Friday, May 5, 2023

My Message to Contractors

Is a 10 percent increase in the first year a reasonable contract demand?

By Andrew Regnerus, Ontario Construction Coordinator

I was the bad guy on the panel. If anyone were to aggravate the audience, it was likely me. Where was I? Here’s the context.

The event: I was speaking to contractor executives at the Progressive Contractors Association (PCA) annual roundtable in Toronto.

Our topic was on labour relations and owner relations. (“Owner” here refers to the buyers of construction, AKA proponents. They are the clients, project owners for whom the contractors work). These construction contractors employ our members.

The audience: just under 50 contractor types who employ CLAC members.

The panel: a management-side senior construction labour lawyer generally representing contractors, a labour relations strategist generally representing the owner point of view, and PCA’s president. The moderator was from a conservative think tank.

Although I was the black sheep—representing workers—I knew everyone on the panel and felt safe. I was up for the challenge.

The moderator’s instruction was to make it “spicy,” that is, to capture audience interest, create controversy, have fun. Don’t let them sleep or leave the room.

Message #1: Pay Rates Are Market Determined

With that interest in mind, the first question came to me: Is a 10 percent increase in the first year a reasonable contract demand?

I said, “It might be. If you’re paying $20 per hour, a 100 percent increase is warranted!” My message to the contractors in the room is that your pay rate is relative to benchmarks and comparators, and adjustments are determined by the market.

Message #2: The Economic Value of the CLAC Model

The owner strategist took a page out of the CLAC playbook. He spoke about the intrinsic value of work—workers find meaning in building important things, in teamwork, etc. They work not just for the pay.

My cue as CLAC representative was to reply about the economic value of CLAC: having determined (and the panel had) that multiskilling, wall-to-wall bargaining units, and other CLAC advantages provide a competitive advantage, CLAC collective agreements could be leaders in unionized construction.

Message #3: The Darwin Effect

Building on the CLAC advantage, I pondered aloud how two contractors in the same market could have a large wage gap. I suggested that in multi-employer union collective agreement models, the Schedule A rates apply to all contractors, and all must follow.

Inefficient contractors sharpen their pencils or close their doors. The strong survive.

In contrast, I said, with the CLAC practice of employer-specific collective agreements, the “weak” make the worker pay for their inefficiencies. They pay a lower rate to make their margins.

Most of the contractors were nodding in agreement. These are the more progressive contractors, after all. They know that they need to keep favourable terms and conditions to recruit, retain, and preserve the labour relations model that we enjoy.

Message #4: Conclusion

The big challenge to CLAC and PCA came from the labour relations strategist. In his view, CLAC and PCA could do more to leverage their advantages. The unique model of labour relations that serves workers well can spread much beyond the 260 contractors and 8,000 members in Ontario today.

PCA and CLAC take that challenge seriously and have created a taskforce to look specifically at those recommendations. We want good labour relations to spread, we want our influence to grow, and we want to provide many more opportunities to members in Ontario construction.

My Message to Contractors

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