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

There were two demonstrations on the news this weekend; one was in Cairo and one was in Hamilton.

In the neighbourhood of 10,000 union members and sympathizers rallied in Hamilton, Ont. on January 29 in support of the 900 locked-out employees of U.S. Steel.  They were locked out after they refused to accept a company offer that included a two-tier wage grid, a defined-contribution pension plan for new employees and the end of indexing for pension benefits.

A long article on the rally in the Hamilton Spectator on Saturday was full of nostalgia for the power of the Steelworkers in bygone days.  Everyone interviewed seemed to agree on one point: that power is gone.

For the labour movement, the ability to put 10,000 bodies in the street has got to be acknowledged.  But what did they hope to achieve by this?

Clearly, it was not to force U.S. Steel to withdraw its concessions.  They’re not going anywhere.  Given the ability of the company to produce steel in other places to supply the Canadian market, the economic leverage to make them back down isn’t there.

A lot of the message was directed at Ottawa.  Speakers demanded tightening of foreign investment rules.  But that train has already left the station.

As a demonstration of solidarity, the rally certainly has its value.  But despite the example that is drawn from bravery in the face of adversity, it’s nice to have a few victories to boast about, too.  And they have not been numerous of late.

Which brings us back to Cairo, which by all indications will end in a victory for the protesters, at least up to the day the next government is formed.  Sometimes the courage of the underdog is rewarded.

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

The United Auto Workers (UAW) will be negotiating shortly with Chrysler, Ford and General Motors in the U.S. and the divergence between the Canadian and American auto unions is clearly evident.

Hourly workers at Ford are reportedly about to receive profit-sharing payments of over $5,000 each.  And, according to the Detroit News, the companies are dangling larger bonuses in front of UAW negotiators. 

Bonuses are good for the companies because they control fixed costs and are paid only if there is a profit.  In the recent round of negotiations, they were established to allow the company to lower wages; now executives are talking about tying them to quality metrics.

One win for the union is that fat bonuses are making membership look more attractive to non-union Southern employees of foreign automakers.

Meanwhile, president Ken Lewenza of the Canadian Auto Workers (CAW) is refusing to follow suit.  Canadian workers opened their contracts in 2009 to help their employers out of bankruptcy, but the contracts they arrived at had significant differences.  First, they have higher second-tier rates for new employees and higher rates for first-tier employees, and they have no lump sums.

Lewenza is challenging the UAW to attack two-tier wages and is vowing to do so in Canada as well, when his turn comes in 2012.  And he is pointing to guaranteed wages, rather than contingent bonuses, as the more responsible way to proceed.

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.

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

It is difficult to avoid a subtle sense of irony when reading the Ontario Labour Relations Board’s decision, brought down on December 20, that the safety of uniformed members of the Toronto Police Services is not significantly lessened by the requirement that they wear name tags.

The complaint was originally made in 2006 when the policy was instituted, so any relationship to the G20 demonstration charges is coincidental.

The mandatory wearing of name tags is not universal in Canada: the Ontario Provincial Police, the Windsor police and the Winnipeg police are not required to.  On the other hand, the Florida Highway Patrol has had name tags since 1939 with no problems.

The Toronto Police Assn. (TPA) provided a number of scenarios under which wearing a name tag might be hazardous.  Some seem reasonable: criminals and stalkers being able to identify and track individual officers, and members of a minority being able to identify the ethnicity of a police officer through his or her name tag.

Others were less so: the danger that an officer might be injured if a metal name tag (no longer mandatory) were to shatter when struck by a bullet.

The problem for vice-chair Ian Anderson of the OLRB was that the TPA could come up with virtually no evidence to support these hypothetical situations.  “Policing is an inherently risky profession.  Some of those risks relate to police officers being identified.  The evidence does not establish that the wearing of name tags has been related to any material increase in that risk.”

