Canadian Labour and Employment Relations, Sixth Edition, 6E by Morley Gunderson Solution Manuals

INSTRUCTOR'S MANUAL Claude J. Dupuis Athabasca University Casey Hellawell WC Hellawell Consulting Services Inc.

Canadian Labour and Employment Relations Sixth Edition

Morley Gunderson University of Toronto Daphne Taras University of Calgary

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Contents Chapter 1

Canadian Labour and Employment Relations

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Chapter 2

Understanding the Unionization Decision

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Chapter 3

Labour History and the Development of Modern Capitalism

Chapter 4

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Unions: Membership, Structures, Actions and Challenges

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Chapter 5

The Management of Industrial Relations

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Chapter 6

Managing the High-Involvement Workplace

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Chapter 7

Social, Political, and Economic Environments

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Chapter 8

Collective Bargaining Legislation in Canada

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Chapter 9

The Individual Employment Contract and Employment Legislation in Canada

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Chapter 10 Collective Bargaining: Structure, Process, and Innovation

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Chapter 11 The Collective Agreement

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Chapter 12 Strikes and Dispute Resolution

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Chapter 13 The Grievance Arbitration Process and Workplace Conflict Resolution

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Chapter 14 Union Impact on Compensation, Productivity, and Management of the Organization

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Chapter 15 Public-Sector Collective Bargaining

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Chapter 16 Union–Management Relations in Quebec

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Chapter 17 Trade Unions and Labour Relations Regimes: International Perspectives in a Globalizing World

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Appendix A Fine Family Foods Bargaining Simulation

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Appendix B Arbitration Cases and Simulations

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Preface This Instructor’s Resource Manual represents a significant addition to what I have always considered the best industrial relations textbook available in Canada. The manual’s design reflects a fusion of the needs of students and their instructors. Its content was beta tested on third year undergraduate business students at the University of Lethbridge.

Chapter Overviews Instructors are as limited by time as their students. The overviews provide a quick thumbnail sketch of the content of each chapter, enabling instructors to quickly decide how best to use the subject matter for teaching purposes. The overviews also provide a jumping off point when introducing a chapter or lecture.

Chapter Notes Chapter notes were carefully written to encapsulate the most germane concepts in each chapter. Concepts and discussion points are in many cases explained using a different perspective and writing style than in the text. In other words, the notes in the Instructor Resource Manual provide a complimentary way of conveying the material found in the text. The goal from the onset was to write a companion resource and not simply an annotated summary of the text. ®

Another unique feature of this resource manual is the embedding of PowerPoint presentations within the notes. The slides were carefully placed within the text to provide ideal segues between discussion and presentations. The purpose of this approach is to enhance the flow of your lectures.

Class Activities Keeping students engaged in the material is a challenge in any class. Suggested films along with important information such as duration and synopsises are included to facilitate your teaching. In addition, two appendices are included, which contain a simulation, and several arbitrations exercises. All of these have been used by Allen Ponak and Daphne Taras and in my own classes over the years with tremendous success.

Microsoft® PowerPoint® Presentations ®

Your students will appreciate the 220 PowerPoint slides that capture the major concepts in each chapter. These were developed using geometric shapes and objects that aid the learning process. Every overhead contains crisp vibrant colours meant to draw and focus the attention of students. Every effort was made to avoid boring formulaic bulleted lists wherever possible. In some instances, you will notice slipped-in humour, which the more observant students will likely pick up. This is in keeping with my teaching philosophy that, “learning is fun and not a chore.”

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Test Items The textbook is used at a variety of post secondary institutions from the introductory college to the graduate-level. The test items were written in consideration of the unique pedagogical needs of instructors teaching at any level. The test bank contains over 450 carefully written questions classified into three categories: 1) Within-the-text, 2) challenge, and 3) beyond-the-text. The questions were written by Claude Dupuis and have been used and refined in the classroom over the years.

Within-the-Text Questions are designed to test comprehension of chapter material. These questions are compatible with a wide variety of assessment instruments, and class discussions. The questions in this category come with page references and in some cases suggested answers.

Beyond-the-Text Questions provide opportunities for students to stretch beyond the material in the book and indulge in research. These questions touch on important topics that lend themselves to group presentations or papers.

Instructors with graduate and senior-level students will benefit from the challenge questions, which are meant to test advanced learners.

Challenge Questions were written to be suitable for term projects, or extended class discussions. Many of the questions are provocative in nature and may elicit strong responses and opinions from students. In some cases, these questions challenge the information provided in the text itself. This is the foundation of academic debate, which students do not often have the opportunity to experience. The answers that students provide for these questions will give you insight into their higher-order cognitive reasoning skills. The value is in the quality and construction of their positions rather than the correct answers.

Acknowledgments The completion of this Instructor Manual required a sizeable infusion of dedication, perseverance and faith. Throughout this project, Allen Ponak was a tremendous source of inspiration for which I am eternally grateful. I am also indebted to Daphne Taras, and Morley Gunderson for providing valuable feedback, which I incorporated within these pages. I would also like to acknowledge the assistance I received from Pamela Voves at Pearson Publishing. Last but not least, I would like to thank the contributions of my many undergraduate business students at the University of Calgary and the University of Lethbridge. Every year I teach them, they teach me.

This instructor manual is a testament to teamwork among colleagues who truly respect and value each other’s work and contributions in the field of industrial relations. For my part, it was an honour and a privilege to work alongside consummate professionals who share my passion for teaching and learning.

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Instructor’s Manual to accompany Gunderson/Taras, 6e

Chapter 1

Canadian Labour and Employment Relations Chapter Overview In some ways the introductory chapter of any textbook is perhaps the most important for students.

Typically, this is where authors orient students and prepare them for what is to come. To some extent this text is no exception. The vignette serves to humanize, or make practical, the field of industrial relations for readers. What student cannot identify with holding down, for lack of a better word, a lousy job with low pay, no benefits, and less than ideal working conditions? Such a less than pleasant, hopefully temporary employment situation typifies what industrial relations is about; namely, all aspects of the employment relationship.

Some important developments in industrial relations are highlighted, including the growing diversity of the Canadian labour force. The 2007 decision of the Supreme Court of Canada illustrates how the legal view of industrial relations has evolved within the context of the Charter of Rights and Freedoms.

After some basic terminology is addressed, the dominant approaches, or “schools,” in Canadian industrial relations are explained and expanded upon. The first is the systems theory perspective with its model of industrial relations and the second is the political economy approach. The basic tenets and criticisms of each approach are highlighted.

The field of human resources management (HRM) is introduced and compared with that of industrial relations. The similarities and four main differences are discussed in order to give students a stronger conceptual grasp of the diversity of perspectives that are found in industrial relations. Often, the solutions proposed by various stakeholders to resolve workplace issues or problems are the direct result of their respective perspectives, or underlying ideologies, about what the employment relationship means to them. Conceptually-speaking, we can think of these stakeholders as belonging to distinctive ideological “camps” within the industrial relations system.

To further strengthen students’ understanding, they are introduced to the critical ingredients of Canadian industrial relations such as decentralization, our distinctive values, multi-party system, and the significant contributions of Mackenzie King. The influence of United States and the differences between the two countries are highlighted.

The chapter ends with important points about the changing nature of the workplace and the resulting effects on individual workers in Canada, as well as a summary of three major challenges facing Canadian industrial relations.

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Lecture Outline and PowerPoint Slides What’s Industrial Relations?

Slide 1.1

It’s an interdisciplinary field of study  The field benefits from the contribution of experts from diverse fields such as law, economics, psychology, sociology, etc.  This also means that no one group of experts dominates or “owns” industrial relations.

Industrial relations (IR) encompasses all aspect of the employment relationship  It not only deals with unionized work environments, but also those that are non-unionized, whether in the private or public sector.

What’s Labour Relations?

Slide 1.2

Labour relations (LR) is a subset of industrial relations  Labour relations is a field of study concerned with organized labour (unions) and management.  As such, its focus is narrower than IR.  Labour relations looks at the employment relationship within a collective bargaining regime.

What’s Employment Relations?

Slide 1.3

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Employment relations is a field of study concerned with the relationship between an individual employee and an employer.

The relationship exists in a non-union environment.

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Human Resources Management Slide 1.4

Human resources management (HRM) is a subset of IR  The field of human resources management evolved from personnel management.  HRM is concerned with the how the firm manages and relates to its employees.  In most firms, HRM would include functions like payroll, recruitment and selection, training and organizational development, health and safety, and compensation.

NOTE: Students may confuse the distinctions being made between IR, LR, and HRM based on common corporate departmentalization practices. For example, in some companies the responsibilities for labour relations reside within HR departments. In others, labour relations may be placed in its own department.

Putting It All in Context Industrial relations encompasses both the fields of HRM and LR  Industrial relations as a field of study has a broader focus than either LR or HRM.

Differences Between IR and HRM (refer to Table 1.1 on page 10) Slide 1.5

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HRM has become an integral part of most business and management faculties. This follows the trend of many organizations as they shift management focus to “people” and how the firm’s success is enabled through its employees. HRM often regards unions as unnecessary given their view that what’s good for the firm is also good for employees.

IR is often seen by HRM as a necessary only to the extent that IR can help HRM translate and negotiate employee initiatives with unions.

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The Two Dominant Approaches, or “Schools,” in Canadian IR Slide 1.6

The Political Economy approach has roots in Marxism  Concentrates on the inequities of the employment relationship.  Contends that the industrial relations system is skewed in favour of management at the expense of labour (workers).  They view the interests of labour as fundamentally and for the most part diametrically opposed to management.  Labour unions are seen as a way of addressing this imbalance. Other means include changing labour laws and developing better social policies.

Systems Theory is centrist in orientation  It is also referred to as the institutional approach.  Moderate view, which relies on the model of industrial relations to study and explain the employment relationship.  Arguably the most objective of all approaches.  Collective bargaining and negotiation are seen as the primary devices for mitigating, if not resolving, conflicts between management and labour.

Both approaches have significantly enriched our understanding of IR  Both approaches can be thought of as existing on a continuum from left to right, although they are not polar opposites.  A less dominant approach or “school” is neoclassical, which is the polar opposite of the political economy approach.  The neoclassical approach has roots in Adam Smith’s brand of economics, which espouses the virtues of the free market. Not unexpectedly, this approach holds a dim view of labour unions and their effect on the “equilibrium wage.”

The Uniqueness of Canadian Industrial Relations Slide 1.7

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Decentralized and diverse  The Canadian industrial relations system mirrors our decentralized form of government.  While about 10% of the workforce is employed in the federally regulated sector and is governed by federal labour and employment laws, the remaining 90% of Canadian workers are governed by different employment and labour laws based on the province in which they reside.

The union density in Canada is generally accepted to be slightly over 30%, while in the US it is under 14%.

