Vol. 147, No. 25 — December 4, 2013
SI/2013-121 December 4, 2013
JOBS, GROWTH AND LONG-TERM PROSPERITY ACT
Order Fixing January 1, 2014 as the Day on which Sections 441 to 443 of the Act Come into Force
P.C. 2013-1249 November 21, 2013
His Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to section 444 of the Jobs, Growth and Long-term Prosperity Act, chapter 19 of the Statutes of Canada, 2012, fixes January 1, 2014 as the day on which sections 441 to 443 of that Act come into force.
(This note is not part of the Order.)
To set January 1, 2014, as the date on which the provisions of Division 23 of Part 4 of the Jobs, Growth and Long-term Prosperity Act come into force.
To bring into force the repeal of the Fair Wages and Hours of Labour Act.
The Fair Wages and Hours of Labour Act (the Act) was enacted in 1935. It stipulates that all persons employed by a contractor doing work on a federal government contract for construction, remodelling, repair or demolition of any work must be paid at least “fair wages.” “Fair wages” are defined in the Act as wages that are generally accepted as current for competent workmen in the district in which the work is performed. In practice, the fair wages applicable to workers on federal construction contracts vary widely, as many different occupations and skill levels are covered by the provisions. The Act holds contractors financially responsible if any of their subcontractors fail to pay fair wages.
The Jobs, Growth and Long-term Prosperity Act received Royal Assent on June 29, 2012. Division 23 of Part 4 of this Act repeals the Fair Wages and Hours of Labour Act on a day to be fixed by order of the Governor in Council. A consequential amendment removes a reference to the Fair Wages and Hours of Labour Act in the Campobello-Lubec Bridge Act, which falls under the authority of the Minister of Public Works and Government Services Canada (PWGSC).
There has been no reaction from provincial or territorial governments to the repeal of the Fair Wages and Hours of Labour Act either when the Jobs, Growth and Long-term Prosperity Act was proposed or since it received Royal Assent. Employment and labour regulations in the construction industry fall under provincial jurisdiction and in many respects, the Act duplicates existing provincial and territorial labour legislation (employment standards, occupational health and safety, and human rights) under which these workers are covered. The Government of Canada considers that it is more appropriate for the federal government to let provinces and territories determine on their own how to regulate wages and other working conditions in the construction sector.
Also, construction workers remain covered by any applicable collective agreements in place as certain employers in the construction industry are unionized. Their employees would receive the negotiated wages, which have generally been higher than the established fair wage rates. For non-unionized employees, the market will determine wage rates, which will likely fluctuate based on supply and demand. The rates may actually be higher than fair wage rates, as these often lag behind market rates, since some fair wage schedules were established on four- to five-year intervals.
Provincial and territorial governments have the authority to intervene if they believe that there is a need for further regulation of wage rates or other working conditions in the construction industry.
The repeal of the Act would not have any financial implications for the federal government, as it is the employer’s responsibility to ensure that fair wages are paid to their employees.
On a go-forward basis, the rights and obligations acquired under an existing contract to which the Act had applied will not be affected by the Act’s repeal. This means that existing construction contracts that contain Fair Wages and Hours of Labour Act requirements will not be reopened; the elimination of these requirements will only apply on a go-forward basis as new contracts are signed. Any outstanding fair wages complaints will be addressed as they would have been before the repeal of the legislation.
In July 2011, the Minister of Labour held a National Roundtable on Fair Wages and Hours of Labour in Calgary, Alberta, which involved various stakeholders representing employers and employees involved with federal construction contracts. The union and construction employer representatives in support of the repeal felt that the federal fair wages legislation was no longer required, was costly to administer and that the construction industry was already a high-paying industry which subscribes to extended health benefits and pensions. It was also felt that the provinces and territories were doing a better job at regulating wages than the outdated Act and that construction is an industry which should be regulated under provincial jurisdiction as a matter of constitutional principle. It was felt that the focus of the Act on only the construction industry is unfair to employees in other industries working on federal contracts.
Some union representatives held that repealing the Act would cease to protect construction workers’ wages and anticipated that the repeal of the Act would lower wages. Additionally, concern was raised that the construction industry would be left unprotected if the Act were to be repealed.
In 2011, the Minister of Labour and the Red Tape Reduction Commission received feedback from construction companies about the regulatory burden imposed by the Act. Amongst other issues, it was emphasized that the legislation requires employers in the construction industry to comply with both federal and provincial employment legislation, with respective record-keeping requirements, amongst other duplicate requirements. The repeal of the Act addresses these concerns.
Labour Standards and Wage Earner Protection Program
Human Resources and Skills Development Canada
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