Electricians’ pay order would drive smaller corporations ‘to put off’ workers

A law setting minimum wages and pension contributions for electricians would have forced smaller contractors to lay off workers, a company warned over the weekend.

The High Court last week knocked down part of the Industrial Relations Act of 2015 that allows the government to issue sectoral work orders and set the terms in construction and related industries as it was unconstitutional.

John Smith, managing director of National Electrical Contractors Ireland (NECI), said the business he runs with his Smiths of Wicklow brothers would have had to “fire people” if it had been forced to comply with a sectoral order that applied to its industry.

Mr Smith added that thousands of small and medium-sized contractors like him, mainly based outside of Dublin, would have been forced to do the same.

The NECI challenged a sectoral employment ordinance for electrical contractors issued by former Minister of State for Employment Pat Breen on the basis of a recommendation from the Labor Court.

This set the electrician’s salary between 23.49 and 24.34 euros per hour, depending on the service, and also determined what contributions these employees and their employers should make to a builder’s pension.

After hearing the NECI challenge, Justice Garrett Simons put down chapter three of the 2015 law, which outlines how sectoral work orders are given as the minister was able to enact the law, a role that the Constitution only reserves for the Oireachtas the Dáil and Seanad.

Mr Smith’s company employs five electricians and four apprentices. He pointed out that the law eliminated the company’s ability to negotiate terms with its own employees. “It didn’t give us the flexibility to maneuver through anything the economy throws at us.”

His company works mainly on the installation and maintenance of electrical equipment and fittings in private households. It competes with retailers who are not tied to the order. Mr Smith noted that most of the smaller contractors were in the same boat.

“We do a lot of maintenance for private individuals, our main competitors are one-man bands, we could never do that,” he said.

He also noted that his company allowed workers more flexibility in working hours than larger establishments, and gave employees time to deal with family responsibilities such as childcare.

Great players

Mr Smith said the contractors who primarily supported the sectoral employment order were mostly big Dublin-based actors working on large projects, often for multinational companies.

The Electrical Contractors’ Association and the Association of Electrical Contractors Ireland, together with the Connect union, filed the original application to the Labor Court in October 2018. The court then recommended that the government issue the order.

Justice Simons’ decision means that all three sectoral work orders from the last government that govern the terms and conditions for construction workers, plumbers and electricians are no longer valid.

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