Unlike the US, Canada has a dedicated labour party.

Many of the present day features found in various conversion mechanisms are the result of the efforts and vision of Mackenzie King.

In the present as in the past the Canadian industrial relations system continues to be shaped to .

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some degree by socio-political and economic pressures originating in the in the United States.

The economies of both countries are so intertwined as to make this inevitable. Yet, Canadians remain different in many respects.

Canadians benefit from a diversity of political ideologies, which is only possible in a multiparty democracy.

There is a distinct Canadian value system that promotes, or is at least more tolerant of, socialist ideals. This is reflected in our social policies and labour laws.

The Changing Workplace Slide 1.8

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The rate of unionization is Canada is currently about 30% of the paid workforce and trending downward.  A number of employees have access to “union-like” arrangements, such as joint councils and access to adjudication of wrongful/unjust dismissal claims.  Loss of traditional manufacturing unionized jobs.  Intergenerational differences are challenging employers to consider work–life balance.  The participation rate of women and new immigrants in the workforce continues to grow.  Compared to Baby Boomers, Gen X and Y workers are much more likely to change jobs frequently.  Gen Y employees tend to prefer team concepts in the workplace more than previous generations (Gen X and Baby Boomers).  Labour shortages in many fields and industries have forced employers and unions to rethink long-standing practices and rules to attract and retain employees.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. Define the following terms: a) Labour relations (p. 5) b) Industrial relations (p. 5) c) Human resources management (HRM) (p. 10) 2. What was the importance of the Supreme Court of Canada’s ruling in Health Sciences and Support Bargaining Assoc. v. British Columbia? Collective bargaining is protected under the Charter’s right of freedom of association 3. What are the two dominant approaches or “schools” in Canadian industrial relations?

Systems Theory (p. 6); Political Economy (p. 6) 4. As in all fields of study there exists a healthy debate about the merits of one approach compared to another. a) Summarize the main criticism against the system theory approach. (p. 7) b) Summarize the main criticism against the political economy approach. (p. 7) 5. What are the four fundamental differences between HRM and IR?  HRM focuses on shared interests, while IR assumes inherent conflict exists. (p. 10)  HRM is unitarist, whereas IR is pluralist. (p. 10)  HRM develops and administers policies to achieve organizational/corporate (management) goals. On the other hand, IR focuses on policies, including collective agreements, that regulate the rights and obligations of the various parties. (p. 11)  HRM examines and is concerned with the employment relationship on an individual level, while IR does the same but on a collectivist level. (p. 11) 6. What percentage of the Canadian workforce is governed by federal labour and employment law?

About 8.4% (p. 12) 7. One of the more glaring differences between the state of industrial relations in Canada and the US is illustrated by union density. a) What is the union density in Canada?

Slightly more than 30% (p. 17) b) What is the union density in the US? Less than 14% (p. 18) 8. Why do the authors recommend that all students be taught industrial relations? Do you agree?

Why or why not?

Some of that answer can be found on pages 9 and 19. However, students should be expected to “connect the dots,” as it were, by referring to the importance of the effects/outcomes of industrial relations in their own lives and in Canadian society as a whole.

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9. According to the authors, no single Canadian was as influential in shaping our present day industrial relations system as Mackenzie King. What were his most significant contributions? (p. 16)

Beyond-the-text questions 10. Many people have strong opinions about the benefits or disadvantages of unions. What are unions, and what do they do?

11. Explain what a collective agreement is.

12. In what way(s) is the process of collective bargaining similar, yet different from, individual negotiations between one manager and his/her employee?

13. Often, workers complain about having to pay union dues. What are union dues, and what are they used for?

14. Arbitration is one of the mechanisms available for converting the inputs to outputs. What is the difference between rights and interest arbitration?

Class Activity Purpose This exercise encourages students to apply a stakeholder perspective with respect to debates/issues that come up in industrial relations. It requires them to demonstrate their understanding of the different focus and ideologies by playing out the roles of union representatives and HR managers. This exercise also provides an opportunity for instructors to guide the discussion and point out differences between the various stakeholders when faced with a typical IR issue.

Suggestion for instructors Divide the class into several groups representing management (HR) and labour (union). Allow each group 10–15 minutes to meet and develop convincing arguments consistent with their assigned roles.

Instruction to students With your team members, prepare to present a cogent argument to support the following statement attributed to Barbash on page 11 of your text: “It is the labour problem which creates unions, not unions which create labour problems.” Remember to assume the role you have been assigned.

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Chapter 2

Understanding the Unionization Decision Chapter Overview Achieving union representation does not happen by itself. The essential ingredient required is the will of workers who choose to be represented by a union. Throughout Canada the default situation is a nonunion workplace.

This chapter represents the first of five chapters which look at the role of actors in the industrial relations (IR) system. The chapter begins by discussing two general rationales that help us understand why employees would choose to unionize. The first is the economic rationale; the second is the voice rationale. Then, a brief look at situations where the choice to unionize has already been made follows.

Next, we look at recent surveys dealing with the expectations workers have about unions and discuss differences between Canadian and American workers. Moreover, since the future of unions is inexorably linked to young workers, some interesting research findings about this unique group are examined and discussed. From the group level we move to the individual level, which is where the choice to unionize is ultimately made.

In the last part of the chapter, we attempt to answer the question: What factors predispose individuals to choose union representation and what environmental opportunities need to be in place for unionization to occur? Various factors contributing to the opportunity and propensity of individuals to unionize are explained. These explanations, in addition to the various rationales provided in the first part of the chapter, help round out our understanding of how and why unions form in the predominantly non-unionized Canadian workplace.

The chapter concludes with the introduction of a general model of the unionization process and its three distinct phases. The model helps put into context where the decision to unionize happens in the sequence of events leading up to the culmination of successful union representation for workers.

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Lecture Outline and PowerPoint Slides The Actors in the Model of IR System Slide 2.1

Chapter 2: Understanding the Unionization Decision  An Industrial Relations Model is comprised of four parts: actors, external inputs, conversion process/interaction, and effects/outcome.  Chapter two is the first of five chapters that deals with the actors’ part of the model.  The emphasis in chapter two is on workers themselves. IR scholars and practitioners are particularly interested in why workers choose to join unions, what kinds of workers are most predisposed to joining, and what conditions facilitate this process.

Why and How Employees Join Unions Slide 2.2

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Three general hypotheses used by IR scholars for explanation  In order to explore the reasons why employees choose to join unions, IR scholars rely on three general hypotheses.  The first explanation (hypothesis) proposes that workers make their decisions on the basis of economic reasons (economic rationale).  Another proposed explanation is that workers chose to join unions in order to gain a say (voice) in the way decisions are made in their workplaces (voice rationale).

The third general hypothesis deals with situations where the decision to join was imposed under some specific or unique set of circumstances.

Elements of the Economic Rationale Slide 2.3

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1. Fairness and equity  The first element of the economic rationale is the concept of fairness and equity.  Setting aside the argument about the subjectivity of fairness, what is most important is the perception workers have. In this case, perception is truly reality, with very real consequences.  According to equity theory, workers compare their own inputs (efforts) to their outcomes (rewards). If this input/outcome (I/O) ratio is relatively close to 1:1, they will likely perceive their employment situation to be fair.

Workers also compare their I/O to each other to validate their notions of equity.

On the basis of these evaluations and comparisons, workers may choose to join unions to .

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rectify perceived situations of economic unfairness and inequity in the workplace.

The wage–effort bargain may be thought of as a simplified version of equity theory in that it only deals with the individual’s evaluation of his/her own situation, and not the comparative evaluation which takes place between colleagues.

Every worker has his/her own notion of what constitutes “an honest day’s pay for an honest day’s work,” and this forms the basis of an unwritten contract between employers and their employees. For IR scholars and practitioners alike, the perceived violation of this contract, or bargain, helps explain why workers might choose to join unions.

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Elements of the Economic Rationale Slide 2.4

2. Getting more  Workers who are unionized earn higher wages and enjoy superior benefits (e.g., vacations, sick days, extended health coverage, etc.) compared to their nonunionized counterparts. They are more likely to have pension plan coverage.  These facts lead some to conclude that workers choose to unionize to increase their bargaining power so they can maximize the economic rewards they receive at work.

Elements of the Economic Rationale Slide 2.5

3. Taking wages out of competition  The decision to join a union may be thought of as buying insurance against firms that might be tempted to gain a competitive advantage based on their lower wage bill.  A union negotiates wages and locks-in the rates in a contract, which cannot be changed during a specified time period. This offers some security for workers, and pressures management to find more creative ways to achieve a competitive advantage in the marketplace.  Another way unions take wages out of competition is by organizing an entire sector so that no one competitor has an advantage over the other. This compels all firms in a given sector to compete on some other basis, such as service, quality, speed of repairs, product choice, etc.

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Elements of the Voice Rationale Slide 2.6

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1. Workplace justice  Aside from notions of economic fairness, all workers possess a sense of what constitutes fair treatment and due process, which they expect to receive at work.  Most employees expect that if rules, procedures, or policies are in place these will be applied consistently by managers.  Most employees likely expect their managers to act or make decisions based on reason and not arbitrary indefensible motives (e.g., intimidation, pettiness, revenge, harassment, etc.).

Most employees also expect that if conflict or situations of misunderstanding arise they will have an opportunity to tell their side of the story before management imposes solutions or punishment.

If these basic principles of workplace democracy do not meet the workers’ expectations, they may seek to join a union in order to establish these principles, thereby gaining a “voice.”

Elements of the Voice Rationale Slide 2.7

2. To lobby the government and for political action  Beyond the workplace level, employees who join unions also gain access to a mechanism which can be used to lobby governments and provides an opportunity to become active in the political process.  At this level, such involvement is referred to as “social unionism.”

The Elements of the Voice Rationale Slide 2.8

3. For organizational involvement  Choosing to join a union provides employees the opportunity to become more involved in organizational affairs, such as policy development and the establishment of new or improved work rules and procedures.  Employees who are deeply committed to issues, such as the prevention of harassment and discrimination, have voice and are given opportunities to improve working conditions.

NOTE: See and discuss Case 2, Exhibit 2.4 on page 37 as an example of “voice,” which unions provide for their members.

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The Elements of the Voice Rationale Slide 2.9

4. In response to the current competitive environment  By joining a union workers may get an opportunity to exercise some degree of control over the future of their employment by having a say (voice) in implementation of new work processes or technologies.  New provisions in collective agreements can be negotiated to allow workers input on improving productivity and efficiency and lessen the likelihood of plant shutdowns or relocations to third-world facilities.

Pre-existing Condition of Employment Slide 2.10

First Condition  In some situations, the decision to join has already been made.  New employees may be hired into positions within an existing bargaining group and are automatically represented by a union because of previously negotiated union security arrangements with the employer (union shop).