There is a danger when criminals can identify police officers, but the evidence showed that that danger has not grown through the use of name tags.  There are a number of other legitimate ways those names can be obtained and the advent of name tags has not resulted in a rash of assaults against off-duty cops. 

The bulk of the evidence involved spur-of-the-moment threats by people in custody.  The threat would have been made anyway, and almost certainly not been acted on; the difference is that it can be made a little more personal.

The TPA has consistently objected to the requirement that officers wear name tags.  This finding removes one of the few possible legitimate premises for that objection.

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

This morning’s Toronto Star has an op-ed cartoon of Mayor Rob Ford as the new sheriff in the western town.  He is drinking shots from a jug called “honeymoon”.  Through the saloon window, the reader can see an approaching armed gang labeled “unions”.

So far, Ford has been working from the Mike Harris–Gordon Campbell playbook: act quickly and decisively, don’t bother with consultation and don’t give the opposition time to organize.  However, Ford’s latitude to work this way is much more restricted than a provincial premier’s.

For example, he has just “killed” the metro public transportation plan that was developed by Toronto, the GTA municipalities and the provincial government.  He plans to ask the same government to declare the Toronto Transit Commission an essential service.  Queen’s Park, which has been polite to date, may not be in a hurry to go out on a limb for him by making just one public transit system in the province essential.  Especially after he has embarrassed them and left them holding the bag for a number of supplier contracts that may have to be broken.

Then, Ford intends to contract out garbage collection.  In that, he will certainly have a battle on his hands, one that will unite all his enemies.  The fight will not be short and sharp.  If he intends to initiate that quickly, it will also fall during the preparation of the 2011 budget, which Ford has begun early.

This could get very messy.  And ending the “gravy train” might not generate the massive tax savings Ford has been trumpeting.

He has been treating his 47% plurality as a decisive referendum to act as he wishes.  Union opposition is unlikely to eat far into his base of support, but a failure to find enough fat in the budget to allow him to cut property taxes definitely will.

The contract between the TTC and the Amalgamated Transit Union expires in three months; those with CUPE for inside and outside workers at the end of 2011.  The dilemma facing Ford is whether to continue the Harris-Campbell strategy and take on the unions now (while also balancing the budget) or to face his challenges one at a time.  The latter might be a wiser option, allowing him to rebuild through union-bashing what he will probably lose in support through failing to slash the city budget without service cuts.  But the timing of the expiries may not give him a choice.

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

An article published on November 19 in the New York Times points to a number of two-tier wage schemes in the United States as proof that labour unions have suffered a significant and final defeat.  Even manufacturing companies that are profitable have been able to negotiate two-tier wage agreements with their employees’ unions.  This differs from previous examples of two-tier wages in past recessions, the article continues, because they were negotiated with employers in trouble and had a termination date when wages reverted to the higher level.

The Canadian experience with two-tier wages has been different.  Their heyday was in the later 1990s when the meat packing industry was in crisis and wages were being slashed.  There was no indication in those contracts that the two-tier wage plan was to continue for only a short period of time.  Like the U.S. examples, they had the appearance of a permanent change.

Today, however, they have largely evaporated as unions with more bargaining power in better times have negotiated higher wage increases for new employees on the lower tier.  And there is no indication that a new wave of two-tier wages is washing over manufacturing in Canada.

To be effective at reducing costs, a two-tier plan needs to apply to someone.  If the employer is not hiring, there’s nobody to accept the lower wage.  In the meat packing example, senior employees were given incentives to retire and/or to buy down to the lower level.  Without this, simply gaining agreement to lower wages for new employees is a vain gesture if there are no new employees.

And they do not come without drawbacks.  Unless the new employees have a different title and a different job description, which does occasionally happen, the company and the union are faced with having two employees doing the same job and getting two different rates of pay.  This is going to create bad feelings and resentment, and both parties will feel the effects.

