This autumn brought the coming into force of two new Sectoral Employment Orders ("SEOs"). To help you understand what this means for employers, we first recap the basics of SEOs generally and then summarise the key contents of the two recent SEOs.

What are the important points to remember about SEOs?

  • SEOs are Orders made by the Minister for Business, Enterprise and Innovation, on the recommendation of the Labour Court, and approved by both Houses of the Oireachtas, which set out the minimum rates of remuneration and the minimum pension and sick pay entitlements of workers of a particular class, type or group within a specified economic sector.
  • SEOs are unusual in Irish industrial relations because they apply to employees and employers who were not involved in their formulation at any stage. SEOs will apply to every worker of the class, type or group in the economic sector to which they are expressed to apply, and to their employers.
  • If the contract of employment of an SEO worker provides for a lower rate of remuneration or less beneficial sick pay or pension entitlements than those in the SEO, the more favourable SEO provisions will be substituted in place of the inferior provisions in the contract of employment.
  • If an employer fails to comply with an SEO's terms, an employee may bring a complaint to the Workplace Relations Commission (with an appeal to the Labour Court) and be awarded up to 2 years' remuneration, together with an order directing the employer to comply with its obligations.
  • Employers must not penalise an employee for relying on his/her SEO rights.
  • An employer to whom an SEO applies must keep employment records at the place of work to show compliance with the SEO for at least three years from the date of making those records. Failure to do so is a criminal offence.

The Sectoral Employment Order (Construction Sector) 2019 (the "Construction SEO")

When did it enter force? 1 October 2019
Does it replace a previous SEO? Yes, the 2017 Construction SEO.
Who does it apply to?
 General construction sector employees, specifically craft persons, construction operatives and apprentices.
The definition of the construction sector is exceptionally broad and any employer who is unsure as to whether or not the SEO applies to them should consult the SEO for its full scope or seek tailored legal advice. The SEO's scope includes the construction and demolition of buildings, clearing of sites, laying of foundations/sewers/drains, construction of boundary walls/paths/railings/fences, stone work and ground levelling.
What minimum rates of pay are set? What minimum rates of pay are set? Rate of pay per hour from 1 October 2019 to 30 September 2020 Rate of pay per hour from 1 October 2020
Craft persons, including: brick or stone layers, carpenters, joiners, glaziers, plasterers, painters and others. €19.44 €19.96
Category A workers, including: scaffolders with a scaffolding card and four years' experience, banks operatives, steel fixers, crane drivers and heavy machine operators. €18.86 €19.37
Category B workers: skilled general operatives who have worked in the sector for more than 2 years.
 €17.50 €17.97
Apprentices
 One third of the craft rate in their first year, with specified increases year on year until qualification. One third of the craft rate in their first year, with specified increases year on year until qualification.
New entrant operative workers who are over 17 and entering the sector for the first time (continuing to apply for the first two years after entering the sector). €14.14 €14.52
What normal working week is set? Category
 Specification
Hours per week
 39
Days per week
 Monday to Friday
Hours per day
 Four days for eight consecutive hours work between 7am and 5pm Monday to Thursday, and seven consecutive hours work from 7am to 4pm on Fridays.
Overtime
 Time plus a half or double time must be paid outside of the normal weekly working hours set out above. The amount of that overtime payment depends on the day and the time of day those overtime hours are worked.
What are the pension and sick pay requirements? Detailed provisions are provided in relation to pensions. For example, pension schemes must have no less favourable terms than those set out in the Construction Workers Pension Scheme and must also provide entry access to anyone over 18.
Employers must pay a minimum pension contribution of €27.35 per week and a minimum death in service contribution of €1.14 per week. Provisions in relation to sick pay are also included. Employers must operate a sick pay scheme on no less favourable terms than those set out in the Construction Workers Sick Pay Scheme.
Does it cover dispute resolution? Provisions are included in relation to individual and collective dispute resolution.

The Sectoral Employment Order (Electrical Contracting Sector) 2019 (the "Electrical Contracting SEO")

When did it enter force? 1 September 2019.
Two critical aspects of the SEO have not yet entered force. These are its pension and sick pay provisions. These are stayed pending the outcome of a High Court case brought by National Electrical Contractors Ireland ("NECI").
Does it replace a previous SEO? No, this is the first in the sector.
Who does it apply to? Qualified or registered apprentice electrician employees.
What minimum rates of pay are set? Employee type Rate of pay per hour from 1 September 2019
Newly qualified electrician. €23.49
Qualified electricians from their third year of employment. €23.96
Qualified electricians from their sixth year of employment. €24.34
Apprentice electricians. €7.05 per hour with specified increases year on year until qualification.
What normal working week is set? Category Specification
Hours per week 39
Days per week Monday to Friday
Hours per day Four days for eight consecutive hours work between 7am and 5pm Monday to Thursday, and seven consecutive hours work from 7am to 4pm on Fridays.
Overtime Overtime of time plus a half or double time must be paid outside of the normal weekly working hours set out above.
Unsociable hours worked
 This is for specific projects where the hours will vary from normal daily working hours where rates of time plus one quarter and time plus one third will apply depending on what day and when in the day the hours are worked.
What are the pension requirements? As with the Construction SEO, detailed provisions are also included in relation to pension and sick pay schemes.
The pension and sick pay provisions are stayed pending the outcome of a High Court case in which NECI are looking for the SEO to be entirely struck out. If the NECI are unsuccessful, contributions will be backdated to 1 September 2019, coming into force date of the rest of the SEO. See below for further detail on the High Court challenge
Does it cover dispute resolution? Provisions are included in relation to individual and collective dispute resolution.

High Court Challenge to the Electrical Contracting SEO

An application by one of several electrical contractor employer bodies, National Electrical Contractors Ireland (NECI), for a stay on the Electrical Contracting SEO was partially accepted by the High Court, in relation to the pension and sick pay contributions aspects of the SEO.

NECI is seeking a declaration that the Labour Court breached its duties in making a recommendation to the Minister for Business, Enterprise and Innovation to register the SEO, including the duty to act with constitutional propriety and natural justice and the duty to provide clear reasons for its decisions. NECI also seeks a declaration that the examination of the sector by the Labour Court was 'ultra vires' and that the SEO breaches the personal rights of NECI members. The injunction application had sought a stay on the implementation of the entire SEO, until the full hearing of the case.

The High Court held that, while the balance of convenience lay in implementing the other terms of the SEO (including the 2.7% pay increase and other legally binding minimum conditions on working time and dispute procedures), the balance of convenience in relation to the pension, sick pay and death in service contribution was in granting the stay. The stay only applies pending the outcome of the substantive case, for which a hearing date has yet to be set.

Advice to employers

All employers captured by the two SEOs must comply or accept the risk of the civil and criminal actions that may follow.

If an employer believes that it could fall within one of the exemptions, which are subject to strict statutory controls, the employer should take steps to begin the necessary application to the Labour Court to secure the exemption.

Employers in the electrical contracting sector should carefully monitor the outcome of the NECI High Court case and reassess the position thereafter.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.