Second Condition  Existing employees who are not represented by a union may be deemed in-scope (bargaining unit members) because of promotions, demotions, re-organizations, or Labour Relations Board decisions.

Third Condition  Provincial and federal governments may mandate that a union represent a particular group of employees in a profession.  For example, in many provinces, in order to be hired as a public school teacher one must be certified by a teacher’s association, which also acts as exclusive bargaining agent (union).

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What Workers Want Unions to Do for Them Slide 2.11

All survey results point to workplace-level issues  In many ways, what workers want and expect unions to do for them mirrors the various elements within the three broad rationales used to explain why they chose to join unions in the first place.  The differences between the expectations of American and Canadian workers are negligible.  Overwhelmingly, the responses from US and Canadian workers as to what they want from unions are workplacerelated and not what would be defined as falling into the realm of social unionism.

How Young Workers Feel About Unions Slide 2.12

Findings of the Low and Rastin Study (2000)  The desire to join unions among young workers entering the workforce varies according to the length of time after graduation and level of education.  Upon graduation, most university and high-schooleducated students are neutral about their likelihood of joining a union.  A few years after graduation their neutrality wanes and is replaced with definite opinions about their likelihood of joining or not joining unions.

How Young Workers Feel About Unions Slide 2.13

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Findings of the Gomez et al study (2003)  Aside from level of education and the number of years after graduation, there are additional characteristics which are unique to young workers.  Young workers expressed a stronger desire for union membership (57%) than adult workers (50%) did.  Contrary to popular belief, young workers are only slightly less likely than adult workers to favour seniority clauses, even though such clauses tend to favour senior employees.

While all workers were more likely to prefer unionization if family members were also unionized, this tendency to be influenced was 3 times more pronounced among younger workers.

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The Role of Propensity in the Unionization Decision Slide 2.14

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Four factors which influence the propensity of individuals to unionize  Propensity refers to an individual’s preference based on his/her personal experiences, beliefs, attitudes, and perceptions. Propensity pre-disposes an individual’s likelihood of making a particular choice.  Workers who experience job dissatisfaction are more likely to unionize than workers who are satisfied.  Workers who believe unions can do a lot to help them are more likely to unionize than workers who believe unions can do little to help.

Those with favourable views about unions, warranted or not, are more likely to support unions than others who have unfavourable views of unions.

Workers are more likely to support unions whose image and conduct is consistent with their own. For example, professors are more likely to support university faculty associations (unions) that conduct themselves as professors would and not like a union representing transportation workers. Similarly, truckers are more to support a union whose image and conduct is like themselves and not professors.

The Role of Opportunity in the Unionization Decision Slide 2.15

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Four factors that affect the opportunity individuals have to unionize  In contrast to propensity, opportunities reside outside the individual and are found in the environment, at the workplace-level and beyond.  Some industries or sectors of the economy are historically easier to unionize than others are. For example, organizing workers in mining, forestry, or government is easier than it is in insurance, banking, or real estate.

The particular characteristics of a given union increase the level of opportunity to unionize.

Some unions are more efficient, aggressive, or adept at organizing workers than others.

The legal–legislative setting also influences the opportunity workers have to unionize. The vast majority of Canadian workers are governed by the labour laws of their respective provinces.

The procedures for joining a union, or for that matter who may be allowed to join unions, vary considerably from province to province. It is easier to join or form a union in some provinces (Quebec) than in others (Alberta).

Employer opposition to union organizing can have a major impact on the success or failure of a union certification campaign. Some organizations take a benign approach to employee unionization, others campaign against unionization within the confines of the laws, and some employers flout the law in order to stay union-free.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. What three general explanations are given for why and how workers choose to join unions?

Economic, voice, and pre-existing condition of employment. (p. 25) 2. Equity theory is used to explain the economic rationale for choosing to unionize. What other non-economic outcomes might affect an employee’s perception of fairness? Any intrinsic rewards such as praise, respect, status, sense of achievement, etc., should be accepted. (p. 28) Page 26 contains a brief description of equity theory.

3. According to equity theory, employees develop their perception of fairness by evaluating the ratio of inputs (I) to outcomes (O). In the employment relationship, what constitutes inputs?

Anything an employee contributes to the job would qualify. Typically, this includes time, skills, and knowledge. However, it also includes emotional labour, organizational citizenship behaviours, and opportunity costs. (p. 28) 4. Explain what is meant by the term “union shock effect.” It refers to the rapid pace of improvement in personnel policies because of recent unionization efforts. (p. 32) 5. In what ways can the voice gained by unionized workers actually improve the organization? It enables workers to speak more freely, and help management solve irritating issues. It lowers quit rates by 20–30%, thereby saving management some costs associated with turnover. Voice can also improve productivity by opening channels of communication between workers and their front-line managers. (p. 34) 6. There are three conditions under which the choice to join a union has already been made. What are they? 1) New employee hired into a bargaining group job; 2) as a result of transfer, promotion, or other re-organization; 3) as mandated by legislation or labour relations board decision. (p. 42) 7. List and describe the four factors that explain the propensity of workers to unionize. The four factors are: 1) Job dissatisfaction, 2) perceived union instrumentality, 3) perceived views about unions, 4) self-image. (p.48) 8. List and describe the four factors that affect the opportunity to unionize. The four factors are: 1) Type of industry and location of employment; 2) characteristics of the union; 3) public policy setting; 4) the degree of opposition by the employer. (p.49) 9. What are the three phases described in the unionization process model? The phases are: 1) Pre-organization; 2) union organizing; 3) post-certification. (p. 51)

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Beyond-the-text questions 10. Re-organizations and rightsizing (lay-offs) are increasingly common in our fast-paced new economy. Can you speculate on the negative implications such management initiatives may have on the existing workforce using the wage–effort bargain concept described on page 26?

11. Please read Case 2 on page 37 and the arbitrator’s decision and answer the following questions: a) In your opinion, what would the aggrieved employees’ recourse have been had they not been unionized? b) Do you have any suggestions as to how the union could have helped solve this issue, on behalf of its members?

Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

12. Debate the merits of the following statements made by Tom Hesse the UFCW representative who was interviewed in the vignette, “A Union Rep’s Views: Notes from an Interview.”

“A union isn’t a business; we have an ideology that allows us to make a broader range of decisions than if we simply wanted to make a profit and grow.”

“We [UFCW] have a moral vision.”

13. Comment or debate the merits of the following statement:

“The term ‘forced unionism’ is based on a myth invented by those with anti-union animus to advance the political agenda of corporatists. Curiously, the fact that most workplaces are by default non-union is never referred to as ‘forced non-unionism.’”

14. Is it legally possible for a newly created union to be granted certification by a labour board even when the majority of bargaining group members are opposed after the initial application has been made? Do you think this is fair?

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Chapter 3

Labour History and the Development of Modern Capitalism Chapter Overview The topic of unions rarely fails to elicit strong opinions, yet it is perhaps the one industrial relations (IR) topic so many know so little about. Where do unions come from? What is their purpose? How did they become the modern institutions they are today? Chapter three answers these and many other questions. It is fitting that we begin with a history of unions before diving headlong into the topics contained in chapter four, because to appreciate the present and prepare for the future, we should first study and understand the past. Labour history recalls the struggles of working men and women, and labour unions.

In this chapter, the message from the past comes through loud and clear—the rights and privileges workers enjoy and take for granted today were not freely given; they are the result of hard-won struggles by a succession of worker collectives dating back to the 14th century and perhaps before that.

Chapter three begins by explaining the origins of unions in Europe, a discussion of merchant capitalism—which in the author’s view was the driving force for expeditions to the new world—, and a brief description of what life was like in English Canada during the late 1700s and early 1800s. This is followed by a discussion of the economic development of Canada from merchant capital to industrial capital. Then, innovations in manufacturing such as Taylorism and Fordism, as well as new reengineering strategies, are explained within the context of the time–work bargain.

Woven throughout the chapter is valuable information about the evolution of unions in Canada from 1798 to 1956, which includes acknowledgment of important events that contributed to shaping the present-day labour movement. The conflict in ideologies between craft unionism and industrial unionism and its effects are also discussed. Also interwoven in the chapter are the many incremental changes in labour legislation which helped establish our Canadian IR system that regulates the conduct of both management and unions.

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Lecture Outline and PowerPoint Slides The Actors in the Model of IR System Slide 3.1

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Chapter 3: Labour History and the Development of Modern Capitalism  Chapter two discussed some of the factors which influence workers’ decisions to join unions. In chapter three, the origins and evolution of unions are discussed.  As the opening vignette suggests, our knowledge and views about the history of Canadian workers and unions has been highly influenced by corporate interests.  The typical industrial relations manager, who is mainly concerned with the here and now, has little regard for labour history stretching beyond a decade or two. This puts him/her at a disadvantage relative to his/her union counterparts, and may contribute to the tension between them.

Those who work in the labour movement typically share a collective sense of union history stretching back two or three centuries.

Labour history, for the most part, is quite different from the generic history most Canadian students learn in school.

Labour history focuses on the collective rights and struggles of workers as opposed to famous monarchs, militarists, mainstream politicians, or corporate leaders.

Canadian Labour History: Setting the Scene Slide 3.2

    



To appreciate labour history, it is helpful to consider the context of the times. What was it like to work in Canada in the 1800s and early 1900s?  In the 1850s, the majority of Canadians worked on familyowned farms, fishing ventures, or small businesses that they owned.  In the late 1800s, groups of highly skilled workers would simply inform their employers what the rate of pay would be and employers would agree or disagree without negotiating.

Until it was repealed in 1877, the employment relationship was governed by the Master and Servant Act. Under this Act, workers who quit without permission could be jailed.

In 1870, the average work week in Canada was about 63 hours.

In order to improve their quality of life, the Typographical Union (printers) went on strike to pressure the Toronto Globe to reduce their work week to 54 hours and pay overtime for anything above that.

The statutory holiday now known as Labour Day was introduced in 1894, through the lobbying efforts of the Knights of Labour, an early labour federation.

In the early 1900s, the hub of socialist and union activity was Calgary, along with Regina and Winnipeg. In fact, it was in Calgary where the One Big Union (OBU) (1919) and the Cooperative Commonwealth Federation (CCF) (1933) were formed. The CCF was the forerunner of what is now the New Democratic Party (NDP). .

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Themes in Canadian Labour History Slide 3.3

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Labour history is different than history traditionally taught in schools  For the most part, labour history focuses on average workers and the progression of their individual and collective rights at work.  Labour history is inexorably tied to the economic and sociolegal-political development of our country. In other words, union origins and evolution cannot be taught or understood without considering Canada’s economic development and the changes in legislation which occurred during the period being studied.

There are three themes, or threads which run throughout labour history: Union evolution, economic development, and labour legislation.

