A 2.75% pay rise for construction workers has been agreed for the year ahead following successful pay negotiations between the Federation of Master Builders (FMB) and Unite the union.

The Building and Allied Trades Joint Industrial Council (BATJIC) has agreed a one-year deal involving a 2.75% pay rise to come into effect in June 2019. This follows the successful conclusion of pay negotiations between the FMB, on behalf of SME construction employers, and Unite the Union, on behalf of operatives. BATJIC has also secured tax dispensation from HM Revenue and Customs for Lodging Allowance and Daily Fares Allowance for this year’s Working Rule Agreement after several years’ hiatus. The key information is as follows:

  • BATJIC has agreed a one-year deal involving a 2.75% pay rise over the next year
  • All apprentices and trainees will also benefit from a 2.75% pay increase
  • The adult general operatives’ rate increases by 26p per hour to £9.78
  • The NVQ3 advanced craft rate increases by 34p per hour to £12.79
  • The changes will come into effect as of Monday 24th June 2019

Brian Berry, Chief Executive of the FMB, said “This agreement strikes the right balance as it recognises the hard work that employees are putting into their work but at the same time, it reflects the uncertainty that many construction firms are facing. This increase is above last year’s rate of inflation, according to all three of the leading indexes, and sends out a strong message to tradespeople that we value them and want to retain them. It’s no secret that economic forecasts are quite conservative for the years ahead, given the unknown impact of Brexit, but I feel this is a good compromise from the perspective of both employers and workers.”

Jerry Swain, the National Officer for Construction at Unite the Union added “Unite welcomes this agreement which recognises inflation levels from last year and the high employment levels that we have at present. With construction skills shortages impacting on the industry, a 2.75 per cent pay rise will help encourage tradespeople to remain in the industry at a time when the current political uncertainty and drops in construction output are affecting confidence in the industry. I’m pleased that BATJIC has been further strengthened this year by successfully jointly lobbying for tax dispensation on key employee expenses. It was important that we secured the dispensation from HMRC in respect of lodge payments, as this now formalises the position regarding taxation of lodge payments. The dispensation gives peace of mind to our members and ensures that they will not face any claims for retrospective payment of tax when receiving lodge payments while working away from home.”

Construction workers operating under the Construction Industry Joint Council (CIJC) agreement are set for a boost in pay and allowances next month after a new two year pay deal worth 6.2 per cent was recently agreed.

The CIJC is the largest agreement in the construction industry and principally covers workers operating in civil engineering and the so-called biblical trades (carpenters, bricklayers and painters).

3.2 per cent increase this year

The agreement signed by Unite and the GMB will see pay rates increase by an inflation beating 3.2 per cent from Monday 25 June. The pay increase will mean that the minimum rate for craft workers (including carpenters, bricklayers and painters) is £12.31 an hour, with the general operative (labourer) minimum rate increasing to £9.26 an hour. Pay rates will increase by a further 2.9 per cent from Monday 24 June 2019.

The travel allowance will increase in line with the percentage rise in pay rates, the (tax free) fare allowance will increase in line with inflation however lodging allowances will increase by nearly eight (7.8) per cent to £40 a night in 2018 and will then increase by inflation in 2019, which is in line with other construction agreements.

Industry sick pay extended

Industry sick pay is to be increased and extended. It will rise to £130 per week (paid in addition to statutory sick pay) an increase of 6.1 per cent and it will now be paid for 13 weeks, an increase on the 10 weeks it is currently paid for.

The industry death benefit, paid via the B&CE, will increase from £32,000 to £40,000. If a worker is killed at work or travelling to and from work their family receives double that amount.

There has also been a significant increase of 6.5 per cent in the payment for first year apprentices who will receive £5.50 an hour, it is hoped that the increased rate will attract a greater number of new entrants into the industry.

Strong step in right direction

Unite national officer for construction Jerry Swain said “This deal is a strong step in the right direction and will give construction workers a well-deserved pay increase.

“The increases in allowances and other benefits, underline the value of working under an industrial agreement and being part of collective bargaining arrangements.

“Over the next two years we will be working to further strengthen the agreement and ensure that it is brought into line with other agreements in all matters and is seen as relevant on major construction sites.

“Construction workers need to remain vigilant that employers actually pay the agreed pay rates. Too often in construction employers try to boost their profits by failing to pay agreed increases.”

GMB national officer Ross Murdoch added “Given the current climate in the wider construction industry and overall economic climate, this deal is both a recognition of a hard-working, highly-skilled workforce and a demonstration of real commitment to maintaining meaningful joint national industrial agreement.”

“As further significant construction projects emerge over the next few years, this deal offers genuine hope of retaining the much needed skills for the industry, as well as attracting new apprentices, with the percentage uplift for apprentice rates further reinforcing the importance of this latter point.”

Construction workers employed at Hinkley Point have overwhelmingly rejected a pay offer in the longstanding dispute over pay and bonuses on the project.

