The Construction Contracts Bill, first introduced in the Seanad by Independent Senator Feargal Quinn, will greatly improve payment practices in the construction industry by providing clarity and transparency in the payment of monies due in construction contracts.
Crucially, the new legislation puts in place mechanisms to prevent hard-pressed subcontractors being forced out of business by developers as a result of late, or withheld payment, on completed work.
Senator Quinn said the large developers can rely on NAMA to give them relief when things go wrong but up to now many subcontractors have been driven to despair when construction companies set up by developers collapsed. Many were left in dire circumstances without any income and not entitled to social welfare support because they had set up their own companies.
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Subcontractors include those involved in architecture, engineering, plumbing, electrical and mechanical work, kitchen manufacturing, painting, the supply of doors and windows, concrete and timber frame manufacturing, interior design, gardening and ground moving services.
Under the new legislation construction subcontractors will have:
• the right to suspend work when payment has been withheld for completed work
• be entitled to receive clarification about when and how they will be paid
• access to a fast-track adjudication procedure through which disputes will be settled more fairly, quickly and efficiently.
Senator Quinn said: "Bringing in laws that strengthen payment practices in the construction industry will improve crucial cash-flow to those subcontractors working in the industry, thereby helping companies involved in this vital sector to survive and keep people in employment during these particularly challenging economic times. Maintaining and growing employment in construction is crucial to our economic recovery.
"At the height of the boom, some 273,000 people were employed in the sector and now it has dropped to 96,000. The scale of the downturn in the economy and the difficulty in securing credit has left many subcontractors who are involved in the construction industry facing huge cashflow difficulties that are being compounded by the non-payment of debts."
Senator Quinn, a strong advocate of Seanad reform and a founder member of the Democracy Matters group, said the Construction Contracts Bill had been introduced by him as a Private Members Bill in the Seanad in 2010 as a response to how inadequate the existing legislation was in offering protection to subcontractors.
"In a week where we move towards a referendum on the proposed abolition of the Seanad, the passing of the Construction Contracts Bill is a real example of the Seanad working at its best and just imagine what could be achieved by retaining, reforming and strengthening it in the future," Mr Quinn added.
(CD/JP)