Each theme studied individually and then together helps paint a clearer picture of the progress made by Canadian workers and the role of the labour movement in achieving those improvements.

Economic Development: From Merchant to Industrial Capital Slide 3.4

1. Merchant Capitalism  Merchant, or trading, capitalism, can be defined as the form of profit which is made from buying a commodity at one price and selling at a higher one. The driving force of merchant capital is profit through exchange or trade.  Canada’s economy was mainly based on trading furs, goods from agriculture, and fishing until about 1850.  Merchant capitalism slowly gave way to industrial capitalism after 1850 due to: 1) the transformation of workshops into factories, 2) the displacement of low-skilled workers from the land, and 3) the commercial growth of cities and towns.

2. Industrial Capitalism  Industrial capitalism is the mechanism whereby profits are generated from the manufacture of goods which are then sold at more than what it cost to create those goods.  Part of the cost of manufacturing involves paying wages in exchange for workers’ time. This is sometimes referred to as the “time–work bargain,” and it is the foundation upon which the field of industrial relations was built.  “Taylorism” is named after Frederick Winslow Taylor III, a Harvard-educated engineer who spent most of his career in the US steel industry.  Taylorism, also known as “scientific management,” is the process whereby jobs are deconstructed into simplified and standardized bits, which results in a separation between the thinking and doing components of the job. The doing part is then more easily managed (scientifically) in order to maximize workforce output.  “Fordism” is named after a manufacturing process initiated by Henry Ford, who founded the Ford Motor Company in 1903 in Detroit.  Fordism improves upon Taylorism in that it uses a flow-line principle of assembly work. Instead of employees moving about doing assembly work, the work is brought to them via an assembly line. .

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     

The net effect of Fordism was to further maximize production and reduce costs beyond what Taylorism (scientific management) could do.

“Fordism–Keynesianism”; Keynesianism is a school of economics that advocates public spending in order to stimulate consumer demand. It is named after a leading economist John Maynard Keynes.

The combination of Fordism and Keynesianism provided North America with a balance between the quest for ever-efficient manufacturing and fiscal and economic policies designed to increase consumption by the public. This period of relative balance lasted until the 1970s.

“Re-engineering”; Sometime in the 1970s, corporations wanting to maximize shareholder equity sought to re-organize the time–work bargain beyond Taylorism and Fordism.

Re-engineering involves designing more flexible labour processes, using cheaper offshore labour markets and employing more part-time, casual, and contract workers domestically.

Since the 1970s, most governments have come to believe that deregulation, freer trade, globalization, and strengthening the market economy are in the public interest.

Union Evolution in Canada (1798–1919) Slide 3.5

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1. Craft-international unions  Unions initially formed around social groupings of likeminded skilled workers who were interested in protecting the exclusivity of their crafts, thereby maintaining their way of life.  Craft unions first appeared on the Canadian scene in 1798 in Halifax with the organization of shipwrights and other tradesmen.  Most craft unions were organized locally and operated independently from each other. The spread of railway networks facilitated the spread of international unions, beginning with the British Amalgamated Society of Engineers in the 1850s.

Non-skilled workers were seen as a threat by craft union members.

2. Industrial Unionism  The emergence and eventual rise of industrial unionism in Canada began with the formation of the Knights of Labour in 1867.  In contrast to craft unions that promoted exclusivity based on various skills, the Knights of Labour were committed to the principles of inclusiveness for the benefit of all workers regardless of their skills, gender, religion, or nationality.  The rivalry between craft unions and the Knights of Labour factions in the Trades and Labour Congress (TLC) culminated in 1902 at the Berlin Convention (now Kitchener, ON) with the expulsion of the Knights of Labour from the TLC.  Industrial unionism picked up steam in 1905 with the emergence of the International Workers of the World (IWW), or “Wobblies” as they came to be known. The Wobblies combined industrial unionism with a radical philosophy.  Following in the tradition of the Knights of Labour and the Wobblies, the One Big Union (OBU), formed in Calgary in 1919, championed the ideals of industrial unionism and radicalism to counteract what was seen as eastern-dominated craft unions lead by the TLC.  The Winnipeg General Strike took place May 15, 1919. The strike involved as many as 30,000 workers and virtually shut down the entire city.  The cause of the strike, its aftermath, and its implications for the labour movement have been the focus of debate, discussion, and study to this day for many Canadians, especially IR scholars and .

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

labour historians.

Many IR scholars point to the Winnipeg General Strike as a watershed event in the labour movement, as well as Canadian society.

Union Evolution in Canada (1920…)

Slide 3.6

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1. Internal strife (1920–1950s)  The longstanding conflict between craft unionists and industrial unionists continued unabated in the 1920s and 1930s. This ideological conflict was institutionalized by the formation of the various labour federations and was punctuated by a series of purges at various times by the two opposing camps in Canada and in the US.  The American Federation of Labour (AFL) supported the principles of craft unionism, as did the TLC in Canada.

The Congress of International Organizations (CIO) shared an ideological kinship with the Canadian Congress of Labour (CCL) that supported industrial unionism.

2. Mergers and reconciliation (1950…)  In the mid 1950s, a new era of reconciliation dawned between long-time rivals when, in 1955, the AFL and CIO merged. This was soon followed by the TLC and CCL merger a year later.

Together, the TLC and CCL would form the Canadian Labour Congress (CLC).

Labour Legislation Slide 3.7

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

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

The third thread or theme in Canadian labour history concerns the changes which occurred in labour legislation.  Marking these events is essential in developing a historical context and gaining a deeper understanding of how unions progressed in the last two centuries.  Without the incremental changes in labour legislation, it is doubtful whether modern-day Canadian workers would enjoy the rights and privileges they now take for granted. It is equally doubtful whether unions would be as influential as they are today in their integral role as actors in the IR system.

Prior to the introduction of the Trade Union Act by the government of Prime Minister John A. McDonald in 1872, unions were essentially treated by the courts as criminal conspiracies intent on restraining trade.

The passing of the Trade Union Act, the Criminal Law Amendment Act (1872), the Breaches of Contract Act (1877), and the repeal of the Master and Servant Act (1877), through the intense lobbying effort of labour activists, meant that unions were now legally allowed to organize and strike.

While unions legally had the right to strike, they achieved little if any success doing so. Of the many strikes which did occur during this period, the Lethbridge Coal Strike in 1906 stands out as one of the most acrimonious, and the one which prompted the Laurier Government to enact the Industrial Disputes Investigation (IDI) Act in 1907.

The IDI Act required that strikes and lockouts be suspended until an appointed conciliation officer, and then later, a conciliation board, if needed, examined the cause(s) of the dispute and .

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   

made non-binding recommendations.

The enactment of the Wagner Act, by the Roosevelt administration in the US in 1935 was an important legislative development which recognized the rights of workers to join unions without fear of retribution from employers.

The Wagner Act stated explicitly what constituted unfair labour practices on the part of employers and compelled them to bargain in good faith with unions.

The Wagner Act heavily influenced the introduction of the National War Labour Order (PC 1003) in Canada in 1944, which incorporated many of the same features.

PC 1003, while initially a temporary order, was made permanent in 1948. It provided a framework for the provinces to follow and influenced many of the present-day collective labour laws the actors in the IR system are required to follow.

Geo-Social Context Slide 3.8

 

This eighth PowerPoint® slide may be helpful in orienting students from a geo-social perspective.

The events which took place in Canada and the US that are discussed and examined in chapter three were all influenced, to some degree, by worldwide events during this period.

Differences Between Craft and Industrial Unions Slide 3.9

   

1. Craft Unionism  Craft unions are organized around the distinct trades or skills of their members usually attained through an apprenticeship program, such as electricians, welders, plumbers, carpenters, etc.  These tradespersons are quite understandably proud of their skills and at the same time recognize the need to protect the skill level within their crafts, as well as limit the supply of labour.

Plumbers do not want electricians to install sinks and toilets and likewise electricians are not fond of plumbers who install electrical panels, irrespective of any cross training or skill level.

This is known as protecting one’s jurisdiction.

Trades persons object to downgrading education and training which would saturate the labour force with less skilled workers. Therefore, they support exclusivity of membership and certification.

Craft unionism is associated with an ideology of “business unionism.” Simply put, business unionism advocates concentrating on narrowly representing the interests of one’s members who are skilled at a specific worksite or within a given industry.

Craft unionists are sometimes criticized by industrial unionists for being too narrowly focused, short sighted, and even elitist to some degree.

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2. Industrial Unionism  The goal of industrial unionists is to organize all workers along industry lines or community of interest (same employer) regardless of skill or trade.  Industrial unionism is an ideology with an underlying belief that the employment relationship in a capitalist society is exploitive in nature and therefore all workers need representation to avoid being exploited.  Industrial unionists support lobbying governments for change and being active in the sociopolitical process in order to improve the time–work bargain and human rights for all workers, whether they be unionized or not.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. Modern craft unions trace their roots to the guild system dating back to the turn of the 14th century. What were guilds, and what purpose did they serve? (p. 57) 2. Define merchant capital. (p. 57) 3. According to the author, how did merchant capitalists contribute to the discovery of America? (p. 59) 4. How did most Canadians earn a living prior to 1850? (p. 59)

5. Define “industrial capital.” (p. 60) 6. What three factors were responsible for the transformation from merchant capital to industrial capital in Canada? (p. 60) 7. Early craft unions exercised considerable power relative to their employers. What were two sources of their power which the author cites? (p. 62) 8. What motivated the McDonald government to pass the Trade Union Act in 1872, along with other progressive labour-related legislation between 1872 and 1877? (pp. 63–64) 9. Who were the Knights of Labour and what were the goals of their organization? (p. 64) 10. Explain what Taylorism is. (pp. 65–66) 11. The Winnipeg General Strike took place May 15, 1919, and involved about 30,000 workers.

What were the striking workers demanding? (p. 67) 12. In what way(s) is Fordism different from Taylorism? In what way(s) are the two similar? (p. 68) 13. Which of the principles of the US Wagner Act were incorporated into PC 1003 in 1944? (p.69) 14. How is the ideology of industrial unionism different from that of craft unionism? (pp.68–69) 15. The workplace of the 1970s and beyond has been marked by a fundamental shift in the time– work bargain of yesteryears by what the author calls “re-engineering.” What are some of the effects of re-engineering on the workforce? (p.70)

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Beyond-the-text questions 16. Consider the following statement in the opening vignette: “An understanding of the past can inform our understanding of the present and illuminate projects and strategies for a future.”

How does this quotation apply to students, managers, and unionists involved in industrial relations?

17. According to the author, in the opening vignette, with the exception of union activists (which typically include all labour representatives), industrial relations practitioners (management) are woefully incognizant of labour history. Do you agree with this opinion? Why or why not?

