Vol. 147, No. 25 — December 4, 2013
SOR/2013-204 November 22, 2013
FAIR WAGES AND HOURS OF LABOUR ACT
Regulations Repealing the Fair Wages and Hours of Labour Regulations
P.C. 2013-1251 November 21, 2013
His Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to sections 6 and 7 of the Fair Wages and Hours of Labour Act (see footnote a), makes the annexed Regulations Repealing the Fair Wages and Hours of Labour Regulations.
REGULATIONS REPEALING THE FAIR WAGES AND HOURS OF LABOUR REGULATIONS
1. The Fair Wages and Hours of Labour Regulations (see footnote 1) are repealed.
COMING INTO FORCE
2. These Regulations come into force on the day on which section 441 of the Jobs, Growth and Long-term Prosperity Act, chapter 19 of the Statutes of Canada, 2012, comes into force.
(This statement is not part of the Regulations or the Order.)
The Jobs, Growth and Long-term Prosperity Act (JGLTPA), which received Royal Assent on June 29, 2012, repealed the Fair Wages and Hours of Labour Act (the Act) on a day to be fixed by order of the Governor in Council. Once the repeal of the Act comes into force, the Fair Wages and Hours of Labour Regulations (the Regulations) will have no legislative authority.
The Fair Wages Policy Order (the Policy Order), although still technically in force, has not been enforced since 1935 because both Government and construction industry stakeholders had instead been complying with the Act and the Regulations. With the repeal of the Act, some stakeholders might believe that the requirements of the Policy Order would again be enforced, which is not the Government’s intent.
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,” defined in the Act as wages that are generally accepted as current for a competent worker in the district in which the work is performed. The Act holds contractors financially responsible if any of their subcontractors fail to pay fair wages.
The Regulations were made under the Act and required contractors to comply with provincial statutory hours of work provisions, pay overtime work at the rate of 1.5 times the fair wage rate and ensure that there is no discrimination in hiring.
The Policy Order was enacted by royal prerogative in 1922, to be observed by all departments with respect to federal contracts for construction or remodelling of public buildings or for the manufacture and supply of fittings for public buildings. The Policy Order set the fair wage conditions which were inserted into federal construction contracts. While the Policy Order was not repealed, it has not been operational since 1935, when the Act and the associated Regulations came into force. All parties had, instead, been adhering to the requirements of the Act and the Regulations.
The JGLTPA repealed the Act. A consequential amendment removes a reference to the Act in the Campobello-Lubec Bridge Act, which falls under the authority of the Minister of Public Works and Government Services Canada (PWGSC). As a consequence of the repeal of the Act, the Regulations have become “spent,” meaning that they no longer have effect.
The Act was repealed because
- (1) the legislation outlived its usefulness and a special regime is unnecessary for workers that are generally paid well, are unionized and have access to benefits (e.g. since 2006, the federal Labour Program has registered very few complaints related to wages paid under federal construction contracts);
- (2) fair wages are often lower than the wages that the market is willing to pay, because the wage schedules are updated every four years, making them lag behind the market rates; and
- (3) employment and labour regulation in the construction industry falls under provincial jurisdiction and, in many respects, the Act duplicates existing provincial labour legislation under which these workers are covered.
The objective of the proposal is to avoid confusion about the wage requirements that apply to Government construction contracts, given that the Act is being repealed.
The Fair Wages and Hours of Labour Regulations and the Fair Wages Policy Order are repealed.
The “One-for-One” Rule applies to these repeals.
The repeal of the Regulations will result in a reduction in the administrative burden for the stakeholders, i.e. the construction industry employers working on federal construction contracts. According to Statistics Canada’s Capital and Repair Expenditures Survey, total federal construction accounts for 2% of the 173 000 businesses in Canada’s construction industry. Therefore, it can be estimated that approximately 3 470 businesses work on federal construction contracts. It is estimated that the repeal of the Regulations will result in annual savings of $912,294 for the 3 470 businesses. This would represent approximately $263 of savings per stakeholder. This calculation is based on the estimated stakeholder costs associated with the administrative requirements of complying with the Regulations (e.g. posting schedules of fair wage rates, keeping books and records, and meeting with inspectors). In addition to the monetized decrease in administrative burden, the repeals of the Regulations and the Order result in a removal of two titles under the “One-for-One” Rule since they repeal two statutory orders and regulations.
Small business lens
The small business lens does not apply to these Regulations, as there are no costs to small business.
With the repeal of the Act, the Regulations will no longer have any enabling statutory authority.Their continuing existence will cause confusion amongst the construction companies, who have administrative obligations imposed by the Regulations.
The Policy Order has not been implemented since the Act came into force and it is not the Government’s intent that it be applied.
Repealing the Regulations and Policy Order removes any confusion as to whether or not they are in force and must be followed.
Implementation, enforcement and service standards
Existing contracts to which the Regulations had been applied will not be affected, and the terms of those contracts will continue to be respected. Future contracts will no longer include the fair wages provisions that had applied under the Regulations. Employers in the construction industry will continue to be subject to provincial (or territorial) employment standards, occupational health and safety rules, and human rights legislation.
The Treasury Board of Canada Secretariat and all contracting authorities will be informed of the coming into force of the repeal of the Act, the Regulations and the Policy Order.
Labour Standards and Wage Earner Protection Program
Human Resources and Skills Development Canada
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