Lecture 1: Labour and Industrial Relations in Construction (BCEE 491-2/BLDG 6811-2)

LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL LECTURE # 1 THE CANADIAN CONSTRUCTION INDUSTRY 1  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION...

LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL LECTURE # 1 THE CANADIAN CONSTRUCTION INDUSTRY 1  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL LECTURE #1 THE CANADIAN CONSTRUCTION INDUSTRY 1. INTRODUCTION Construction, Canada's largest industry, employs more than 1.5 million men and women ( About 1 in every 14 Canadians worked in the construction industry). In Canada, the industry accounted for 7.0% of Canada’s Gross Domestic Product (GDP). It is, in fact, the fifth largest construction market in the world and expected to grow to 8.5% by 2024 making Canada’s construction sector worth $ 355 billion US. It is both a production industry and a service industry, part of a total of approximately $ 11 trillion global construction industry. It is anticipated that the Canadian construction industry will need to find some 400,000 new workers by 2024 to keep pace with demand and replace retirees during this intervening period. Construction labour relations in Canada come under provincial jurisdiction, to be governed by ten different series of laws applicable to the local jurisdiction of the construction work to be carried out. The industry has implemented highly disciplined health and safety protocols on construction sites and at manufacturing facilities to respond to COVID-19 impact, with new measures based on recommendations from governments and public health authorities. Developers of commercial, residential projects typically use Design-Bid-Build (DBB) delivery approach for their projects whereas industrial owners rely increasingly on Design-Build, EPCM (Engineering, Procurement, Construction, Management) turn-key approach, etc. The application of overall project management procedures/methodologies in all categories of construction projects in which involvement of construction labour plays a pivotal role. 2  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL 1. INTRODUCTION ( Cont’d) Delivery of construction projects using Design-Build (DB), instead of the traditional Design-Bid- Build (DBB), has been steadily increasing for the last 30 years ,e.g., large scale hydroelectric power projects (Churchill Falls, James Bay), Oil and Gas projects (Hibernia, XL Pipeline), etc. The construction industry has the largest number of on-the-job fatalities of any industrial sector, e.g., construction sites in Quebec account for 20% of the workplace deaths despite employing only 4% of the province’s work force. General contractors assume responsibility for the co-ordination of construction activities and completion of the project. Trade or specialty contractors, employing trade workers, perform work related to the various trades, e.g., mechanical, electrical, carpentry, piping, etc. Manufacturers and suppliers engage in the production and merchandising of thousands of construction items. Employers’ associations and labour unions are mostly organized and operated on the national, provincial and local levels. The building trades unions were organized along craft lines Construction mobility of workers has decreased due to COVID impact, digital tools, etc. Project delays are normally created by miscommunication of up-to-date information. 3  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL 2. DEFINITION Construction is not just a matter of on-site activities of installing materials, components, and capital equipment or of changing the landscape. It also includes conceptual, research and development, exploration, design, manufacturing, supply, testing and many other activities, forming part of the construction process. Two major construction project classifications:  Industrial Projects: Capital investment resulting in production of goods (including energy) to help grow our economy and compete in world market ,e.g., petroleum refineries, petrochemical plants, mine development, smelters, steel mills, aluminum plants, nuclear power plants, etc.  Infrastructure Projects: Transportation system, housing complex, communications system, commercial office/apartment towers, educational facility, etc. and other projects carried out to support industrial activities. 3. CONSTRUCTION: THE CAPITAL PROJECTS REALIZATION INDUSTRY When the construction industry's capacity is in a growth mode, there is tangible evidence that the economy is healthy, and vice versa. The pursuit of excellence results in more specialization and the development of specialized project management skills to be applied to project activities to meet the project requirements. 4  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL 4. CHARACTERISTICS OF THE CANADIAN CONSTRUCTION ACTIVITIES Major technology trends that are driving the current industrial revolution reflect the fact the world believes will forever alter how we do business and live our lives. The construction industry usually reflects a true picture of the demographic and economic situation of Canada., i.e., the distribution of construction value for total work performed, presents much the same pattern of this characteristic. International bidding will become more intense. Foreign owners tend to award contracts to join- venture Canadian groups of design professionals, manufacturers and contractors. Project financing and risk management from Canada must be competitive with those available to members of the construction industry of other nations. Energy-oriented industrial projects in western Canada, e.g. Oil & Gas, pipelines, anticipated to increase in the coming years due to the increase in crude oil costs caused by the impact of the war in Ukraine. This, however, will eventually decrease to meet efforts in fighting global warming. Construction productivity improvements is a compelling, on-going goal. Good labour relations on-site is pivotal. It affects time and cost management as well as the quality of the final products. Mega projects can have a tremendous influence on labour relations pertaining to productivity. 