18. Do you think it makes any difference whether IR practitioners who represent management are as knowledgeable in labour history as their union counterparts?

19. The average work week in the 1870s was 63 hours. What is the average work week now?

(Use Statistics Canada Labour Force Survey information to answer.)

20. To this day, J.S. Woodsworth is revered in the labour movement as a pioneer and visionary. Who was he and what did he accomplish that was so remarkable?

21. William Lyon Mackenzie King, who served as our Prime Minister from 1921 to 1930 and again from 1935 to 1948, was undoubtedly eccentric on many levels. Nonetheless, as Canada’s first Deputy Minister of Labour between 1900 and 1908, he was instrumental in implementing many enlightened, labour-related initiatives. In what ways did King contribute to the advancement of the Canadian IR system?

22. One of the interesting features of this text is that many of the chapters are written from different IR perspectives. Where would you place the author of chapter three on an ideological continuum? Please provide examples to support your answer.

23. The ideological differences between business unionism and social unionism are still a source of division within the house of labour. Provide recent examples to debunk the myth of solidarity between these two factions within the labour movement.

Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

24. Labour Day, reduced work weeks, the legalization of unions, freedom of association, minimum wage, basic employment standards, human rights, maternity leave, employment equity, and a host of other labour-related legislation were enacted in large part due to pressure from social unionists. What do you feel is the next important area of the employment relationship which needs to be improved? For example, for many academics, the issue of the constitutionality of mandatory retirement ranks high on their list.

25. The author makes the point, at the bottom of page 62, that by trading workers’ time for money and by using that time efficiently, employers are able to derive value over and above what they pay workers. Therefore, by definition, all employment relationships are fundamentally exploitive in nature, since the employer always derives more than the employee gets in exchange for his/her time. Do you agree with this conclusion? .

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26. Discuss the merits of the following statement: While the effects of Taylorism and Fordism on workers is undeniable, the author is unnecessarily harsh in his depiction of these innovators and what they were trying to achieve.

27. The Winnipeg General Strike marked a turning point for organized labour in many respects. In fact, labour leaders learned some important lessons from it and adapted their future strategies accordingly. How did the event itself and its aftermath contribute to social unionism?

28. Comment on the merits of the following statement: “OK, having learned where unions come from and how they were instrumental in improving the lot of workers in the 18th to early 20th century, I’ll grant you they were useful. However, given the multitude of labour and human rights legislation which protect workers today and given the fundamental shift which has and is continuing to occur in our economy, unions are anathema to economic development and progress nowadays. In short, while workers of the past might have needed unions, modern workers no longer need union representation.”

Class Activity 1. Union representative guest-speaker This activity involves inviting a knowledgeable guest speaker who represents a union or labour federation to address the class. The purpose is to impart on students the importance that labour activists attach to labour history, the lessons they derive from this knowledge, and how they use this knowledge in their daily work.

2. Film presentation As a suggestion, instructors may wish to consider showing the film ON STRIKE: The Winnipeg General Strike, 1919 produced by the National Film Board. The catalogue number is C9191 111. The film runs for approximately 19 minutes, which leaves class time for comment or discussion after viewing.

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Chapter 4

Unions: Membership, Structures, Actions, and Challenges Chapter Overview Chapter four is a natural continuation of the discussion and information provided in chapter three, which dealt with the origins and evolution of unions, as well as the economic development and changes in labour legislation in Canada. Knowing where unions come from is as important as knowing what they do in a contemporary setting.

This chapter presents a contemporary union portrait to complete the profiling of this integral actor in the industrial relations (IR) system. The first part deals with the importance of establishing baseline data related to union membership. The implications and meanings of each measure are discussed in general terms. This general data are then disaggregated based on industry, sector, and occupation, and in each case analysed or interpreted for deeper understanding. A comparison of union-related data in Canada and the US follows.

The second part of the chapter introduces the organizational structure of unions, beginning with bargaining certificates, locals, and national and international unions, concluding with federations and congresses. The challenges and problems facing union leaders at each level of the structure are highlighted and discussed. What is evident is that many of the issues union leaders face are similar to those all organizations struggle with, including corporations. For example, allocating and managing limited resources (money), managing diversity, and encouraging member participation.

The chapter closes with a discussion of some present-day issues facing the labour movement, such as shifting bargaining demands in response to workplace re-engineering initiatives, and the changing preferences and needs of members. The struggle to coalesce the divergent interests and ideologies of traditional unionism with that of socio-political unionism is once again examined, as it was in chapter three, but this time it is in a contemporary setting involving globalization, increased competition, and workplace reorganization.

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Lecture Outline and PowerPoint Slides The Actors in the Model of IR System Slide 4.1

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Chapter 4: Unions: Membership, Structures, Actions, and Challenges  Chapter four is the second of two chapters which deals with unions.  Chapter three discussed where labour unions originated, their evolution, and the purpose they serve.  This chapter answers the following question: How do unions work? The answer begins with an explanation of union membership and structure.

Discussion follows about the various challenges unions face in the present era of globalization and corporatism.

Union Membership & Bargaining Coverage Slide 4.2

1. Measuring membership  To assess the impact and influence of unions as integral actors in the IR system it is important to determine how many Canadian workers they actually represent.  Several measures are used from which differing information may be gleaned.

2. Membership composition  Disaggregating union membership and density based on various factors yields more insights by showing patterns and trends that affect unions and the modern workplace.

3. Canada–US comparisons  Comparing absolute membership and union density between Canada and the US contributes to a fuller understanding of North American trends.  This information is also useful for evaluating the success of the unions’ socio-political activism in both countries.

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1. Measuring Union Membership Essential Measures & Concepts Slide 4.3

   



The Canadian labour force in 2006 was about 14,800,000.

Of that, 4,441,000 were union members.  The absolute number of union members measures the number of workers that unions represent.  Increases in the absolute number of union members are a good indicator of the labour movement’s success at organizing new members.  Union density is expressed as a percentage of union members out of all workers in the labour force.

Union density equals absolute number of union members divided by the labour force: Union density (30%) = 4,441,000 ÷ 14,800,000.

Union density is a more useful measure of union success and influence in the economy.

Bargaining coverage is a larger number than absolute union members.

Bargaining coverage includes all workers covered by collective agreements, whether they are union members or not.

NOTE: To explain how a worker can be covered by a union contract without necessarily being a cardcarrying union member, an explanation of the Rand decision may be necessary.

Union Membership and Density Slides 4.4 and 4.5

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

Except for the year 1996, the absolute number of union members in Canada has increased every year since 1921.

The union density increased every year from 1921 to 1976 and has decreased each year since 1976.

If union density were calculated using bargaining coverage instead of absolute union members, the percentage would be higher (32.2% vs. 31.1%).

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2. Membership Composition Union Density by Province (2007) Slide 4.6

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Union density varies by province due to: 1) the dominant industry, 2) expansion and contraction of provincial labour force, and 3) community and regional attitudes toward unionism and prevailing labour laws.

Alberta’s union density is the lowest in the country (22.3%). This is partially explained by the predominance of the oil and gas industry with its traditionally low rate of unionization, and a legislative climate that is the least favourable for unions in Canada.

Newfoundland has the highest union density of any province (36.6%).

Union Density by Industry Slide 4.7

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 

Union density is highest in the education sector (67.8%) and other industries where there is a high degree of public ownership or regulation—public administration (67.6%), utilities (66.7%), health care (53.3%).

Interestingly, union density remains low in sectors that are growing fastest—accommodation and food (7.4%), and finance (9.7%).

The density in the traditionally unionized manufacturing sector has declined from 44.3% in 1982 to 38.4 % in 1995, to 27.7% in 2007.

Union Density by Sector & Occupation Slide 4.8

  

The union density among workers in the public sector is 71.7%.

By contrast, the union density in the private sector is 17% As expected, occupations with the highest levels of union density also fall within the public sector.

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3. Canada–US Comparisons Slide 4.9

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

There is a real difference between Canadian and American society, and this is reflected in the data comparing union membership and density in the two countries.  While there are more union members in the US, as would be expected, the union density has been declining at an alarming rate, since 1966.  The influence of organized labour in the US economy peaked in 1951, when the density reached 31.7%. In the year 2006, union density it was a meagre 12%.

Reasons proposed for the decline in US union density compared to Canada abound: 1) less favourable union legislation, 2) proportion of the workforce employed in public sector, 3) failure of the labour movement to embrace social unionism, 4) success of Reaganomics and corporatism.

Union Structure Slide 4.10

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The structure of unions is best explained starting with the smallest unit of analysis, then working up toward the federation or congress level.

When a union is certified, it is issued a bargaining certificate giving it the exclusive right to act as bargaining agent for specific group of workers who are collectively referred to as a bargaining or certification unit.

Federations and congresses operate at a macro-level of the union structure. They can be provincial or national, and they serve as lobby groups and regulatory bodies within the labour movement.

Union Locals Slide 4.11

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

Locals are the cornerstones of the union structure. For business students, they can be thought of as franchises.  Typically, one local will represent only a single bargaining unit. In other cases, one local may represent multiple bargaining units.  There were about 15,500 locals (franchises). All but 270 of those had affiliations with larger unions or labour congresses. The affiliation gives union locals access to expertise and support.

Union locals operate more or less autonomously from the national or international unions with which they are affiliated.

Workers who are represented by unions typically pay dues that amount to 1–2% of their salary.

These dues are used for the administration of the local and for promoting the interests of the members through collective bargaining and arbitrations. .

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

Governance at the local level is voluntary and based on democratic principles. However, on occasion, the iron law of oligarchy can stifle the democratic process.

National and International Unions   

The Canadian Union of Public Employees (CUPE), with its headquarters in Ottawa, is the largest national union. CUPE represents 12.3% of the 4,444,100 union members in Canada.

The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial, and Service Workers Union (United Steelworkers or USW) is the largest international union in Canada.

Similar to employers, several unions have merged in recent years to improve efficiencies and gain strength in certain industries and sectors. The USW is a good example of this trend.

Labour Federations and Congresses Slide 4.12

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The largest and perhaps the most influential labour congress in Canada is the Canadian Labour Congress (CLC).

The second largest labour federation is the Quebec-based Confédération des syndicats nationaux (CSN).

Congresses and federations may operate at the provincial or national level. Their activities include lobbying governments for more favourable labour standards and being involved in various policy-making activities.

Union Actions and Challenges Slide 4.13

  

Collective bargaining  Collective bargaining on behalf of the bargaining unit is the core function of what unions do. Other important functions include maintaining and protecting workers’ rights and privileges flowing from the collective agreement.  These core functions need to be balanced with the need to organize additional workers, which helps maintain and increase labour market penetration (union density).  The present challenge for unions during bargaining is trying to resist employer demands for concessions that could adversely affect the bargaining unit, while also being cognizant of competitive pressures faced by the employer.

