The International Experience - Contract compliance
Description
Implemented in the USA in 1960s and in Canada in the 80s, contract compliance legislation mainly focussed on increasing the representation of women and minority groups in employment.
USA
Executive order 11246 of 24 September 1965 required that non construction companies with 50+ employees or contracts of more than $50,000 must develop and maintain a written affirmative action programme and that the Department of Labour Office of Federal Contract Compliance Programmes (OFCCP) could ask for this action programme to be filed. As part of the programme the organisation must conduct a workforce analysis of each job title, determine workforce availability of women and minorities for each job group and conduct a utilisation analysis to determine whether women and minorities are 'underutilized'. If so, the organisation is required to develop specific goals to rectify this.
'..all Government contracting agencies shall include in every Government contact hereafter entered into the following provisions:
Subpart B (1) The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex or national origin. Such action shall include but not be limited to the following: employment...rates of pay or other forms of compensation...In the event of the contractor's non-compliance with the non-discrimination clauses of this contract...this contract may be cancelled, terminated or suspended ...'
Canada
In Canada, the Federal Contractors Program targeted non-federally regulated contractors with a resident workforce of 100 or more employed which received federal contracts for goods and services of $200,000 or more.
These organisations must:
- Collect and maintain data on those employed;
- Analyse the representation of each of the designated groups in all occupational groups;
- Compare this representation with external representation;
- Identify under-representation;
- Remove all barriers impeding designated groups;
- Prepare employment equity plan - long and short term goals and as required, provide accommodation and special measures for designated groups; and
- Provide report of progress.
Periodic compliance reviews are undertaken.
Australia
Communication with the Equal Opportunity for Women in the Workplace Agency (EOWA) in Australia[21] confirms that the government procurement policy does require contractors to comply with the Equal Opportunity for Women in the Workplace legislation (if they are covered by it) but the EOWA Act does not require an organisation to demonstrate that they meet any particular minimum standards in pay or conditions.
EOWA report that (as far as they are aware, and that I could determine) government agencies are not directly involved in influencing pay and conditions when they contract for services. The core of the procurement process is 'value for money'. Four policies are described as intersecting with the procurement policy. These include health and safety, but do not include any equity policy. The main mechanism for achieving fair pay rates is said to be through union negotiated awards.
New labour legislation in Australia has altered (amongst other things) the structures for setting minimum wage rates. This will now be done through a new Agency - The Fair Pay Commission. Taking account of business interests is part of its terms of reference. Unions believe that the 'business agenda' will be more dominant than in previous processes. The government has also set up the Awards Review Taskforce, which 'will report on how to reduce the duplication and complexity in current federal awards'[22]. It is due to report to the government in July this year.
Any assessment of the impacts of these recent and potential changes on employment outcomes for low paid and precarious workers will obviously be made over time.
Outcomes
Evaluations of the US and Canadian programmes concur that while in the early years they resulted in modest improvements in employment outcomes for targeted groups, the decline of good data, monitoring and active enforcement is currently limiting their potential. In practice it seems that the pay and conditions of workers once hired, were a very minor or absent focus of the programmes.
In 2000 the OFCCP concluded that,
'Currently OFCCP cannot measure the impact of its civil rights enforcement - that is, its contribution to the reduction of employment discriminations as a whole. Lack of recent, appropriate evaluation data prevents a detailed, accurate assessment of day-to day operations and overall effectiveness. ..(and ) the OFCCP....has not adequately established the practical utility of particular reporting requirements...the implementation of an Equal Opportunity Survey has been criticized as burdensome and not providing useful, reliable data.'
In April 2002 an evaluation was undertaken in Canada of the Federal Contractors Programme[23]. It concluded:
'Overall the Federal Contractors Program (FCP) appears to be highly relevant to the current government's agenda and is characterized by important potential impacts ...(but) ..the evaluation found that FCP to be a program (sic) of continuing relevance, but whose full potential impacts have not yet been realised.' One of the weaknesses highlighted was a lack of enforcement activities.
Contradicting the contract compliance equity agenda is more recent developments in Canada. The Ontario, Quebec and British Columbia governments have passed legislation giving them the power to override existing collective agreement provisions when services are contracted out. This means there is no security of wages or tenure and eliminates provisions requiring new employees to retain the terms of existing agreements for a minimum of one year.
Possible relevance to New Zealand
Contract compliance models in the USA and Canada were developed for a somewhat different agenda - reflecting the focus at the time on increasing the representation and distribution of EEO target groups. The processes are reported as being overly bureaucratic and highly prescriptive and over time have been less vigorously enforced. The concept is perhaps better articulated in the 'positive duty' approach.
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[21] Personal communication with Imelda Hunt of EWOA.
[22] From the Award Review Taskforce website – www.awardreviewtaskforce.gov.au
[23] Human Resources Development Canada. (April 2002). Evaluation of the Federal Contractors Program.
