Client Update: Special Project Orders the next milestone for Muskrat Falls progress

On June 17, 2013, pursuant to the recently amended Section 70 of the Labour Relations Act for Newfoundland and Labrador (“NL”), the Government of Newfoundland and Labrador issued three Special Project Orders (“SPOs”) in respect of the Muskrat Falls phase of the Lower Churchill Hydro Electric Generation Project (“Muskrat Falls Project”).

For those seeking to do work on the Muskrat Falls Project, familiarization with the SPOs and the referenced agreements is essential.

The SPOs have the effect of displacing the collective agreements negotiated between the Construction Labour Relations Association (the accredited employer in the Commercial Industrial Division of the NL construction industry) and the individual trade unions who represent the tradespersons in that division. They also operate to create a virtually exclusive unionized workplace.

The SPOs and the prescribed Collective Agreements designate three separate work scopes for the Muskrat Falls Project, each with its own collective agreement and an umbrella dispute resolution agreement.

The three work scopes of the Muskrat Falls Project are:

• Lower Churchill reservoir clearing
• Lower Churchill hydro generation
• Lower Churchill transmission

The umbrella agreement for dispute resolution, the Overlap Dispute Resolution Agreement, is designed to resolve disputes where there are overlaps in the work of one or more contractors on two or more of the three separate work scopes of the Muskrat Falls Project.

Care must be taken not to assume that the collective agreements for each work scope of the Muskrat Falls Project follow the pattern of previous SPOs or that all the construction trades are involved with a special project collective agreement respecting a particular scope of work; there are three distinct collective agreements in respect of the Muskrat Falls Project as a whole.

The Special Project collective agreements allow a union or non-union contractor to become involved on the site but, whether union or non-union, a contractor is obligated to acquire its labour in accordance with the applicable Special Project Agreement hiring protocols. The hiring protocols are consistent with the Lower Churchill Construction Projects Benefits Strategy and Lower Churchill Innu Impacts and Benefits Agreement. These agreements ensure priority of hiring for qualified Labrador Innu, qualified Labrador residents and qualified residents of the Island portion of the Province. Unionized contractors may have some flexibility respecting use of their regular unionized employees on the Muskrat Falls Project, but non-union contractors have little to no flexibility in this regard.

The three collective agreements which have been prescribed for the three separate work scopes of the Muskrat Falls Project are:

• Collective Agreement between Muskrat Falls Employers’ Association and the Resource Development Trades Council of Newfoundland and Labrador* (Generating Facility Agreement).
  –  The Trades Council represents all construction trades operating
  in the Province.
• Collective Agreement between Lower Churchill Transmission Construction Employers’ Association Inc. and International Brotherhood of Electrical Workers, Local 1620 (Transmission Agreement).
• Collective Agreement between Lower Churchill Reservoir Clearing Employers’ Association Inc. and Labourers’ International Union of North America and the Construction and General Labourers’ Union, Rock and Tunnel Workers, Local 1208 (Reservoir Clearing Agreement).

It is recommended that clients review, paying particular attention to, the collective agreement related to the scope of the work targeted and, where there exists overlap, the collective agreement relevant to either or both of the work scopes prescribed by the other SPOs. It is also recommended that the Overlap Dispute Resolution Agreement be reviewed in order to fully understand the financial and labour cost implications of work which may involve two or more of the work scopes within the Muskrat Falls Project.

As with previous special projects, a non-union contractor which follows the hiring provisions of the applicable Special Project Agreement(s) does not automatically become a unionized contractor at the conclusion of work on the Special Project. In the Muskrat Falls Project wind-down process each contractor who is non-union prior to commencing work on the Special Project should ensure care is taken during its layoff and wind-down processes. Similarly, a contractor bound by one or more of the Provincial Commercial Industrial Division collective agreements when commencing work on the Special Project may avoid the applicability of additional Provincial agreements by exercising care during its layoff and wind-down process as the work is completed.

The issuance of the SPOs marks another significant milestone in the recently sanctioned $7.7 billion dollar Muskrat Falls Project.

We would be pleased to assist with any legal and strategic planning issues arising from proposed or actual involvement in the Muskrat Falls Project.