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Home My WebLink AboutCOD-015-05 . ~!~mglOn REPORT CORPORATE SERVICES DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Date: March 29, 2005 Report #: COD-015-05 File#_ (~c:. ju,(lJl / fp'-/- (): By-law # Subject: Fair Wage Schedule Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report COD-015-05 be received for direction and information; and 2. THAT Council adopt either option A or option B as identified in the body of this report with respect to a "Fair Wage Policy" ",,,"_ bYO~ arie Marano, H.B.Sc., C.M.O. Director of Corporate Services Reviewed bY{) J ,..f f2-,:::- ~ Franklin Wu, Chief Administrative Officer MM\LAB\cw 1201 REPORT NO.: COD-015-05 PAGE 2 BACKGROUND AND COMMENT In November, 2002 Council approved report COD-56-02 (see schedule "A" attached) which re-confirmed the practice of not utilizing a "Fair Wage Policy". Staff have since been requested to do further investigation on this subject. Since the time of report, staff have had discussions and obtained input from the following Municipalities who currently have a fair wage policy: . City of Toronto . City of London . City of Thunder Bay . City of Oshawa . City of Hamilton Further input has been obtained either directly or indirectly from: . Universal Workers Union . Totten Sims Hubicki Associates . Small non-unionized contractors In addition to the disadvantages outlined in report COD-56-02 the following concerns were raised: - the relationship between the unionized contractors and non-unionized remains very adversarial with both parties making claims of unfair practices. - the issue of interpretation of the correct job classification and corresponding rate is difficult to manage and is frequently challenged. non-unionzied contractors provide their staff with many benefits not offered by unionized ie; use of vehicle, longer employment term, (some unionized staff hired 1202 REPORT NO.: COD-015-05 PAGE 3 on a per job basis versus non-unionized staff retained for approximately 10 months per year). Consequently, the fOllowing two options are provided for Council direction: Option A That Council re-confirm its' current practice of not utilizing a Fair Wage Policy in order to maximize local competitive opportunities. OR Option B a) THAT Council adopt in principle a "Fair Wage Policy; b) THAT staff be authorized to work in co-operation with the various Trade Unions, the Durham Construction Association and the City of Toronto Fair Wage Office to develop a Fair Wage Policy and corresponding Fair Wage Schedule. c) THAT a Fair Wage Policy be brought back to Council for approval; and d) THAT the Fair Wage Policy apply to building construction only in cases where the estimated total budget exceeds one million dollars ($1,000,000.00). e) THAT the Fair Wage Policy be implemented on a complaint basis only and that the contractor making the claim be charged an administration fee which is refundable only if the claim proves to be valid; and f) THAT staff be authorized to send a written request to the City of Toronto Fair Wage Office to provide auditing services for Fair Wage Compliance on an as needed and cost recovery basis. Due to the many issues surrounding a Fair Wage Policy as well as the associated administrative costs, staff have had initial discussions with the City of Toronto with respect to their Fair Wage Office Staff providing assistance. Subject to receiving a written request from the Municipality of Clarington as well as approval by the City of Toronto Council, the Toronto Fair Wage Office is willing to provide assistance by performing the required audits whenever a complaint is received by Clarington. If this 1.2 !] 3 REPORT NO.: COD-015-05 PAGE 4 service is to be provided they would also require input in the development of Clarington's Fair Wage Policy. As a Fair Wage Policy may have an impact on the number of construction projects won by Clarington's small to mid size contractors, it is recommended that any proposed policy be applicable only to construction projects exceeding one million dollars. Even at this limit there are still a couple of local contractors that this will impact. Lastly, it is further recommended that any proposed Fair Wage Policy be implemented on a complaint basis only and that the contractor making the claim be charged an administrative fee based on the cost of performing the audit. His fee would be refunded only if the claim proves to be valid. This procedure would discourage and would, thereby, reduce frivolous claims. Should the fee become refundable, the Municipality would then incur the cost for the City of Toronto audit services which would be charged to the Municipal budget. While this cost would vary depending on the time required for the audit, it is estimated to be up to $1500.00 per audit. It is anticipated that with option B, it will require a significant amount of staff time to administer and co-ordinate. Should Council select option B, once staff has received input from the various parties identified in the recommendations of this report, a further report and proposed Fair Wage Policy would be brought back to Council for approval. CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T(905)623-3379 F (905)623-4169 1204 t;!~mgron SCHEDULE "A" REPORT CORPORATE SERVICES DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Date: November 18, 2002 Report #: COD-56-02 File#_ By-law # Subject: Fair Wage Schedule Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report COD-56-02 be received for information; and 2. THAT Council confirm its current practice of not utilizing a "Fair Wage Policy" Submitted by: Marie Marano, H.B.Sc., C.M.O. Director of Corporate Services Reviewed by: Franklin Wu, Chief Administrative Officer MM\LAB\km 1205 REPORT NO.: COD-56-02 PAGE 2 BACKGROUND AND COMMENT Over the past couple of years the Municipality of Clarington has been approached by various construction Trade Unions, and most recently by the Universal Workers Union, for consideration of the implementation of a "Fair Wage Policy" in all municipal construction contracts. The current practice of the Municipality is to not utilize a "Fair Wage Policy". A Fair Wage Policy stipulates to contractors bidding, the contract hourly rates that they are to pay to their various sub-contractors. The purpose of it is to produce some equity and compromise between those contractors using organized versus unorganized labour. The drawbacks of a Fair Wage Policy can be summarized as follows: . difficult to establish labour rates and classifications acceptable to all parties; . difficult, time consuming and costly to enforce · may require additional staff resources to monitor adherence to the policy . may restrict local competition that is not unionized . may arbitrarily increase prices The goal of the Municipality is to optimize our financial resources. In order to accomplish this our tendering practices must be open and competitive for us to obtain the greatest value for the dollars being expended and meet our objective of running cost effectively. Staff have surveyed all Municipalities within the Region of Durham and have found that the City of Oshawa is the only one who currently has a Fair Wage Policy, The City of Oshawa Purchasing By-law includes the following clause: "3.08 In the case of all City construction contracts the Contractor shall be required to payor cause to be paid to each person employed in the contract work (including persons employed by Sub-contractors) at least minimum union rate of wages for employees of such class prevailing in Oshawa from time to time during the execution of the work, or if there is no applicable union rate, the prevailing rate of wages in Oshawa for employees. The rates established by the City of Oshawa vary and are based on a percentage of the union rates established in the specific zone for the representative classification, as determined by the Ontario Ministry of Labour. 1206 ; REPORT NO.: COD-56-02 PAGE 3 The most aggressive use of a fair wage policy is by the City of Toronto, who actually have a "Fair Wage Office" with four (4) full time staff members. II is the responsibility of these staff to ensure the policies are enforced and to investigate any cases of non-compliance. The only other Municipality in Ontario known to have a "Fair Wage Policy" is the City of London. In summary, it is staff's opinion that to implement a Fair Wage Policy within the Municipality of Clarington would not be in the Municipality's best interest at this time. CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1 C 3A6 T(90S)623-3379 F (905)623-4169 1207