Vale Strike Report Critical of Company’s Bargaining Tactics

Inside look shows what can go badly wrong in labour negotiations.

by Gordon Sova (gordon.sova@thomsonreuters.com)

Government reports, and especially ones that deal with a live issue involving live antagonists, are normally written in reserved, diplomatic terms.  Recommendations intended to defuse and resolve labour relations confrontations are also normally written exclusively in positive language: no one is blamed and no one is singled out.  The Report of the Industrial Relations Commission into the Vale Voisey’s Bay strike, released on January 7, is very different.

That is not to say that it is florid in its language; quite the contrary.  But the fact that the way the company has conducted negotiations is criticized at all (even in measured and objective terms) screams from its pages.

The report of the Commission points out that Vale refused to budge from any of its positions during the hearings, despite significant movement by the Steelworkers.  High-ranking Vale negotiators chose not to attend Commission hearings.  The Company repeatedly berated the union for its negotiating tactics, an issue that is before that labour relations board and that does not fall within the terms of reference of the Commission.  It even argued that reaching a settlement with the help of the Commission would not be “appropriate.”  “It is apparent to the Commission that the Employer has an approach that does not contemplate compromise on any basis that might be acceptable to the Union.  It apparently believes that the Union does not represent its membership or that an employer should be allowed to circumvent a union’s right and obligation to bargain on behalf of its membership in the bargaining unit.  It is not surprising that this has contributed to a continued failure in these negotiations.”

Pretty strong language.  Not surprising that one of the three “options to resolve this dispute” through negotiations put forward by the Commission is a complete change of bargaining teams for both parties.

To be fair, the union’s behavior is also criticized, but it is limited to one issue, lining up the next round of negotiations to the expiry of the Sudbury agreement.  The company’s position has been to deny this, also for strategic and not economic or labour relations reasons.

Strikingly, the Report finds that the two sides are very close on a number of crucial issues: wages and bonus, for instances.  Virtually all the elements of the settlement the report proposes have already been agreed to by both sides.  The United Steelworkers has agreed to a vote on the proposal, Vale has not.  The principle differences between the proposal and the company’s position are in the bonus and the term.  The Commission has suggested a four-year term commencing on January 1, 2011, leaving the expiry five months before Sudbury’s.  But still too close for Vale.

A second report from the Commission will be released by late February and this one will discuss wider issues such as the factors that led to the strike and ways to improve labour-management relations.  The lines of inquiry laid out in the terms of reference and the hints that can be inferred from the first report suggest that the recommendations from that report may be strong and broad.