Pattern bargaining is one strategy being used to retain bargaining power.

Currently, the most important bargaining issues for unions are: 1) protecting wages and benefits, 2) maintaining input on issues of workplace re-organization, including training, increased flexibility, and outsourcing, and 3) promoting quality of life and work initiatives.

Other considerations for unions include balancing the needs of the collective while advancing the interests of minorities within the bargaining unit.

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Workplace Re-engineering Slide 4.14

Responding to reorganization  The post-Fordism–Keynesianism era of re-engineering (chapter 3) creates some unique challenges for the labour movement.  Unions who resist reorganization or re-engineering initiatives risk being labelled militant, and possible plant closures and relocations to offshore locations.  Unions that view themselves as progressive may cooperate with management to the detriment of the bargaining unit.

Globalization & competition  Freer trade and globalization has resulted in more opportunities, some would claim temptations, for employers seeking lower-cost labour markets in developing countries.  For companies choosing to remain in Canada and the US, there is overwhelming pressure to reduce labour costs to match those of competitors with offshore facilities.

New technology & processes  In addition to reorganization and globalization, unions are faced with changes in technology which affect the way work is performed.  The impact of technological improvements that ameliorate the quality and efficiency of manufacturing or the delivery of services cannot be understated or ignored.  The challenge for unions is anticipating the introduction of new technologies and their effects on individuals in the bargaining unit. Hence, the importance unions place on negotiating innovative training provisions in collective agreements.

Challenges Beyond the Workplace Slide 4.15

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Economic restructuring  The labour movement has responded to changes resulting from economic restructuring by being involved in consultative and representative forums.  The tri-partite Canadian Labour Market and Productivity Centre (CLMPC) was created in 1984 to promote better quality jobs.  The CLMPC was successful in establishing the Canadian Labour Force Development Board in 1991 to promote labour force training.

One of the best examples of sectoral initiatives is the bi-partite Canadian Steel Trade and Employment Conference (CSTEC), which deals with issues of trade and employmentadjustment questions in the steel industry.

Other labour-sponsored initiatives include the establishment of various RRSP-eligible, labour-friendly mutual funds.

Socio-political activism  The ideological schism between craft unions and industrial unions, which was chronicled and discussed in chapter three, still exists. .

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  

Advocates of business unionism, also referred to as bread-and-butter unionism, argue that precious and limited union dues should be used solely to improve the lot of the bargaining unit at the workplace level.

Industrial unionists, who largely support social unionism, argue the best way to improve workplace conditions for the bargaining unit and all workers in general is to be politically active.

Note that the UFCW invests in charitable causes much like many businesses and corporations.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. Define the following terms: a) union density b) bargaining coverage c) bargaining unit d) union local e) labour congress or federation 2. The union density in Canada in 2006 was about ________. 30% (p. 78) 3. The union density in the US in 2006 was about _______. 12% (p.79) 4. What was the total number of union members in Canada in 2006? 4,444,100 (p.80) 5. Which province has the highest union density? Newfoundland (p. 78) 6. Which province has the lowest union density? Alberta (p. 78) 7. According to the author, what three factors account for the variances in union density between provinces? 1) Predominant industry, 2) expansion and contraction of regional labour markets, 3) community attitudes toward unionism. (pp. 78–79) 8. In 1962, women comprised only 15.4% of the total union membership. In 2007, this percentage has risen to 50%. What challenges does this shift pose for the labour movement? This new reality means a shift from traditional bargaining demands to meet the needs of female union members, while trying not to alienate male members. (p. 96) 9. Explain the negative impact the iron law of oligarchy predicts upon representative democracy in a labour union. (p. 95) 10. According to the author, what is the difference between social unionism and social movement unionism? (p. 102) The following questions (11–13) refer to the vignette at the beginning of the chapter.

11. What issue or challenge does the first scenario (Union A) highlight? If you were a union leader, what course of action would you recommend?

12. In the second scenario (Union B), do you agree that by developing a call centre this union runs the risk of losing its collective capacity in the workplace? If so, why; if no, why not?

13. In the last scenario (Union C), the leadership is confronted with a difficult choice because of new workplace reorganization initiatives. Which course of action would you recommend and why?

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Beyond-the-text questions 14. The data contained in Table 4.1 reveals much about the trend in Canadian union density.

However, the percentages are provided in aggregate terms. Please find the union density data for the same period (1921–2007) which compare the private and public sectors. What trend does this data indicate? How is this trend different from the one deduced from Table 4.1?

15. The author of this chapter differentiates between social unionism and social movement unionism, whereas the author of chapter three chooses to deal with both forms as one category, which he refers to as social unionism. In your opinion, do you believe making the distinction between social unionism and social movement unionism is warranted? If so, why; if no, why not?

16. In view of management’s workplace re-engineering initiatives, do you believe it is necessary for unions to increase their militancy in order to maintain or increase a greater share of the economic gains for their members? If you answered no, what would you suggest as an alternative strategy?

If you answered yes, provide support your position.

Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

17. People who are employed in jobs with low wages, few benefits, and unfavourable working conditions are perhaps the most in need of union representation, yet they are the least unionized.

Setting aside the issue of limited financial resources and the high cost of organizing such workers, what other challenges does organizing these workers pose for unions? In other words, why is it so difficult for the labour movement to organize workers in the fast-food, accommodation, and beverage industries?

18. According to your text, a union’s greatest internal resource is high involvement by workers in the bargaining unit. The difficulty for unions is encouraging involvement, as this involvement is voluntary in nature. What recommendations do you have for unions wishing to increase involvement at the local level?

19. There are undoubtedly many intrinsic rewards for members who volunteer to serve their union locals. However, the reality for employees in many locals is that service must be given in addition to fulfilling the job duties they were hired to do. While in some cases, collective agreements include provisions for a limited amount of time off for union-related business, other collective agreements have no such provisions. In either case, the time is nowhere near the 100% their management counterparts get. Critics argue this unequal time distribution gives an unfair advantage to management when dealing with labour relations issues. Do you believe that in order to level the playing field, employees who serve on union executives ought to have the equivalent time off as their management counterparts? Why or why not?

20. Why do you think so many, if not the majority, of IR scholars in colleges and universities advocate that all management-related degrees and diplomas programs require students to complete at least one labour relations course?

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Chapter 5

The Management of Industrial Relations Chapter Overview This chapter examines the third actor in the industrial relations system—the employer. Of particular interest is the way employers manage industrial relations issues when their workforce is unionized.

The opening vignette provides an excellent example of how a company and its union worked to transform their relationship from adversarial to cooperative. Such considerations and challenges are frequently omitted from discussion in most management courses and texts that deal with human resources and organizational behaviour.

The first part of the chapter links the consideration of industrial relations issues with the strategic choices employers make. The results of research are shared and indicate that the impact of industrial relations (IR) issues, when making important strategic decisions, is considered less often than the public comment or political rhetoric indicate. It is also noted that companies indeed have IR strategies that guide and influence their degree of opposition to unions, yet do not formally or publicly announce them.

In the second part of the chapter, the determinants or constraints that influence which IR strategies employers adopt are listed and explained. Next, the three common elements of an industrial relations strategy are examined, beginning with the employer’s attitude toward unions, which leads them to use one of four ways to deal with unions. The second and third elements (relative compensation and workplace practice) of an IR strategy are also analyzed.

Having discussed the special considerations that employers in unionized settings deal with, the determinants which constrain and influence their choice of IR strategies, the common elements of these strategies, and the various ways those strategies are implemented, the chapter concludes with a brief description of three major managerial functions, and the unique nature of industrial relations staff and their role in an organizational setting.

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Lecture Outline and PowerPoint Slides The Actors in the Model of IR System Slide 5.1

Chapter 5: The Management of Industrial Relations  Recall that the actor part of the simplified model of the industrial relations system is comprised of labour (unions and workers), government and private agencies, and management (employers).  Chapter five deals with an integral, and arguably the most influential, actor in the model—management/employer.  Of particular interest in this chapter is how employers choose to deal with unions and the factors and constraints which influence those choices.

Industrial Relations and Management/Employer Decisions Slide 5.2

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The importance of IR considerations in management decisions  The importance placed on IR issues and factors when employers make high-level strategic decisions is less than most people think.  About 50% of companies consider IR concerns to be important when making investment and plant location decisions.  About 25% of employers consider IR-related factors, but do not deem these as very influential in their final decisions.

The remaining 25% of companies report that IR considerations have no impact on their decisions.

Linkages between IR and corporate decision making are strongest when investments in new plants are considered.

Consideration of industrial relations issues is also significant when companies contemplate adopting new technology or plan reorganization initiatives.

Management/Employer Industrial Relations Strategies Slide 5.3

  

Few Canadian companies have formal or explicit industrial relations strategies. Nonetheless, IR strategies are real and guide management’s actions.

The IR strategies of individual employers vary considerably and evolve over time.

Employers, in general, are opposed to unionization.

[Why?]

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 

Degree of opposition to unionization is dependent on: 1) experience with unionization, 2) ideology of controlling shareholders, and 3) the industry in which the company operates.

Typically, employers in the fast-food and retail sectors are vigorously opposed to unions. In contrast, employers in public utilities and the public sector are less opposed to unionization.

Factors Constraining Choice of Management/Employer Strategies Slide 5.4

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Many of the largest and most profitable companies in North America are unionized. However, for nonunionized employers, the perceived threat of unionization motivates them to adopt one strategy over another.  In already-unionized firms, management strategies are constrained by language contained in the collective agreement (an employment contract between the employer and the union).  The level of professionalism or effectiveness of the union tends to restrict the discretion of management.

Recent events in the union–management relationship such as strikes, lockouts, arbitrations, etc. can have a sobering effect on future employer strategies.

The legislative climate in a given province or jurisdiction (e.g., Alberta compared to Quebec) restricts the choice of strategies an employer has.

The historical and cultural union–management relationship in a specific workplace or industry is also a determinant in the choices employers make.

The relative bargaining power of the parties (management and union) not only affects the ongoing day-to-day relationship, but also what is agreed upon in the collective agreement.

Elements of an Industrial Relations Strategy Slide 5.5

1. Employer attitude about unions  Determines, to a large degree, which of four strategies management chooses to deal with unions.  Contributes to the ongoing labour–management relationship which can be either harmonious or antagonistic.



2. Relative/comparative compensation  Refers to the wage rates and benefits paid by competitors in the same industry.

Employers may choose to be wage leaders or followers and deal with the resulting consequences.

3. Workplace practices  An employer’s strategy can be discerned by the way it chooses to operate. In other words, how its IR culture is manifested by its management practices.

