'Nothing to gain' from cuts
Fletcher EQR says it has nothing to gain from cutting what it pays painters and plasterers, but the Council of Trade Unions claims the company is profiteering.
Canterbury painters are questioning Fletcher EQR's pay rates, saying they will put contractors out of business.
Fletcher said last week it dropped its interior-decorating rates 20 per cent to $19 a metre to bring them back in line with the market. The previous rate had been too high, it said.
The rate is for the repair of a wall and is split between the painters and plasterers who work on it.
Fletcher says the reduction brought inflated rates into line with the market and was based on a labour rate of $45 an hour.
The review was done by quantity surveyor Rawlinsons and approved by the Earthquake Commission, which enlisted Fletcher to project-manage all Canterbury quake repairs between $10,000 and $100,000.
Fletcher Earthquake Recovery general manager David Peterson said the company was paid a flat percentage project-management fee by EQC and had nothing to gain from reducing the rates.
''The need to ensure that rates paid to contractors, employees and subcontractors are based on market factors is two-pronged,'' he said.
''On one hand, rates must be attractive enough to bring contractors and labour into the programme. On the other, they cannot be so high that the funders of the programme - reinsurers and the New Zealand taxpayer - do not get value for money.''
The former rate had been set well above the market, he said.
Council of Trade Unions president Helen Kelly said Fletcher's rate cut was ''an abuse of contracted labour'', and she called for EQC to bring the company into line.
''Fletcher is abusing the contracted-out employment relationship to profiteer at the expense of the people rebuilding Christchurch,'' she said.
''What's more, the company's self-interest has led to layoffs and pay cuts that are already delaying repair work urgently needed by the people of Christchurch."
Painters said they were struggling with the lowered rates as they had taken on staff and equipment on the back of money cashflows that were no longer there.
One said he had laid off staff because of the changes and was worried about paying tax on a profitable 2011 when his cashflow had suddenly dropped off this year.
He had planned to grow for the first half of the year and save for paying tax in the second half, but the rate change meant his business was only scraping by.
Another painter said the screwed-down rates would encourage qualified painters to find work other than quake repairs.
The painters wanted to remain anonymous because they feared Fletcher would cancel their accreditation or reduce their workloads.
Fletcher spokesman Barry Akers said the company's confidentiality rules for contractors had been scrapped about five months ago.
Fletcher understood the contractors were businesses in their own right and did not want to stop them speaking to the media, but they asked that contractors tell Fletchers beforehand.
''We're just asking for normal courtesy really,'' Akers said.
Contractors who did talk to the media would not be blacklisted or dumped, he said.
''We're not using economic power to keep people in line. We just don't operate that way.''