November sees two examples of an uncommon strategy

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

There seems to be something bewitching for a few employers in the idea that they can impose terms of employment on a union with whom they are unable to reach a negotiated agreement.

Telus tried this in July of 2005 when they were in the midst of a bitter strike with the Telecommunications Workers’ Union.  Viterra did the same thing in July of 2008 when it imposed the terms of an offer that had been rejected by members of the Grain Services Union.  A strike took place there as well.

Late in November, when talks between the Teamsters and CN Rail were stalled, the company announced that it would impose new working conditions, including an increase in the monthly mileage cap on engineers.  Lowering the mileage cap was one of the union’s goals.  Its response was a strike notice the following day.

And, when the community colleges of Ontario and OPSEU reached an impasse in their bargaining in the middle of November, the colleges used their rights under the Colleges Collective Bargaining Act to impose a four-year contract.  However, the two sides are continuing to negotiate in the hopes of reaching a settlement.

A collective agreement must be based on an agreement reached by the two sides and normally cannot be simply imposed.  As such, attempting to impose an agreement is not likely to be a genuine bargaining gesture, though it may well signal clearly and publicly what the employer is willing to agree to.  What it is more likely to be (and was in at least two and probably three of the examples) is a red flag to the union.

As a tactic, an attempt to impose an agreement will appeal to employers who are in an aggressive mood and tempted to test the solidarity of the union’s membership.  Telus is a textbook example.  It will invariably be a fundamental challenge to the union’s primary function as representative of the bargaining unit.  As such, it will elicit a predictable response from the union.  The workforce will be polarized and the relationship between the employer and the union will deteriorate.

Not a recipe for good employee morale and a mature labour relations environment.

Fee reimbursement may violate wage restraint

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

The auditors and other professionals employed by the Canada Revenue Agency and represented by the Professional Institute of the Public Service of Canada recently ratified a new collective agreement. It followed the government’s prescribed pattern for wage increases. But, it also extended the groups for whom the CRA would pay professional fees. Up until then, annual memberships in the accounting bodies (CICA, CGA and CMA) had been reimbursed. In this round of negotiations, that was broadened to other professional organizations, such as provincial bar associations. So far, not so special. Lots of employers who are not law firms, mine for instance, reimburse lawyers’ annual fees.

However, Treasury Board is of the opinion that the increase in costs resulting from the CRA’s largesse is a violation of the Expenditure Restraint Act. It is going to the Federal Court to have it over-ruled. Two other PIPSC contracts awarded by interest arbitration have also been challenged for similar reasons.

A couple of years ago I reported on a public sector agreement in a province that had wage restraint. The agreement had been structured in such a way as to avoid the wage increase limits. The union said so on its web site and, dutifully but naively, I reported it. I got a phone call from a member of management who was not at all happy that that aspect of the agreement was being made public.

And there are a lot of ways to increase pay without resorting to a general wage increase. The best example is the wage progression: higher steps can be added or lower ones taken away. As well, premium pay, overtime, allowances and job evaluations can all be adjusted in such a way as to benefit employees.

On the one hand, as a supporter of democracy, I believe that the will of Parliament must be supreme and should not be undermined by the civil servants charged with carrying it out. However, I also have to ask whether it always makes good labour relations sense.

The management of the CRA is responsible for attracting and retaining the talent they need to fulfill its mandate. Lawyers and accountants have other employment options. And, even if they don’t leave, their morale will not be improved by having this perk offered and then taken away. Management is also responsible for having employees motivated to do their jobs to the best of their abilities. Finding tax cheats can bring in big money.

If this infraction had been identified a couple of weeks earlier, it could have been dealt with before either party was embarrassed. But, because of organizational structure and pure size, the “loop” in the public service is usually much larger than it is in the private sector.

As long as the government in power is going to interpret its mandate as strictly is it seems to be doing here, negotiators will have one hand tied behind their backs. There is no indication that the CRA or the union had any intention of flouting wage restraint, yet they may find their deal invalid. Do they disappoint some members of the bargaining unit by reversing the fee reimbursement or do they disappoint even more of them by reducing the general wage increase by the (likely very tiny) amount needed to conform to the law?

End of mandatory retirement calls for new paradigm

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

In September, a Manitoba court upheld an arbitration award and found that mandatory retirement in the federal jurisdiction violates the Canadian Charter of Rights and Freedoms.  A technician at a local TV station wanted to work past 65 but the collective agreement provided for mandatory retirement at age 65.

