An organisation representing small business says it is disappointed with the Government's decision to approve Labour Court recommendations for new minimum pay rates in the construction and electrical contracting sectors. 

The Small Firms Association said due to high demand for tradesmen on building sites across the country, service providers in the construction and electrical sector are finding it difficult to compete against these labour rates.

The SFA said they are also finding in difficult to retain and attract tradesmen. 

"These small businesses also offer permanent stable employment, training and upskilling alongside additional benefits," said Sven Spollen-Behrens, SFA Director. 

"It is discouraging that the debate on terms and conditions in the construction and electrical sector continues to revolve around one single number and does not take the broader package on offer into account". 

From the Autumn those receiving minimum pay rates in the construction and electrical contracting sectors will be entitled to a 2.7% increase. 

This follows a formal decision by the Government to approve new pay rates that stem from a Labour Court recommendation, following an application by the BATU, Connect, OPATSI, SIPTU and UNITE unions as well as the Association of Electrical Contractors Ireland and the Electrical Contractors Association.

In a statement, Minister for Trade, Employment, Business, EU Digital Single Market and Data Protection, Pat Breen, said he was satisfied that in its consideration, the Court complied fully with the provisions of the Industrial Relations (Amendment) Act 2015.  

"The Sectoral Employment process is welcome in that it provides an independent assessment of pay rates that takes into account the views of all interested parties," he said. 

Minister Breen said the measures would be an important step in securing stability and growth in crucial sectors in the economy. 

He added that the changes would protect working conditions in the sectors concerned and underpin good relations between employers and their staff. 

Unsocial hours payments and terms for pension and sick pay scheme are also addressed in the recommendation. 

The Construction Industry Federation warned the decision to increase wages by 2.7% for the next two years would put pressure on regional construction companies still in recovery mode.

"The reality in regional Ireland is that there is not enough activity to sustain construction companies in those areas," said Tom Parlon, Director General of the Construction Industry Federation.

"We have consistently highlighted the disparity in activity between the Greater Dublin Area and the rest of Ireland."

"Our regional contractors and housebuilders are reporting low levels of activity in the regions already.  This wage increase will put more pressure on these companies making the delivery of essential housebuilding, infrastructure delivery and job creation in the regions even more parlous."

The news was given a cautious welcome by the Unite union.

However, it warned that "modest wage gains" could be largely cancelled out by spiraling costs in areas such as housing and childcare.

"Today’s news that Minister Breen has accepted the recommended new pay rates is some good news for workers in the construction and electrical contracting sectors," said Regional Officer for Construction, Tom Fitzgerald.

"However, if construction jobs are to be good jobs and the industry as a whole sustainable, the government will need to contain spiraling costs."

"Many construction workers cannot afford to either buy or rent the houses they build."

"Against the background of high costs in areas such as housing and childcare, the 2.7% increase in minimum pay rates set to take effect in the autumn only amounts to a modest gain."

The draft Sectoral Employment Order setting out the changes must still be considered in both Houses of the Oireachtas before it can be adopted in law.