An average of 53 to 87% higher labour and productivity costs
MONTREAL, Jan. 18 /CNW Telbec/ - If the Québec government decides to
fully subject work pertaining to the installation, maintenance and
repair of production machinery in factories to regulations of the Law respecting labour relations, vocational training and workforce
management in the construction industry (Act R-20), it would lead to an average of 53 to 87% higher labour and
productivity costs. This would represent an overall annual increase
varying between $68 and $275 million for the province's job providers.
This is the main finding in an independent study conducted by the KPMG
firm on behalf of the Quebec Employers Council that was released today.
To avoid any controversy, it must be noted the averages were calculated
without using the largest gap of 260 and 304% reported in the study.
These are actually very conservative estimates because the economic
data used covers the recent recession period, when there was a downturn
in private investments.
The study was conducted in consideration of the pressure exerted by
industrial trade unions in the construction sector in an effort to
force the government to ensure more of the work projects related to
production machinery in factories are subjected to the law. This
pressure led to the creation of a work committee, whose report was
issued last fall (Mireault report).
"The KPMG study clearly indicates that subjecting work relating to
production machinery in factories to Act R-20 would lead to a marked
increase in costs for job providers in Québec," stated Yves-Thomas
Dorval, the president of the Quebec Employers Council. "At a time when
the government is looking to provide employers with the best possible
conditions to attract and hold on to private investment that is needed
to create wealth, it must avoid going this route at all costs because
it would send a negative signal to current and potential investors and
would have a disastrous effect on Québec's public finances and our
Adopted in 1968, Act R-20, which regulates labour relations in Québec's
construction industry, obligates businesses that are subject to the law
to operate in compliance with regulations that run counter to the needs
of job providers, particularly in terms of the compartmentalizing of
trades, union placement and work conditions. The latter are the result
of collective bargaining agreements between the associations
representing the construction entrepreneurs and the unions, with the
job providers taking no part in the negotiations, even though the law
obligates them to absorb the costs (salaries, social benefits, bonuses
and additional expenses).
KPMG conducted a comprehensive study with six major job providers
representing various industrial sectors and areas of activity in the
province to measure the impact that subjecting production equipment
work to the regulations would have on each company. This approach,
which takes results by work stages and the type of costs into
consideration, allows one to isolate costs billed to the job provider
on an hourly basis (salaries, bonuses, profit margins and other
expenses) from those related to a potential loss of productivity. From
the resulting differentials, KPMG was then able to do impact analyses
at the industry level depending on different scenarios, based on the
economic and public data contained in the Mireault report, and by using
the hours reported to the Québec Construction Commission.
Maintain freedom of choice or thoroughly update Act R-20
The Quebec Employers Council actively led a series of consultations on
the subject in the spring of 2010. Following the consultations, the job
providers' consensus position on the issue was presented to the major
elected officials and high-ranking public servants at a series of
meetings the Quebec Employers Council coordinated throughout the summer
and fall of 2010. This study is a complement to the series of meetings.
"Along with the unproductive costs related to specific regulations in
the construction sector that exist only in Québec, such as mandatory
unionization, union placement of the labour force, the high amount of
compartmentalized trades and the presence of a worksite union delegate,
job providers have no voice in negotiations for new collective
bargaining agreements in the construction sector, even though, in the
end, they are the ones paying the bill," said Mr. Dorval. "In this
context, at the very least they should be allowed to maintain their
freedom of choice in conducting work related to production machinery.
Otherwise, it's time to move ahead with extensive reform of the entire
labour relations system in the Québec construction industry so that
some of the aberrations can be corrected. The ball is now in the court
of the Labour Minister, Lise Thériault.
"Such a reform would help to improve the situation in the overall
construction sector, and not just regarding production machinery in the
industrial sector. As the main job provider in Québec, the government,
with its corporations and agencies, would be the main beneficiary,"
added Mr. Dorval.
The KPMG study and the job providers' statement are available on the
Quebec Employers Council website (www.cpq.qc.ca).
The Quebec Employers Council brings together many of Québec's largest
companies and the vast majority of sector-based employers' groups,
making it Québec's sole employer federation.
SOURCE CONSEIL DU PATRONAT DU QUEBEC
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