Tag Archive for: Pay

Construction growth

SME contractors agree 2.75% pay deal for workers

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Employers and unions have agreed a 2.75% pay rise for construction workers under the Building and Allied Trades Joint Industrial Council (BATJIC) agreement.

The increase is below last year’s 3.1% rise and will come into effect from June.

The one-year-deal follows successful talks between the the Federation of Master Builders (FMB) and Unite the union.

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 deal in detail:
• 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, said: “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.”

Source: Construction Enquirer

Contractors pay

Contractors who don’t pay on time to be banned from public works

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Main contractors who do not pay their supplier promptly are to be banned from bidding for public sector contracts according to the Government.

The measure is among a package of proposed measures to help smaller businesses win public sector and government contracts.

Under the proposals, tier one contractors on government contracts, including construction projects, will be forced to demonstrate “fair and effective payment practices with their subcontractors”, otherwise they will not be allowed to bid for work.

Other plans include allowing subcontractors to have greater access to buying authorities to report poor payment performance.

Further requirements mean suppliers will have to advertise subcontracting opportunities via the government’s Contracts Finder procurement website. They will also have to provide the government with data showing how businesses in their supply chain, including small businesses, are benefiting from supplying to central government.

In addition, each government department has been directed to nominate a minister as small business champion.

No timetable has been given for implementation of the proposals.

Cabinet Office minister Oliver Dowden said: “This government is listening to the business community and is committed to levelling the playing field for smaller suppliers to win work in the public sector.

“We have set a challenging aspiration that 33% of procurement spend should be with small businesses by 2022 – and are doing more than ever to break down barriers for smaller firms. Small businesses are the backbone of the UK economy, and play a key role in helping us to build a strong, viable private sector that delivers value for taxpayers and jobs for millions all over the UK.”

Federation of Small Businesses national chairman Mike Cherry said: “Each year, the UK public sector spends over £200bn on goods and services from third parties. As such a large and prominent customer in the economy, the government has a pivotal role to play in demonstrating what it is to be a good client.

“It is right then that the government today announces, as part of a new package to boost SME procurement, that it will clamp down on poor payment practice throughout public procurement supply chains. Companies who pay late should not be rewarded with public sector contracts. 

We need a robust public procurement process that holds larger companies to account for their payment practices.”

The Specialist Engineering Contractors’ (SEC) Group also welcomed the proposals. SEC Group chief executive Rudi Klein said that he was particularly pleased by the government’s promise to exclude poor payers from government procurement.

“We have been urging the government to introduce a yellow/red card system for a long time. The yellow card is a warning to improve payment performance and the red card excludes a continuing poor performer from bidding for government contracts for a period of 2 to 3 years.”

Rudi Klein added that if such a system had already been in place Carillion would have been excluded from government contracts.

However SEC Group believes that on payment security the government needs to go further and legislate to require that project bank accounts are put in place for all public sector projects. It also wants the government to back the Private Member’s Bill (now in the House of Commons) that will protect cash retentions.

“The Carillion debacle has revealed the appalling level of abuse heaped on construction supply chains,” Rudi Klein said. “We should also be considering the introduction of a statutory regulator to challenge the behaviour of large firms and, if necessary, fine them in the worst cases of abuse.”

Source: The Construction Index