A pay cut of 20 per cent is being sought by the Construction Industry Federation (CIF) for existing staff and entry-rate workers in the sector.
The CIF is asking the Labour Court to change the registered employment agreement for the sector which governs minimum terms and conditions. It is also seeking new arrangements for the operation of overtime and reforms of travelling allowances.
A spokesman for the CIF said the lack of any reduction in pay had led to a very severe competitiveness problem within the industry. He said that while tender prices for public and private jobs were down 30 per cent, costs had remained the same because labour accounts for 40 per cent of the cost of every project.
“Someone just starting out in construction earns more than a graduate engineer or newly qualified accountant. The minimum wage for someone beginning in construction is €34,000,” he added.
The CIF also argued that pay rates in the sector are significantly out of line with those in Northern Ireland and in Britain.
The Republic of Ireland might be losing construction contracts to the North as they have a lower cost base, the spokesman said. "There is a limited pool of investment, but if the construction industry can get its costs down, hopefully it can attract more investment," he added.
This is the second occasion in the last two years in which the CIF has sought to reduce pay scales in the building sector.
Previously it sought to introduce a 10 per cent cut to pay. However, the Labour Court rejected the move to change the terms of the registered employment agreement.
Meanwhile, a report published by Ulster Bank Ltd today showed Ireland's building industry contracted at a faster pace last month.
The Ulster Bank Construction PMI index declined to 40 in May from 42.5 in April, the report shows. A reading below 50 indicates contraction.