But only so much of the blame can be deflected on unions who were forced to agree to two-tier wages.  And, because unions are in principle opposed to inequality between members in the same workplace, two-tier wages will remain a perennial bargaining target until they are eliminated.

Other types of two-tier schemes (vacation, benefits, pensions) have better sticking power than two-tier wages, but they also have a much smaller effect on costs.  The employer may wait years before much of the benefit from them becomes apparent.

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

The employees of the Wal-Mart store in Weyburn, Saskatchewan, whose union odyssey began in 2004, have asked the Saskatchewan Labour Relations Board to order a decertification vote against the United Food and Commercial Workers.

It has become Wal-Mart’s strategy to use as many legal and procedural roadblocks as possible to delay having a union certified in one of its stores, then negotiating with the union for a collective agreement, and finally concluding an agreement and allowing it to operate.  The company has tried to appeal to the Supreme Court of Canada twice, in 2005 and 2007 and both times unsuccessfully, over this certification drive alone.  But the strategy has been effective.

The most recent company argument suggested that changes in Saskatchewan’s labour relations law requiring secret votes rather than a card check should be applied retrospectively to an application filed in 2004, thus requiring a fresh vote.  The Saskatchewan Court of Appeal didn’t agree.

In these questions, the word “balance” always seems to be used.  Premier Brad Wall of Saskatchewan declared that he was establishing balance when he fired the chair and vice-chairs of the labour relations board.  Calls by the Newfoundland and Labrador Federation of Labour to enact replacement worker legislation to stop the erosion of labour rights (disruption of a balance) are met by the challenge from the Chamber of Commerce that this will destroy the balance.

One of things I learned studying political theory was to be very suspicious of mechanistic and organic analogies in questions of politics.  There are no historical pendulums and no social balances.  There is only an ongoing conversation about how best to achieve goals upon which there is fundamental agreement among almost all of the parties.  Lurches to the right or to the left invariably leave us farther from and not closer to achieving those goals.

It is fundamental that employees in Canada have the right, if they wish, to be represented by a union in negotiating their terms and conditions of employment.  They should not have to wait from April 2004 to November 2010 and still not have their choice made effective.  That is a real imbalance and one that needs to be addressed.

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

On November 8, the Canadian Human Rights Tribunal reinstated two Air Canada pilots, one aged 65 and the other aged 67.  They had been retired by the airline on their 60^th birthdays under the bona fide occupational requirement (BFOR) exception in the Canadian Human Rights Act.

Air Canada now has the problem of two pilots who have high or very high seniority who cannot fly international routes because few other jurisdictions will permit it.  Under International Civil Aviation Organization (ICAO) rules that were relaxed only after the two pilots retired, only one pilot on a flight can be over age 60 and none can be over age 65.  This would restrict the company’s ability to schedule pilots to the point where, were many pilots to continue to fly after age 60, it was the company’s evidence in an earlier hearing that a lot of these pilots would have to be kept on the reserve list and paid salary, being unable to fly internationally due to scheduling problems.  And then there are the seniority and bidding provisions of the collective agreement, which would have to go out the window.

The Tribunal required the two to pass medical examinations and to requalify for the aircraft for which they were previously rated.  Without knowing very much about flying, it still seems reasonable to believe that these standards, albeit rigorous ones, are a necessary but not a sufficient test. 

Unlike with university professors and television cameramen, physical abilities crucial to the job of a pilot decline with age.  The public has a right to expect that every precaution will be taken to protect their safety.

With the lives of passengers in the balance, how does the company assure itself that older pilots are still fully capable?  Any test that was applied only to pilots of a certain age would clearly fail as discriminatory based on age.  It would have to be applied generally over the entire workforce and perhaps made more frequent as age increased.  Not a simple task.

Later this month, the Federal Court will hear an appeal of an earlier Tribunal ruling in this case.  The Air Canada Pilots Assn. is arguing that the Tribunal failed to follow Supreme Court decisions that allow unions and employers to negotiate mandatory retirement provisions.  So we have not heard the last.

