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Contractors Fear Sector 'Tailspin' From Act Reforms

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The proposed Employment Act reforms could send the construction industry “into another tailspin”, the Bahamian Contractors Association’s (BCA) president warned yesterday, adding that they would inevitably increase costs for consumers.

Godfrey Forbes told Tribune Business that, while the BCA was set to develop its formal position on the reforms at a meeting next week, the construction industry was already concerned about proposals for a mandatory one-hour lunch break and paying hourly staff for holidays not worked.

Pointing out that the sector’s labour costs would inevitably increase if the reforms passed as is, Mr Forbes said the rises would be passed on to consumers - both residential and business - in the form of increased construction costs.

The BCA president said normal Bahamian construction industry practice was not to pay workers for lunch breaks, which typically lasted for 30 minutes as opposed to the mandatory full-hour.

And, given that many skilled trades, such as masons, carpenters and plumbers, were paid an hourly rate, the construction industry was now faced with paying them for unproductive time - namely public holidays when they are not working.

“We definitely have some concerns about what they’re proposing,” Mr Forbes told Tribune Business. “The work week is going to be maintained at 40 hours per week, but that’s inclusive of lunch time.

“For contractors generally, we go ahead and give employees in the field a 30-minute lunch break. If you say, no, by law give employees a lunch break of one hour and pay them for it, we will have a problem. This is not something we usually pay them for.”

Mr Forbes added that paying workers to work through their lunch period was often used by Bahamian contractors as a special bonus or incentive, but this would be eradicated if the Employment Act was amended to require that break periods be paid by law. The industry would now be forced to develop new incentives.

And the requirement to pay workers their basic wage for public holidays - even if not on the job - was set to impose a further cost burden on the Bahamian construction industry.

“Currently, we don’t have to pay them for it,” Mr Forbes said. “All of this, things like that, are definitely going to cause the industry to become more expensive for consumers.

“The consumers are going to have to come up with more money, as the contractors will not absorb all of that and let the consumers get away with it. They will have to pass it on.”

Noting that the Bahamian construction industry was only now beginning to show modest signs of recovering from the recession, Mr Forbes told Tribune Business: “When that [cost increase] happens, you are going to find the industry slows down even more.

“The industry has begun to come back a bit, but if this becomes law the industry will go into a tailspin all over again.

“You’re going to find some issues if this becomes law. Everything that they propose to go ahead and put forward is definitely going to impact the construction industry and customers as well.”

The BCA president’s comments add to the long list of concerns expressed by Bahamian employers and businesses over the proposed Employment Act reforms.

Apart from being fundamentally opposed on principal to paying for unproductive time (a mandatory paid lunch hour), employers believe that including this in the definition of the ‘40-hour work week’ effectively reduces it by five hours to 35 hours.

Essentially, they are arguing that by increasing labour/hiring costs the proposed Employment Act reforms are counterproductive, coming at a time when reducing the official 15.9 per cent unemployment rate should be the priority.

The added cost burden, employers say, works against this by reducing the incentive for the private sector to hire additional workers, while creating logistical/staff management difficulties for businesses based on shift and/or hourly paid work.

The Bahamas Chamber of Commerce and Employers Confederation (BCCEC) identified construction, along with retail, tourism and hotels, and the fast food business, as being the sectors most impacted by the likely Employment Act reforms.

Meanwhile, Mr Forbes recalled that the Bahamian construction industry was “in a sense, caught off guard” when the Employment Act was implemented in 2001 by its severance pay obligations.

Due to its ‘stop-start’ nature, with firms sometimes unable to immediately move to a new project when the current one finished, the construction sector often found itself making staff redundant.

The BCA president said this was often not factored into bid prices submitted by contractors, and he added: “We’ve had situations where all these employees had to be let go when a job came to an end, and there was nothing more to go to.

“You can have a pretty good run of six-eight years, and it comes to the point where it phases out and levels off, and you find you have to lay staff off.

“Speaking about it personally, I’m still trying to recover. At one point in time I had 26-28 staff working for me, and I had to lay them off until only two-three were left.

“When you factor in severance pay for all of them, I almost couldn’t do it.”

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