One of the employer’s arguments centred on the “social contract” under which employees and companies accept a career trajectory: workers gain increased benefits as their length of service grows and their value to the employer grows.  As they approach the traditional retirement age, their contribution to the company may not be as great as what a younger employee’s would be, given their higher wages and more generous benefits.  But, they have “earned it” and will soon retire, leaving a spot open for a new recruit.

With mandatory retirement gone, what happens to the social contract?

Some employers are suggesting that they will have to apply job requirements and production levels more strictly to identify and remove older workers who are no longer physically or mentally able to keep up.  The undignified stereotype of 65-year-olds no longer able to earn and contribute will be replaced by the bitter reality of employers targeting them for termination.

Call me nostalgic, but the traditional way had its benefits.

One Steelworker agreement in the Hamilton-Niagara region has come to what might be a reasonable compromise.  It provides that the company and the union can agree to vary the labour contract (and specifically the wage grid) to allow older workers who are no longer able to maintain production levels to continue to work.  Granted, this is a physically demanding workplace, but perhaps there is a better paradigm here that either overlooking the effects of age or targeting them for closer scrutiny.

Other workplaces use retired workers to fill in on weekends, allowing full-time employees to be with their families and cutting down on overtime.

The best approach might be somewhat like accommodation for disability.  It is common and accepted for unions and management to respond to their duties to accommodate by varying seniority and posting provisions, and job descriptions, to allow disabled workers to continue working within their capabilities.  Could this not be applied to older workers?

As a practical matter, the number of employees, particularly in the manufacturing sector, who are eager to go on working beyond age 65 will not be huge.  But it is there.  And, the judge pointed out in the above case that the union was an active participant in drafting a provision it knew, or should have known, was discriminatory.  The presence of older workers is a reality both the employer and the union will have to accept and negotiate into collective agreements.

The accommodation paradigm has one immediate drawback, however.  There are only so many light duties to go around and only so many ways that jobs can be modified.  Compared to the duty to accommodate, helping older workers is a lower priority.  Still, drawing on the knowledge and experience of mature employees in a way that is appropriate to their abilities must be advantageous to both them and the company.  Some creative thinking can make it happen.

American disease hitting Canadian papers

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

The publishers of La Presse, the Montreal French-language daily newspaper, have placed a deadline of December 1 to get collective agreements with their eight unions.  Otherwise, the paper will close.  The financial troubles that have already decimated newspapers south of the border are evident here.

On October 28, the newspaper reached tentative agreements with the four unions affiliated with the Fédération des travailleurs et travailleuses du Québec (FTQ) — advertising, pre-press, printing and stationary engineers.  However, things are not going so well with the other four unions affiliated with the Confédération des syndicats nationaux (CSN) — editorial, clerical, IT and distribution.  The CSN represents the majority of the employees. 

It hasn’t been an easy time recently for Quebec journalists.  In 2007 and 2008, the employees of the Journal de Québec were locked out for 16 months.  This year, journalists at the Journal de Montréal have been locked out since January.

On October 27, the company allegedly made its final offer directly to the employees.  As a result, the editorial union has filed a complaint claiming negotiation in bad faith and undermining of the union.  The allegations will be heard on November 2.  In the meantime, however, the FTQ unions will have already voted on October 29 on their offer.  Some unions could have new agreements satisfactory to the company while others hold out under a cloud of mistrust.  All with the deadline looming.

This has the makings of a nasty finish.  At least all the larger locals will have to ratify in order to meet the newspaper’s deadline.  While the FTQ proposals are not yet public, the CSN’s editorial union, at least, is looking at a number of job losses.  Harsher terms in the offer are likely to sour relations between the two provincial organizations, which were not always friendly in the first place.  And from the employer’s perspective, having the unions chained together like the two escaped criminals from the chain gang, both needing and mistrusting each other, may well provoke suspicion and irrationality.  That’s not something that is needed if the financial crisis of the newspaper is as grave as it has been portrayed.

Quebec and BC remain only provinces outlawing replacement workers

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

On the Thursday before Thanksgiving, there were a grand total of 35 members of the Ontario Legislature available to vote on second reading of Bill 86, a private-member’s bill to ban replacement workers during a strike.  It was rejected 25 to 10.

Most people who support or reject anti-scab legislation do so on the basis of an imagined “balance” in labour relations: banning replacement workers would either create it or destroy it.  They see balance as existing where they have an advantage and not existing where they don’t.

The objective evidence for not banning scabs is based on several academic studies that showed that strikes were both longer and more frequent in the provinces where replacement workers were banned.  This work dates from the 1990s and the evidence on which it is based is mostly from the 1960s through the 1980s.