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I. Four Employer Strategies Regarding Unions Slides 5.6 and 5.7

1. Union acceptance  No employer willingly accepts unionization of their workforces. However, some are resigned to the inevitability of it.  Instead of expending their resources fighting off the inevitable or ridding themselves of existing unions, such employers tend to concentrate on securing the most favourable terms possible during collective bargaining.  In private-sector companies where some unionization already existed, 71% of companies reported that trying to get the best deal during negotiations was their primary IR policy.  In some cases, companies that adopted this strategy were successful in achieving wage reductions, and increased flexibility and productivity.

 

2. Union resistance  This strategy applies in circumstances when the employer’s workforce is partially unionized and management wants to stem the spread of unionization.

Equivalent and sometimes superior wages and benefits are extended to the non-unionized employees as an incentive for them to remain non-unionized.

Between 60% and 80% of employers surveyed engaged in some form of union resistance and 20% admitted to using illegal tactics to defeat an organizing campaign.

3. Union removal  This is the most antagonistic of the four general IR strategies. Its goal is the removal or elimination of a union’s presence in the company.  Typically this involves resisting any changes in the collective agreement that would improve conditions for unionized workers.  The most common tactic of this strategy is to deliberately drag out negotiations with the union.  In extreme cases employers may close facilities and relocate them to “greenfield” sites, or offshore. Other tactics include extending labour stoppages, creating circumstances for increased grievances, or engaging in unfair labour practices.

4. Union substitution/avoidance  This strategy is used by employers that have a non-unionized workforce and want to prevent a union from gaining a foothold.  A common method of implementing this strategy in the oil and gas industry is by initiating “joint industrial councils” (JICs) or other formal non-union representation systems.  The strategy is typically achieved by adopting enlightened HRM practices in order to win the hearts and minds of employees who, it is hoped, will come to view unions as unnecessary.

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II. Relative Compensation Slide 5.8

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Unionized workers earn 10–25% more than nonunionized workers in similar jobs and industry.  Traditionally, employers’ bargaining objectives have not included wage reductions below that of their domestic competitors.  Ninety-five percent (95%) of IR managers consider wages as the most important bargaining issue.  Unionized wage rates are strongly influenced by industry standards.

Non-unionized employers that adopt low wage policies may experience recruitment and retention problems, and employee dissatisfaction. On the other hand, adopting a higher-thanaverage wage policy has the opposite effect.

III. Workplace Practices Slide 5.9

Definitions of “workplace” change  Reorganization, re-engineering, and restructuring initiatives have been implemented by corporations since the mid-1970s and have resulted in a fundamental shift in the employment relationship.  The primary goals of these initiatives are to increase flexibility, productivity, and profitability.



Improving communications  This initiative was cited as the most common method to improve labour relations and productivity.

Most often this involved sharing information with respect to operations and the financial status of the firm during regularly scheduled meetings with union officials.

Individual responsibility for productivity and quality  The second most common initiative was encouraging employees to accept personal responsibility for improvements in productivity and quality through the implementation of various quality-focused programs.  Total quality management programs emphasize teamwork, consultation, and more frequent communication between workers and their managers.

Increased employee involvement  Programs designed to solicit more employee suggestions about productivity, quality, and work schedule issues exist in about 20% of unionized Canadian workplaces.  Unions are wary of such initiatives and view them as management tactics meant to weaken the union’s influence in the workplace.

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Management (employer) Processes Responsibility for Employer’s IR strategy  The responsibility for successfully carrying out an employer’s IR strategy begins at the frontline manager level and is shared with the IR staff and/or the HR staff.  The three major managerial functions in a unionized workplace are preparation for collective bargaining, bargaining, and contract administration.  Ideally, the preparation for collective bargaining is done on an ongoing basis and the bargaining process assists the company in achieving its strategic goals.  Contract administration involves making sure all terms and conditions in the collective agreement are adhered to by the parties.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. What is the most common response of employers when they are faced with a union organizing campaign? Resistance (p. 114) 2. Provide examples, from your text, of ways the labour movement has improved the employment relationship. (p. 109) 3. What percentage of employers with unionized workers consider industrial relations to be an important or dominant factor when making decisions about investments and choice of locations? About 50% ( p. 109) 4. List and describe the determinants that affect an employer’s choice of industrial relations strategy. (pp. 111–112) 5. According to your text, what are the three common elements of an industrial relations strategy? 1) The company’s attitude toward unions, 2) relative compensation, 3) workplace practices. (pp. 112–113) 6. What are the four general strategies employers adopt for dealing with unions? 1) union acceptance, 2) union resistance, 3) union removal, 4) union substitution/avoidance. (p. 113) 7. At first blush, joint industrial councils (JICs) and employee management advisory committees (EMACs) seem to be innovative ways for employers in the oil and gas industry to improve communication and participation in their workplaces. However, such schemes are also integral components of an overall union substitution/avoidance strategy. Explain how JICs and EMACs are used to prevent unionization in the petroleum industry. (p. 117) 8. Explain, in detail, the following strategies and provide examples for each. (pp. 114–117) a) union acceptance b) union resistance c) union removal d) union substitution/avoidance 9. According to a survey in the 1990s, what was ranked as the most important bargaining issue

by Canadian industrial relations managers? Wage levels (p. 118) 10. What are some of the disadvantages of pursuing a low wage strategy for employers? Higher turnover, employee dissatisfaction, difficulties in recruitment, and retention. (p. 125) 11. When managers were asked what they had done to improve labour relations and productivity, which initiative was cited most often? Improved communication (p. 120)

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Beyond-the-text questions 12. Undergraduate business/management programs offering diplomas and bachelor’s degrees are quite popular in Canada. Perhaps your university or college offers such programs. Does your university or college require that business/management students take a labour relations course to graduate?

13. Provide examples of initiatives voluntarily undertaken by employers to improve the employment relationship.

Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

14. The authors rightfully point out that most management courses and texts treat the employment relationship as if it were non-unionized despite the fact that unionized workers represent a significant percentage of the labour force. In your opinion, what would account for this glaring oversight?

15. If labour unions are credited with initiating so many improvements in the employment relationship and are the main reason why unionized workers earn 10–25% more in wages than non-unionized workers, why aren’t all workers rushing to join unions in record numbers?

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Chapter 6

Managing the High-Involvement Workplace Chapter Overview This chapter deals with management-initiated actions in the workplace which relate to the adoption and implementation of various high-involvement practices. The example in the opening vignette gives an idealized, yet factual, account of the benefits that a well-planned and well-executed highinvolvement program can provide. However, as is apparent throughout the chapter, to get from “here to there” demands careful attention to details and serious consideration about the nature of the employment relationship itself. Making high-involvement initiatives successful is not a haphazard affair. It requires nothing less than a fundamental transformation in the way managers and workers relate to each other, and how they organize various work processes.

The chapter begins with a brief discussion of the two universal management objectives: 1) efficiency and productivity and 2) control. Then, an overview of Taylorism and the Human Relations school of management is provided to set the context for the present state of our contemporary workplace.

The second part of the chapter is dedicated to establishing what a high-involvement paradigm is. The model of the high-involvement workplace is explained, in detail, as are the factors that induce firms to adopt EI. To further refine our understanding of what constitutes EI plans, a five-dimension classification system is provided, along with some common examples.

The last part of the chapter deals with the effects of EI on training, first-line supervisors, information flow, productivity, and worker satisfaction. Factors affecting the implementation of EI programs in unionized environments are also discussed. Next, various pitfalls that typically derail EI initiatives are identified and suggestions are given to sustain EI programs. The chapter closes with some legal considerations and general guidelines are provided to help us determine at which point EI plans may be deemed illegal in a unionized workplace.

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Lecture Outline and PowerPoint Slides The Actors in the Model of IR System Slide 6.1

Chapter 6: Managing High-Involvement Workplaces  Chapter 6 is the final chapter in part one of the text dealing with the actors in the simplified model of the IR system.  As in the previous chapter, the focus is on employers and the various ways they initiate and manage highinvolvement workplaces, in unionized and non-unionized environments.

Management Objectives in the Workplace Slide 6.2

Productivity  Productivity is an objective that contributes to profitability in the private sector. However, productivity alone is not enough. In both the private and public sectors, productivity must be achieved efficiently and whatever the product or service it must meet a quality standard that is acceptable for the market.

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Control  A second management objective is maintaining control of the factors that contribute to productivity. These factors include: 1) the way jobs are organized and defined, 2) work processes, and 3) investment decisions.

Because control is an essential element for achieving productivity, efficiency, and quality, which ultimately lead to profitability, it is an important managerial objective.

Given its importance, employers are typically reluctant to share or cede any control to unions.

Overview of Workplace Management Systems Slide 6.3

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The Efficiency and Productivity Imperative: Taylorism  Taylorism is an early 20th century management system that emphasized efficiency of production methods by simplifying every aspect of the work process into the smallest parts and finding “one best way” to complete it.  This system also required separating the thinking (mental) from the doing (physical) part of the work processes.

Managers would do all the “thinking” and workers would be responsible for the “doing” aspect of the work process.

Because of its success at improving the efficiency in standardized mass production situations, Taylorism was instrumental in shaping production systems in manufacturing and influencing management ideology to this day. .

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  

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Unfortunately, the emphasis on improvements in work processes, based on a machine metaphor (technical), without consideration for the social context of work, created workplaces better suited to machines than people.

The repetitiveness and mind-numbing nature of the work organized along Taylorist principles where employee involvement and empowerment were discouraged resulted in worker alienation and discontent.

A management technique based heavily on Taylorism known as lean production, which made a significant impact in the 1980s and 1990s, has met with strong union opposition. Unions claim lean production methods have a negative effect on workers as it dehumanizes the workplace, lowers wages, and increases the pace of work.

To this day, many collective agreements, with their rigidities in definitions, roles, and practices, reflect Tayloristic pressures under girding union–management relations.

The Human Imperative: The Human Relations School  As early as the 1920s, at the zenith of Taylorism’s popularity, shortcomings of this system came to light.  In 1924, Elton Mayo’s research at General Electric’s Hawthorne plant showed that when workers’ social needs were met, productivity increased beyond what Taylorism could achieve.  The focus of the Human Relations School on the social context of the workplace helped reverse the technical bias found in Taylorism.  Although the Human Relations School encouraged management to focus on the social aspect of work, it did little to increase employee involvement in decision making.

Post World War II  Since World War II, development for improved management systems continues to search for an ideal system that balances high efficiency and productivity along Taylorist lines while providing a humane working environment along human relations school lines.  Recent innovations to increase employee involvement and empowerment have included the socio-technical systems approach, quality of work–life (QWL), quality circles (QC), total quality management (TQM), and re-engineering.

The High-Involvement Paradigm Slide 6.4

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As with many management initiatives there is much confusion about what defines a high-involvement workplace. In general, there are four common elements that together constitute a bundle of practices which typify a genuine high-involvement workplace, and these are: training, flexible work organization, employee involvement, and sharing.

