Union vs Non-Union Subcontractors: Tim Dive's Tricks to Protect Your Trade

In the construction industry, subcontractors play a vital role in bringing together a successful project. However, there is often a debate between using union or non-union subcontractors. In the "Tricks of Your Trade Podcast" episode 40 hosted by Michelle Cirson, Tim Dive provides his insights and tips on how subcontractors can protect their trade, whether they are union or non-union.

Tim Dive is the founder of Workplace Advisory Specialists, a consulting agency based on the Gold Coast in Queensland. With over 15 years of experience in the industry, and having worked on the tools as a plasterer, Tim has witnessed firsthand the pros and cons of both union and non-union subcontractors. According to Tim, the main difference between the two is the structure of their workforce.

"Union subcontractors are organised labour with a collective bargaining agreement, and they follow that agreement to the letter. The non-union side is not as structured. There is no collective bargaining agreement," Tim explains. He continues, "Non-union subcontractors are typically smaller, and they have more of a family business structure. There is more of a sense of ownership, and they feel a little bit more connected to their work."

Despite the differences, Tim emphasises that both union and non-union subcontractors have their strengths and weaknesses. "Union subcontractors have excellent training and safety programs. They have a pool of workers that are readily available, and they can mobilise quickly," Tim notes. "Non-union subcontractors, on the other hand, are more cost-competitive. They can offer lower prices because they don't have to pay union dues and benefits."

To protect their trade, Tim advises subcontractors to do their due diligence before choosing to work with a particular general builder. "Check out their reputation, see what their payment history is, and see if they have a good safety record," he recommends. He also suggests asking for a copy of the contract upfront and reviewing it with a contracts expert or solicitor to ensure that it protects the subcontractor's interests.

One of the main concerns subcontractors have is payment. Tim suggests setting payment terms upfront and ensuring that they are included in the contract. "Don't start work until you have a signed contract in place. Make sure that you have payment terms in there that support your cash flow requirements for prompt payment of wages," he advises.

Another issue that subcontractors face is the risk of delays, which can impact their bottom line. Tim suggests that subcontractors make sure they are entitled to claim delay costs under their builders’ contracts, to protect themselves from the cost of delays caused by the principal contractor or other trades. "It's essential to have a 'delay costs' clause because if a project is delayed, it's not your fault. You shouldn't be penalised for something that's not your fault," he explains.

Tim also stresses the importance of having proper insurance coverage. "Make sure that you have the right insurance coverage in place. You need to have public liability insurance, workers' compensation insurance, and depending on your trade, professional indemnity insurance," he notes. He advises subcontractors to review their policies annually to ensure that they are still adequate for their business needs.

Tim also suggests subcontractors should be networking and building relationships with other subcontractors in the industry. "Build relationships with other subcontractors in your area because they can refer work to you. They can also give you insights into who the good contractors are and who to stay away from," he suggests.

Whether subcontractors choose to work with union or non-union contractors, Tim's tips on protecting their trade apply to both. Doing their due diligence, setting payment terms upfront, including a "delay costs" clause in the contract, and building relationships within the industry can all help subcontractors to protect their business and succeed in the construction industry.