The unions concerned, Unite and the GMB, will now go ahead with notifying the companies concerned of their intention of holding an industrial action ballot and then progress to ballot members for strike action.

The workers overwhelmingly rejected the proposed pay increase, with over 95 per cent voting against the proposals in a consultative ballot. Members were told that the rejected offer was the best that could be achieved “through negotiations”.

The dispute, which has been ongoing since the spring, concerns the pay of workers engaged on civil engineering contracts at Hinkley Point which is the largest construction project in Europe. There are already over a 1,000 workers employed on these contracts at Hinkley Point.

Negotiations on the pay offer have involved the client EDF and the main contractor BYLOR (the principal contractor Laing O’Rourke and Bouygues TP) as well as the unions.

A ballot for strike action was called off in June after an interim agreement on bonus payments was agreed. The three month agreement was extended into September in the hope that a permanent deal could be made.

One of the principal issues is that the pay rates for workers on civil engineering contracts are significantly below the rates of workers covered by the mechanical and engineering (M&E) contract.

Unite national officer for construction Jerry Swain said “Members have made their views clear; the unions warned the amount of money being offered was not sufficient and this has proved to be the case.

“The client and contractors need to understand that this is a high profile, complex project, built in a tightly controlled secure zone, which is being built in an isolated part of the UK. It cannot and will not be built on the cheap.

“For too long the construction industry has treated workers on civil engineering projects as the poor relations and these attitudes are no longer acceptable. The employers have set the benchmark with the mechanical and engineering agreement they need to come forward with an offer that meets our members’ expectations.

“There is a window between now and the commencement of any industrial action to still resolve this dispute, provided the client and the contractors come back with an improved offer. The unions are fully prepared to return to the negotiating table if an improved offer is put forward.”

Phil Whitehurst, GMB national officer for construction, said “The ballot result is a clear indication that the national officers of both GMB and Unite have to get back round the table with EDF as matter of urgency.

“We will be seeking meetings with EDF as soon as possible to solve this situation on behalf of our members.”

Unite, the UK’s largest construction union, is calling for root and branch reforms of employment rights after new figures demonstrated bogus self-employment in construction is out of control.

A Freedom of Information request by Unite has revealed that in 2016/17 at least 1.076 million construction workers were paid via the Construction Industry Scheme (CIS), an eight per cent increase on the figure of 12 months ago when 992,973 were paid via CIS. In total 47 per cent of the entire construction workforce is now paid via CIS.

The sharp rise in workers operating via CIS demonstrates that the government’s hopes of reducing construction bogus self-employment has failed. In 2014 the government introduced measures that barred construction workers operating via engagers (employment agencies and payroll companies) from being self-employed.

CIS is the stand alone tax system for construction workers. Workers paid via the scheme are normally officially classified as self-employed although the nature of their engagement means that the vast majority are bogusly self-employed.

The bogusly self-employed have all the employment characteristics of an employee but are denied even the most basic employment rights such as holiday and sick pay and can be instantly dismissed without warning.

The principal beneficiaries of bogus self-employment are employers who do not pay employers’ national insurance contributions of 13.8 per cent and don’t have to pay employee benefits such as holiday pay.

Gail Cartmail, assistant general secretary, of Unite said “These figures demonstrate that bogus self-employment in construction is out of control. Employers are simply ignoring the rules in order to line their pockets and deny workers their rights.”

The government’s 2014 reforms led to a huge increase in workers being paid via umbrella companies, which results in the worker having to pay both employers’ and employees’ national insurance contributions as well as a plethora of other deductions from their wages. The government has previously conservatively estimated there are 430,000 workers being paid via umbrella companies, the majority of whom work in construction.

The government’s much heralded Taylor Review, while calling for it to be clearer to “distinguish” between workers and self-employed workers fails to address how existing Treasury policies are creating bogus self-employment and causing worker exploitation.

A recent survey by the Joint Industry Board (JIB), that sets the standards for employment, welfare, and apprentice training in the electrical contracting industry, revealed that 84 per cent of electricians want to be directly employed, rather than employed via an agency in order to receive full employment rights, paid holidays and benefits.

Gail Cartmail added “We have huge numbers of construction workers being routinely exploited via the government’s own tax scheme and via umbrella companies and yet the Taylor Review has ducked these issues.

“Taylor talks about his seven principles for fair and decent work which includes workplace training and the health and wellbeing of workers but while the real employer can continue to divest themselves of their workforce and have no responsibility for them, his principles are nothing but warm words.

“The only way that workers will be treated fairly and decently is by introducing clear rules which ensure that workers are either genuinely self-employed or paid by a standard PAYE method. Without such a reform productivity in construction will remain low, accidents and ill health will be high and the industry will fail to train sufficient numbers of apprentices.”

“The recent survey by the JIB destroys the myth that construction workers want the flexibility to operate via agencies or be self-employed. What workers want is to do know they are going to receive a steady wage and have the security of regular employment.”