5  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL Cumulative Effect of Overtime on Productivity 50 and 60 Hour Workweeks 1.0 0.95 0.90 50 Hour per Week 0.85 Productivity 0.80 0.75 0.70 60 Hour per Week 0.65 0.60 0.55 0.50 1 2 3 4 5 6 7 8 9 10 11 12 13 Week 6  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL 5. GOVERNMENT REGULATIONS & ASSOCIATIONS: The construction industry's members' operations are subject to myriad regulations administered by all levels of government, perhaps more than any other industry ,.e.g., environmental regulations, regulations on the development of urban land, etc. Regulations associated with workplace health and safety remain top priorities of the construction industry, and impacted by the COVID-19 pandemic. The construction industry’s organizations are structured according to types of trades, products, projects and services. Employers’ associations, professional societies and labour unions are organized and operated on the national, provincial, regional and local levels. 6. CONSTRUCTION TECHNOLOGY: The increased size and diversity of construction projects have greatly increased the industry's knowledge base and the level of technical and managerial knowledge required of its personnel. It is a fact that the construction industry is among the slowest to adopt new technologies and it is generally assumed that only a fraction of 1% of the industry’s gross revenues is invested in applied research. Updating construction project management processes is a must in boosting productivity and profits, e.g., clear roles and responsibilities, effective resources management, use of best practices. Current technology breakthroughs: Drones, BIM, 3-D Printing, Robotics, Prefabrication, Smart Net-Zero 7 Energy Buildings, Artificial Intelligence (AI). The products of the current fourth industrial revolution.  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL Typical Labor/Management Organization Owner Design Consultant Construction Manager Contractors Project Craft Union Locals Craft Union Internationals Major Construction Project 8  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL Theoretical Bargaining Relationships During Construction Negotiation Construction Employers Coordination Employer Liaison Other Employer Construction Bargaining Bargaining Agencies Owners Group Agency Coordination Union Liaison Other International Local or Unions Craft Union Council Union Members 9  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL 7. INDUSTRY SECTORS: Specialization in particular types of project or work within the different sectors and sub-sectors of the construction industry: a. Exploration & Development Firms: Geophysical exploration firms, drilling contractors, etc. that search for minerals, oil and gas. b. Design Professionals: Architects, Consulting Engineers.. who design construction projects c. General Contractors: Firms acting as prime contractors on construction projects and providing overall coordination and often financial responsibility for project execution d. Trade contractors (Subcontractors): Firms executing construction work, principally related to a single construction trade, under contract to a prime contractor, builder, developer, or the owner e. EPCC/M contractors: Firms providing combined project management, engineering, procurement, construction and commissioning services for industrial projects. f. Construction & Project Management firms: Firms acting on a fee basis as the owner's agent in coordinating either the work of the subcontractors in the construction phase (CM) or also those engaged in the concept, design phase (PM), construction and manage subcontractors. 10  LABOUR AND INDUSTRIAL RELATIONS IN CONSTRUCTION BCEE 491-2 / BLDG 6811-2 Sect LL 7. INDUSTRY SECTORS (Cont’d): g. Specialty Civil contractors: Firms specializing in heavy construction projects such as Dams, Marine structures, generating stations, pipelines, roads, sewer and water installation,.etc.. They usually act as prime contractors. h. Developers: Firms that typically assemble land and funds, provide project management for commercial, residential, institutional, and light industrial building projects. i. Residential builders: Firms that build individual houses or multiple units, usually on a speculative basis and in charge of both the design & construction phases. j. Machinery Designers, Manufacturers and Suppliers: Firms that design, fabricate, and install or supply process, production, and operative equipment and control apparatus associated with the capital projects as well as the construction equipment used to build it. k. Construction Material & Component Manufacturers and Suppliers: Firms that furnish products ranging from individual building materials to preassembled components to prefabricated structures, etc. l. RRR contractors: Firms that do Repair, Renovation, or Retrofit work on existing structures or installations. 11