This year, a more up-to-date study was published by Paul Duffy and Susan Johnson of Wilfrid Laurier University that finds that anti-scab laws increase strike frequency and decrease strike length, but that the effect in terms of number of days lost lasts for only a couple of years until the parties get used to the new regime.  Then it disappears.

Another effect of replacement workers crossing picket lines is violence.  They, and the security guards hired to shepherd them, become a focus for confrontation.  The only suggestion offered by opponents of a ban is that laws might be strengthened.

After the massive union effort put into trying to pass federal anti-scab legislation in Bill C-257 in 2007, and the way in which it was finally defeated, it may be difficult to create the same concerted push any time soon.  Only one candidate for the NDP leadership (and premiership) in Manitoba has come out tentatively in favour.  New NDP private-member’s bills will undoubtedly continue to be proposed, but they will likely suffer the same fate as Bill 86.

Labour-friendly mayor too much of a good thing

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

The two-term mayor of Toronto, David Miller, surprised a lot of people last week when he declared he would not run again in 2010.  It looks as though he took one for the team.

Miller has been seen as labour-friendly.  Whether or not it is entirely true, the impression has stuck.  On occasion, that has helped him achieve compromises a more confrontational mayor could not have.  This summer’s civic workers’ strike was not one of those times.

Despite the fact that there is over a year to go before the election, Miller seems to have realized that the light at the end of the tunnel is an oncoming train.  Polling suggests he could not win again and insiders say Miller fears helping a right-wing candidate into power by running an unsuccessful campaign.

There is a moral here for municipal unions everywhere: Don’t bite the hand that feeds you.  David Miller was clearly a left-leaning mayor.  A compromise this summer would have bolstered his position and perhaps given him another term.  Now, CUPE will most likely have to negotiate the next time around with a mayor elected with a “no more sick days” plank in his or her platform.  By demanding the status quo, they may have lost it all. 

Competitiveness stronger incentive for union than management

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

Something is going on in the current Ford of Canada negotiations with the Canadian Auto Workers that you don’t see every day.

Ford’s brass took the position earlier in the year that the company didn’t need union concessions in Canada (unlike GM and Chrysler) and would be profitable even without them by 2011.  (Ford had negotiated concessions in the U.S. with the UAW.)

Not surprisingly, however, they have also stated that they want and expect to enjoy the same cost reductions as their competitors. 

But, if you read the internal newsletters of the CAW locals at Ontario plants in Windsor, Oakville and St. Thomas, Ford is on the brink of collapse, chalking up back-to-back annual losses and staggering under a $32 billion debt load.

It’s not every day that the union bends over backwards to convince its members that the company they are bargaining with is in a much worse financial situation than the company likes to admit.  And that they should be ready to give up concessions.

One has to believe that Ford workers have been listening to their company executives and are asking the union why they need to give up anything.  Sales are up; market share is up.  The CAW, which wants to keep a level playing field with an auto industry pattern and fears Ford will relocate future investment to the U.S., needs to get the concessions and is putting on the pressure to make members understand the issues involved.

Union communications this time look very different from the normal “Stay solid, stand up to the employer and we’ll achieve our goals” messages going into negotiations.

The parties are headed back to the bargaining table and will most likely replicate the same concessions that Ford’s domestic partners have already agreed to.  It all makes sense, but it’s not your run-of-the mill contract talks.

Extensions, freezes, increased flexibility common features

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

Desperate times, the saying goes, call for desperate measures.  For manufacturers, this last year has been a desperate time.  While the collective agreement responses are not desperate, they certainly are various and interesting.

Among the more conventional changes, wage freezes have recently become much more common.  And, with a few exceptions, the wage roll-backs that characterized the meat packing industry when it was in crisis a few years ago have been absent.  This would suggest that labour cost is not the central issue in the implosion of manufacturing, but perhaps other culprits such as financing and demand.

Another old stand-by, the one-year extension, has also become very frequent of late.  An article in the Globe and Mail not long ago suggested that doing nothing was the new labour relations strategy.  Waiting and seeing has certainly gained in favour.

However, some agreements are displaying more confidence.  National Steel Car in Hamilton and Cooper-Standard in Georgetown come to mind.  Standard length agreements were ratified with concessions balanced against commitments for investment and new products.

Among the more innovative changes, new hire rates have dropped as a percentage of the job rate in numerous agreements.  The length of time before the job rate is reached has also increased.  In a climate of massive layoffs, this may not have immediate effect, but it might in the longer term.

Several recent agreements, Barnes Group in Burlington and Aker Chemetics in Don Mills, for example, have cut back on or eliminated lead hands.  The cost savings may be a consideration, but the role of supervisors will also be affected.