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

On October 13, Ontario finance minister Dwight Duncan told the Canadian Labour Congress (CLC) that there was no support for their plan to double Canada Pension Plan (CPP) benefits.  After the speech, however, he let it slip to reporters that he felt women weren’t currently getting “their fair share” of pension benefits from the CPP.

He seems to base his argument on the fact that women, on average, receive smaller monthly CPP cheques than men do.  But that doesn’t necessarily translate into unfairness.  Benefits are tied directly to contributions: women and men who have contributed more over their working lives get larger pensions; women and men who have contributed less get smaller pensions.  There are more women who have contributed less, but that is primarily the fault of the economy, and not of the CPP.

In fact, as fairness goes, CPP benefits are not fully influenced by actuarial factors so women, who live longer on average than men, would draw equal pensions longer than their male colleagues who contributed at the same rate.

Perhaps Duncan had Person’s Day on his mind (it taking place a few days later on the 18^th).  When Ontario’s proposals on pension reform appeared on October 29, there was no mention of women being treated unfairly.

The government undoubtedly has a responsibility to help provide security for all Canadians in their old age.  The CPP, however, is not the only vehicle designed to do that, nor is it the logical choice.  What about the Guaranteed Income Supplement and Old Age Security?  What about using taxation policy, something Duncan is already responsible for?

It might be that, like the EI surplus that a previous federal government used to reduce the deficit, he sees the CPP fund as a big pile of money that can be used without raising taxes.

The trouble is that Duncan, like an odd take on Robin Hood, would be stealing from some of the poor to give to other poor.  Those who rely on the CPP for most or all of their retirement income are not the ones who should have to pay for addressing the “unfairness” he has discovered.  It’s regressive.

There are times when we, as a nation, have decided to use a program created for a different purpose to deal with a pressing social problem.  The disabled receive CPP pensions that are not limited by the amount they contributed.  Parents of new-born children can draw EI benefits without being unemployed.  Childless homeowners pay to support schools through their municipal property taxes.  Sometimes, there’s just no real alternative.

Duncan is right about one thing, though.  The political will to increase CPP contributions, one of those “job-killing payroll taxes,” is not there in this economic climate.  A lot of people seem to want to tinker with the entire pension question, but whether they can agree on where and how to tinker is another question.

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

With one week left before Ontario voters go to the polls to elect new municipal councils, prospects for left-leaning candidates don’t look promising.

In Toronto, the anybody-but-Rob Ford campaign has seen two centrist candidates drop out of the race, leaving George Smitherman very close to Ford in the most recent public opinion survey.

The only candidate likely to be positive to unionized municipal workers, Joe Pantalone, is a distant third. He is rejecting calls to throw his support behind Smitherman, but then, can you blame him? Ford leapt ahead in the early running with vows to cut spending (read laying off municipal workers) and contracting out services (read laying off municipal workers). To keep pace, Smitherman staked out his own ground as a fiscal slasher.

In Windsor, Rick Limoges, the leading challenger for incumbent Eddie Francis, has been endorsed by local CUPE leaders. However, it doesn’t seem to be because he is pro-union, but rather because he can win and he isn’t Eddie Francis. Limoges seems uncharacteristic because he is not promising to cut taxes, at least not for homeowners. But the Windsor race is different in that it centres on economic growth and not on taxation.

Both Toronto and Windsor went through municipal strikes in 2009 and lingering antipathy has coloured both mayoral races. Anger at unionized workers has resulted in campaign promises for the contracting out of garbage collection.

But, as Professor David Doorey’s labour law blog points out, contracting out garbage collection will not be as easy as either Ford or Francis have been making it out to be.

So, bashing unions will get people elected this fall, and it will make for plenty of fireworks in the following months, but it may not have the far-reaching consequences its proponents hope for, especially because it will not generate the same fiscal capital as it has political capital.