Bill addresses failure to pay subcontractors for work

Fri, May 11, 2012, 01:00

THE PLIGHT of subcontractors who have not been paid was highlighted by several TDs.

Joe O’Reilly (FG, Cavan-Monaghan) said every public representative in the State could narrate horrific stories about developers refusing to pay subcontractors.

He recalled “heartrending meetings” with subcontractors denied payment. “It often has involved families going without a Christmas or the removal of people’s creditworthiness,” he said. “It also affected their employees right down the line.”

Mr O’Reilly said nobody could exaggerate the gravity of the issue or its impact on people who were often powerless and lacked the resources to take people to court.

Speaking during the resumed debate on the Construction Contracts Bill 2010, Mr O’Reilly said it established a new statutory right to interim, periodic or staged payments. The Bill made clear when those payments were due, the amounts involved and a final date for payment.

Joe McHugh (FG, Donegal North-East) said it was unfortunate that the Bill was not retrospective because it would open up a can of worms.

“In advance of large contractors being awarded contracts, people on the ground knew the companies would go bust but they were still awarded contracts,” he said. “That is an unmitigated, unacceptable and inexplicable disaster.”

Mr McHugh said the extension to Letterkenny General Hospital was a case in point. “Its history will leave a sour taste in many people’s mouths because so many small contractors got burnt in that scheme.”

Brian Stanley (SF, Laois-Offaly) joined with other speakers in congratulating Senator Feargal Quinn for his work in drafting the Bill. “The plight of small and medium-sized building contractors has created widespread hardship for thousands of construction workers, small contractors and their families,” he added.

“Many have fallen victim to the sharp practices of larger companies who, on countless occasions, have failed to honour contracts or pay for the work that was carried out in good faith on their behalf.”

Mr Stanley said that even during the Celtic Tiger some contractors making huge profits often delayed paying small contractors: “Sometimes payments were not paid in full or not paid at all.”

Mr Stanley said things worsened as the recession took hold. “Many large developers and contractors, who were aided by the banks’ casino-like lending policies and their friends in other lending institutions, recklessly overstretched and found themselves in financial difficulties as the housing market collapsed,” he said.

“More often than not, small subcontractors or tradesmen were first to pay the price when large building firms found themselves in trouble.”

Séamus Healy (Ind, Tipperary South) said not one contract in his constituency was being carried out by a local contractor: “One wonders whether it is the case that, almost irrespective of anything else, the lowest tenderer is being awarded contracts.”