Contribution Total||€29.01||€19.50||€48.51|
* Contributions for Pension and Death-in-Service Benefit are made before PAYE is calculated.
Construction Safety Week
The Construction Workers’ Sick Pay Trust was a sponsor of Construction Safety Week. “We were delighted to be able to participate in Construction Safety Week this year,” says Andy. “We support our members when they are absent from work because they are sick or injured. Construction Safety Week is very important as it helps to highlight the need for safety awareness. Construction sites are dangerous environments and people need to be aware of that and take steps to minimise the dangers. The overall aim is to reduce accidents on construction sites in Ireland – everybody will benefit from that.”
Extended version of interview originally published in CIF Construction magazine November 2017
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