Construction Industry Pensions Scandal

national | worker & community struggles and protests | news report Wednesday February 15, 2006 15:13 by Dáil Observer

70,000 to 120,000 construction workers are being criminally denied their legal and mandatory pension rights by construction bosses

Today (Wednesday) in the Dáil Joe Higgins T.D. challenged the Taoiseach on the fact that 70,000 to 120,000 construction workers are being criminally denied their legal and mandatory pension rights by construction bosses. He asked "Can the Taoiseach name one construction boss, builder or developer who has spent one hour in jail for this criminal denial of workers' rights? He cannot, because it has not happened. However, three bricklayers who put a picket on a Dún Laoghaire County Council building site protesting anti trade union practices found themselves in the High Court and within days in Mountjoy jail where they now languish. The learned judges eyes are wide open to breaches of their injunctions in favour of construction employers, but their wigs apparently fall over their eyes when it comes to routine criminality from those same construction bosses towards workers".

Dáil Éireann, Leaders’ Questions, 15th February 2006

Joe Higgins (Socialist Party): Was the Taoiseach's attention drawn to an assertion that an astounding 70,000 to 120,000 construction workers are being criminally denied their legal and mandatory pension rights by construction bosses, which means that, apart from losing pension entitlements, they are deprived of death in service benefits and sickness benefits? Making these assertions a few days ago was not a revolutionary socialist or a trade union activist but the sober Office of the Pensions Ombudsman. The Pensions Ombudsman also pointed out that failing to put workers on a pension scheme is a criminal offence subject to fines and-or imprisonment. This means that up to 130,000 workers are the subject of criminal acts on building sites each day, which have been going on for years and decades. Can the Taoiseach name one construction boss, builder or developer who has spent one hour in jail for this criminal denial of workers' rights? He cannot, because it has not happened. However, three bricklayers who put a picket on a Dún Laoghaire County Council building site protesting anti trade union practices found themselves in the High Court and within days in Mountjoy jail where they now languish. The learned judges eyes are wide open to breaches of their injunctions in favour of construction employers, but their wigs apparently fall over their eyes when it comes to routine criminality from those same construction bosses towards workers.
What has the Taoiseach to say to these workers and their families who are cheated of their pension rights, often through questionable practices and intimidation or through the rampant culture of greed which Government policies have spawned in the construction industry? The Taoiseach has stood over a roller coaster of greed by speculators and developers.
Can workers hope for any vindication of their pension rights when Ministers, those sitting by the Taoiseach now, routinely turn the sod on State projects awarded to major builders who are in flagrant breach of pension rights, a regular occurrence? Is the Taoiseach going to do anything about this sorry situation?

The Taoiseach: Any employers, whether in the construction industry or elsewhere, who abuse the rights of workers with regard to their pensions, occupational health or any other benefits are entirely wrong. Their actions are inappropriate. I understand that in some cases contributions were taken but credits were not given. Such cases are illegal.
These are serious matters and have been highlighted for some time. The Minister for Social and Family Affairs, Deputy Brennan, has been engaged in meetings with the construction industry unions on the issue. He has heard submissions from the workers on the extent of the abuses that have taken place and has been involved in discussions with the Minister for Finance to make whatever changes or regulations are necessary to try to end the abuse. The Pensions Board is also dealing with the issues. These matters are under way.
Construction is a large part of the economy. I do not have the figures on the extent of pension cover in the industry, but I am sure the Minister for Social and Family Affairs and the Minister for Finance do. They have been engaged in trying to rectify the breaches and deal with the issues raised by the Deputy.

J. Higgins: I believe the Taoiseach is not fully aware of the situation which has been brought out by recent reports and the ombudsman. The Pensions Ombudsman says that the construction companies who criminally neglect pension obligations to workers have a 22% commercial advantage over compliant builders. The reality seems to be that the neoliberal obsession driven by the Government is leading to outright criminality.
I reckon that a minimum €120 million a year is being stolen by big developers from workers pension rights, but not one of them has faced any serious rigour of the law. However, in Carlow District Court in 2004, an unfortunate recipient of unemployment assistance to the tune of under €3,000 was sent to jail for six months for falsely claiming assistance.
What has been the contribution of the Minister for Social and Family Affairs? He brought out a weak press statement a few months ago. He agonises continually about a new mandatory pension scheme, but we have one, that should be underpinned by law, of which the bosses are in blatant breach. What is he doing about the situation? A weak press statement is hardly an answer.
The Government has turned a blind eye because, among the 12 developers who have become billionaires as a result of Government policies and among the hundreds who sit down with the Taoiseach at Cairde Fianna Fáil fundraising bashes are these very criminals who deny workers their pension rights. That is the reason the Taoiseach is soft on them. I and the Independent colleagues beside me will return to this issue in a few months. If tens of thousands more construction workers are not on pension schemes then, we will want to know why.

The Taoiseach: As I said earlier, if the Deputy has information about who is in breach of the regulations, he should give that information to the ombudsman. With regard to his point, it was this Government that set up the Pensions Ombudsman in 2003, and the office became operational -----

J. Higgins: Does the Taoiseach know what the ombudsman said? He does not seem to be aware of what he said.

An Ceann Comhairle: The Taoiseach, without interruption.

The Taoiseach: The office became operational in autumn 2003. It is Government action that has led to a position where pension schemes are being investigated and the Deputy should not forget that. The level of the breaches in this area is coming out through the work of the Pensions Ombudsman. It is not true the Minister issued a weak press release. It is true that he has engaged with the construction unions to try and ensure we can deal with these issues. It was not today nor yesterday that the issue of breaches in CIF pensions arose. The issue has been around for years. People have worked on sites and their contributions were not credited or dealt with by members of the industry. It has been a long-term issue. Therefore, having stronger legislation, a Pensions Ombudsman and proper investigation of the operation of pension schemes are hugely beneficial.
The Minister has listened to the unions, who have the information. The ombudsman's research has also been helpful. The Minister for Finance, Deputy Cowen, has been involved with the Minister for Social and Family Affairs to try and see what improvements we can put into the scheme to ensure it is statutorily tight. As the Deputy said, there is already legislation, but it has not worked for decades and that is part of the difficulty. The Pensions Board has also examined the matter.
There are more and more people working in the construction industry who are entitled to their benefits. They should be in a pensions scheme and should have their contributions credited to it. I am sure a significant number of people are in a scheme, but where they are not we must make corrective actions. That is what is going on in the current discussions.