The weekend shift will be eliminated in the new Kellogg’s agreement in London.  This is one of several flexibility measures that were achieved by the company despite a strike.  New employees will be cross-trained for all jobs and can be scheduled more freely.

Timken Canada in St. Thomas was being hurt by the value of the Canadian dollar.  The union agreed to trade the COLA clause for a floating premium based on the exchange rate.

Finally, perhaps the most innovative and the one that renews your faith in the traditions of the labour movement:  Biltrite in Etobicoke and its union agreed to a single wage rate of $20 per hour across the board with greater or lesser roll-backs for everyone from Sweeper to Electrician.

Counterproductive to declare some services essential

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

The question of what should be an essential service has come up in the wake of several municipal strikes in Ontario and the ongoing paramedic dispute in British Columbia.  At the end of Toronto strike, many angry rate-payers were calling for garbage collection to be declared essential.  About the same time, the Ontario Paramedic Assn. called on the province to declare ambulance attendants essential.

First of all, there are two kinds of “essential services” regimes.  Some employees are deemed to be universally essential and cannot strike:  police, firefighters, acute-care nurses.  Their collective agreements are decided by binding arbitration in the event negotiations are unsuccessful, which is most of the time.  The aim of interest arbitration is to create the agreement that the parties would have reached through talks, if they had been able to.  Practically, it means healthy wage increases (allegedly a 10 per cent premium), but no breakthroughs on premiums and benefits.  When considering these provisions, interest arbitrators would rather be followers than leaders.

The other kind of essential service employee is the one who is part of a bargaining unit that is mostly non-essential:  paramedics, corrections officers, hospital support staff.  Generally, the striking union and the employer are required to present a list of essential employees: a skeleton staff that can continue a vital service during a work stoppage.

Obviously, this is going to be a bone of contention because it directly affects the union’s ability to bring pressure to bear on the employer.  There is no binding arbitration, so the union is being asked to fight with one hand tied behind its back.  The Toronto settlement would have not happened as soon as it did (or probably as it did) if trash were being collected regularly.

Each time a provincial civil service strike approaches, there are allegations from the union that the essential services list is too large, and there is often litigation before the labour board.  The recent essential services legislation in Saskatchewan is already being criticized by unions as too broad.

Any move to declare daycare or school teaching or garbage collection as an essential service is going to be fought tooth and nail.  Making trash collection essential may be good politics, especially right now, but it’s poor labour relations.

And union jobs are taking the hit

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

Every once in a while, something happens that gives you a little chill, that makes you think that maybe a momentous event has just taken place. And it doesn’t have to be Columbus sighting Hispaniola in the distance. It can be like Joseph P. Kennedy realizing that the market is in trouble because he has just gotten a stock tip from the shoe-shine boy.

I got that feeling when I read in the Globe and Mail the other day that former executives of Vale Inco in Sudbury admitted that the new ownership of the mine and smelter wanted to “hit the reset button on the entire labour relations situation and the agreements that have been put in place in the past.”

I am used to a labour relations climate where relative strength has drifted around an equilibrium for the past decades. Sometimes one side had the upper hand; sometimes the other did. But two things always seemed inevitable: 1, that the standard of living of workers would continue to improve due to increasing productivity and general economic growth, and 2, that things that were lost in one round of negotiations (by either side) could be made up in the next.

I wonder whether that era has ended.

At one time, I would have chalked up “reset” talk to a tough bargaining position. This time, I wonder if it might happen.

It may be that the tide against which the labour union movement in Canada has to swim has become overwhelming. Globalization. Competition from low-labour-cost regions. A persistently high Canadian dollar. High energy costs. Low commodity demand. Structural changes in the labour market.  Contracting out and outsourcing.

Unlike some, I don’t look forward to what this change may bring. Our standard of living is historically tied strongly to consumer demand and no other sector seems poised to replace it. Not the public sector and not private business. The existence of well-paid, working-class jobs, union jobs prominent among them, has floated many, many boats.

Paying lower taxes and paying less for bolts at the store and getting news free on the internet rather than buying a paper are all great, provided your income stays the same. But, perhaps, one day a tipping point arrives and it no longer does. Mercantilism on an individual scale in the 21^st century will be no more successful than it was on a national scale in the 17^th and 18^th centuries.

Optimists will tell me that I am naïve and that a new and better economy based on knowledge will replace the old one based on manual labour. (Supposedly with the concomitant shift in “dumb” jobs to the developing world, leaving us on top again.) It would do me a lot of good to see that evolution begin to take place before all the old economy jobs are either gone or reduced to a shadow of their former selves.