Labour pains : Laying the foundation for P3 project success

By Sandra Goodwin October 18, 201818 October 2018

Labour pains : Laying the foundation for P3 project success


Since labour is a significant cost for public-private partnership projects, employers need to implement a strategy well before they break ground – and the time required can be lengthy. That was the message coming from a veteran panel of labour and employment lawyers at the Canadian Bar Association’s Construction and Infrastructure Law Conference in Halifax in October.

A proper strategy maps out everything from labour relations and human resource standards to worker acquisition and productivity – months and sometimes years in advance. “You can’t bring in temporary foreign workers overnight,” said moderator Greg Anthony, a lawyer at Cox & Palmer in St. John’s. “How will you ensure you have the workers you need?” He said a labour acquisition plan is one of the most important components of that strategy.

For Walter Thornton, of Matthews Dinsdale & Clark LLP in Toronto, the strategy becomes a risk management plan covering three areas: financing, maintenance, and operations. “Risks can be significant, and sometimes difficult to spot,” he said. “But if you’re talking about risk management, you don’t want to be employing any resources not covered by a collective agreement.”

Public-private partnerships  — or P3s — offer alternative means to government agencies looking to finance major infrastructure projects. “Options are good, but restrictions are bad,” says Thornton.

He said the involvement of the public authority is the reason P3 projects have so many conditions around labour force. “Those criteria have to be identified early,” he said, adding that despite efforts to create workaround structures like subcontract models or direct labour companies, “if employers aren’t covered by a collective agreement, it won’t last.”

Collective bargaining obligations brought by each partner to a P3 project represent one of three minefields, according to Thornton. “Each partner has to disclose the collective bargaining obligations,” he said. “And competitors in a joint venture will not be keen to disclose everything. It’s like when chef Gordon Ramsay speeds through the ingredients but doesn’t give you the amounts.”

He noted the other minefields as the labour compatibility conditions mentioned, as well as maintenance and operations requirements after project completion. “You don’t want to leave the project with more obligations than you had going in.”

Brad Proctor, partner at McInnes Cooper in Halifax, pointed to special project legislation as another planning tactic to engage when different regions and trades have equally different unions and collective agreements. “Special project legislation enables a company to declare a P3 project as a special project,” he said. “It provides one set of rules for the life of the project.”

He said that when applying to have a project declared as a special project, the provincial government looks at social impact factors such as hiring from indigenous communities and hiring women in trades. He argued that obtaining the special project status is well worth the time and effort. “It stamps out all of the collective agreements within that geographic location,” he said. “And any contractor that joins would fall under that special project collective agreement.”

On the foreign worker front, too, long-term advance planning is crucial. Karen Bennett-Clayton, a partner at Stewart McKelvey in Halifax, said that it’s best to assume a foreign national coming into Canada will require a work permit. “There are some exceptions, but make the assumption that you need one, and the time to acquire it,” she said. “If you get a positive Labour Market Impact Assessment (LMIA) decision, that’s what you use to bring in the foreign national.”

She explained it can take months to get the LMIA decision because the employer needs to advertise for the position for a minimum of one month to demonstrate a search for Canadian candidates. She added that once acquired, the LMIA still has limitations. “It’s difficult to get renewed. It’s role-specific, location-specific and project-specific,” she said.

Bennett-Clayton noted that one option involves applying under the professional category within Canada’s trade deal with the European Union (CETA) or the revamped NAFTA agreement (USMCA). She listed other options as the post-graduate Open Work Permit, which she said is so rare it’s “like gold dust,” and the Business Visitor Exception, which is limited to short-term visits by foreign nationals that are professionals or part of management.

Summarizing that a labour strategy covers everything from financial and operational risk to collective agreements and labour acquisition, Anthony said one question remained. “Who has the responsibility?” he said.

Proctor said it varies across jurisdictions, adding that responsibility can be decided by the courts. “In construction sites, there is a lot of variability, especially when dealing with occupational health and safety issues,” he said. “Depending upon the province, designations could include ‘prime contractor,’ ‘principal contractor’ or ‘constructor.’” He said courts can be willing to disregard contracts made, then decide upon a designation to assign responsibility. “All the more reason to have a labour strategy from the outset.”

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