Training  High-involvement firms typically spend more money on training their employees. They also tend to view employees as assets, rather than expenses, in the production process.

Management in these firms likely expect more participation from the employees they have paid to train.

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Sharing  Policies and practices are designed to promote more sharing than normally found in typical firms. Policies and practices may take the form of monetary and/or non-monetary rewards, such as profit-sharing and gain-sharing plans or the removal of hierarchically based status symbols.  These sharing policies and practices seem to point to at least some acknowledgement that employees who reap the fruits of their labour will likely be more motivated at work than those who do not.

Flexible Forms of Work Organization  The greater investment in employee skill development found in high-involvement firms tends to move management away from Tayloristic work practices and toward more flexible work arrangements for employees.  Jobs are redesigned with more flexibility in mind to capitalize on trained, multi-skilled employees who use their judgment to make decisions, often in team-based settings.

Employee Involvement  There are expectations from employees and management alike that implementation of the former three practices (training, sharing, and flexible work organization) will result in more input and involvement in the work that employees do.  To some degree, management’s expectations are driven by the belief that as employees become more involved, more and better work will result, thereby increasing productivity and efficiency.

Theoretical Foundations for Employee Involvement (EI) Slide 6.5

A worker’s effort is largely discretionary  Any effort exerted beyond a minimally acceptable threshold to keep one’s job depends upon the worker’s perception of his/her wage–effort bargain.  This discretionary effort also represents untapped additional resources for employers.

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Employers are trying to redefine the wage–effort bargain  A major challenge for management is how to motivate workers to perform at their maximum level, while maintaining or enhancing the firm’s profitability.

One way management attempts to extract the discretionary effort from workers is by trying to convince them that shifting the wage–effort equilibrium points benefits both management and workers.

Policies and initiatives are implemented to give workers the feeling they are valued and their contributions are important. This is based on the premise that when workers feel more engaged and empowered they are more likely to provide discretionary effort.

Introduction of employee involvement  Two distinct underlying philosophies about the nature of the employment relationship are responsible for the introduction of EI initiatives.  The first philosophy is based on the European notion of workplace democracy and is often legally mandated. .

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

The second and more common philosophy is based on economic principles. It is believed that increased employee involvement results in improved quality and productivity, which ultimately increase profits.

No single theory or model explains…  To date there is no single theory to explain why employee involvement would produce desired results, or even how.  Several theories of motivation have been combined by researchers to develop models that predict outcomes. These intuitive models suggest that increased employee involvement should lead to increased productivity and job satisfaction. The evidence, however, is unclear.

Why Do Firms Adopt EI? Slide 6.6

Threat to Firm Survival  This trigger for EI adoption is initiated by such things as the economy, competitive forces, severe profit loss, and even deregulation in some cases, which jeopardize the survival of the firm. These situations induce managers to adopt greater EI in the hope it will ensure the firm’s survival.

Crisis in Labour–Management Relationship  In the aftermath of a crisis in the labour–management relationship, the two actors come to the realization they have figuratively hit rock-bottom and that initiating greater EI is one of the ways to improve the relationship.

Workplace Problems  In some cases, a crisis related to a specific workplace issue provides the impetus for management to adopt greater EI. For example, managers become aware the firm is faced with a recruitment or retention crisis due to extremely low employee morale.

Emulation  Some firms choose to adopt EI simply based on the desire to model themselves after leadingedge competitors. This has been found to be a common pattern in the Canadian oil industry.

Proactive Adoption  A small group of firms adopt EI because they believe it is a better method of managing workers and can be a competitive advantage. This kind of proactive adoption is typically found in firms that foster a culture of innovation.

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New Work Practices and Employee Involvement Slide 6.7

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As with any management endeavour there exists extensive diversity of practice. This is evident in the implementation of employee involvement plans.

EI practices among firms can be classified along the following five dimensions: Forms, functions, topics, characteristics of involvement, and degree of power sharing.

Forms EI initiatives differ in terms of their forms and structures. Exhibit 6.2 on page 141 provides a partial collection of examples. These EI initiatives vary in terms of their formality, complexity, and permanence.

Unions are a form of employee involvement, though not typically one encouraged or initiated by management.

Complex forms such as autonomous work groups require a strong commitment from management since these tend to challenge the traditional view of hierarchical power in firms.

These also require extensive financial and time investments.

Function  Depending on their forms, EI programs may serve different functions and stakeholders.  EI programs that are initiated or adopted by management are primarily meant to achieve management objectives. Due to improved working conditions, employees may also benefit.  The most common reason cited by firms for increasing EI is to improve communication between management and workers so processes can improve.  In other cases, the adoption of EI practices is a proactive tactic within a larger strategy of union avoidance.

Topics  EI programs vary in terms of the scope of the issues over which decision making is exercised.

For example, participation may be limited to a single issue, a group of issues, or be openended as collective bargaining over all the terms and conditions of employment.

Characteristics of Involvement  Another dimension along which EI programs may be classified is by the type and level of involvement workers have.  The involvement may take place at the individual or group level. Moreover, worker participation may be direct or indirect.  Unions represent indirect systems of participation because they intercede on behalf of their members when dealing with management.

Degree of Power Sharing  The fifth and final dimension used to classify EI programs is the extent of power sharing between management and workers.  This can range the gamut from consultation with no decision-making authority to more or less equal say for all parties.  In non-union workplaces, EI programs adopted by management stress harmony between workers and managers. In such settings, workers rely on persuasion rather than confrontation to achieve their goals and arrive at a consensus. .

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The Diffusion of EI and Other High-Involvement Practices Slide 6.8

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Generally speaking, larger employers are more likely to adopt EI practices.  The most popular EI practice is Information Sharing with Employees.  Just over 30% of firms reported using Employee Suggestion Programs or Flexible Job Design.  Nearly a quarter of surveyed firms used Problem Solving Teams or Joint Labour–Management Committees.  Self-directed work teams were the least popular.

Fewer than 5% of employers adopt a combination of practices that would classify them as high-involvement firms.

Only 2.1% of employers use flexible job design, profit or gain sharing, teams, and teamworkrelated training.

While one or two elements within the bundle of practices known as high-involvement are sometimes adopted, rarely is it done in a comprehensive way. Three reasons may account for this: 1) it may be easier to implement EI in new sites than retrofit these practices, 2) there may be reluctance to adopt EI fully because management fears loss of control, and 3) workers and unions may resist initiatives that demand more from them without corresponding rewards for their efforts.

Effects of EI and High-Performance Practices Slide 6.9

Training  Successful companies invest 5–7 days of training per year per employee. Such companies also use training to serve the following purposes: 1) socialize employees, 2) teach new skills, and 3) upgrade existing skills and renew employee interest.

First-Line Supervision  The initial effect of increased employee involvement may well be resistance from this level of management. Those who are familiar with the “command and control” type of management must adapt to the new role of supervisor as coach or facilitator. Many firms that adopt high-involvement practices use fewer direct supervisors.

Information Flow  Firms that adopt increased EI typically experience an increased demand for information at all levels of the organizations which tends to challenge previously established information flow protocols. The speed at which information is disseminated and shared also tends to increase.

Productivity  The majority of studies indicate a positive relationship between increased EI and productivity.

However, we do not know the magnitude of this effect. Meta-analysis of previous research studies indicate that it is not always possible to show a direct, significant, and positive impact of EI on productivity. .

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Job Satisfaction  The positive effects of EI on job satisfaction have been reported in case studies written by participants and via anecdotal evidence. In certain situations, negative effects of EI on job satisfaction have been reported.  Many organizations adopt EI in the hope that it will yield positive outcomes.

EI in Unionized Environments Slide 6.10

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EI is an ideologically-loaded, management-sponsored workplace intervention and its implementation in a unionized environment is problematic. On the other hand, unions play an important “watchdog” role by ensuring the employees’ interests are being met as EI programs are implemented.

Two Impediments to EI Adoption and Implementation 1. The history of the firm’s labour–management relationship is an important predictor of the potential success of any EI initiatives. Where the union and management have not invested in relationship building, EI programs generally do not yield the desired outcomes.

2. The unequal knowledge about EI between union and management is another impediment. This knowledge gap can create misunderstanding and mistrust among members of the less-informed group.

Extent and Scope of Involvement  Union involvement may be thought of as existing on a continuum, from none, as in the case of unilateral management decision making, to the highest form of involvement, known as jointgovernance. Between these two extreme points we find managerial information sharing, consultation, and decision making by consensus.  The scope refers to the stage of EI at which unions are involved. This may occur at the idea, design or implementation stage. However, all too often unions are asked for their involvement at the last stage (implementation), which creates a negative impression that leads to resistance.

Union Concerns about EI  The concerns unions have about EI initiatives are both ideological and practical in nature.  From a practical standpoint they oppose any management-initiated program that might weaken the collective bargaining process, or provisions contained in the collective agreement.  On a different level, unions fear that EI programs may dilute solidarity within the membership by socializing employees to accept corporatism at the expense of unionism.  Evidence from several studies suggests that unions that withhold their participation in the implementation of EI programs run the risk of creating the very outcome they wish to avoid. In other words, lack of participation leads to a self-fulfilling prophecy.  Astute union leaders have been successful in winning concessions from management in exchange for facilitating certain aspects of EI. Consequences of Non-Involvement of Unions  As a rule it is recommended that union involvement be sought at the earliest stage of EI to maximize the chances of success. .

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 

Non-involvement by a union is likely to raise suspicion among workers, who view the union as agents working for their welfare.

A union’s active opposition campaign can derail even the best EI implementation plans and reduce employee morale.

Canadian Unions and Direct Participation  When EI initiatives were first adopted by Canadian firms, unions were resistant, cautious, and somewhat suspicious. However, in the early ’90s, some unions started endorsing the idea of proactive and direct worker participation in EI programs.  Exhibit 6.3 on page 151 provides an example of the Communications, Energy and Paperworkers’ policy regarding EI programs.

The Sustainability of EI Programs Slide 6.11

Case-study literature suggests the following are essential elements to ensure the sustainability of EI programs in firms: Communication  EI programs increase the demand for better and faster communication. Therefore, attention to how freely information is accessed or distributed is required. Any changes which affect workers need to be communicated in advance.

Union co-operation  As discussed in the previous section dealing with the consequences of non-union involvement, the benefits of union cooperation cannot be overstated. In short, it is indispensable for the continued success of any EI initiative.

Management style  EI programs challenge traditional hierarchical management beliefs and practices. The conventional “command and control” structures that support autocratic styles are incompatible with the principles of EI. Job security and timing  One of the fundamental and almost universal concerns of workers is the issue of job security.

The changes required, if not demanded, for the successful implementation of EI are unlikely to occur in a climate where front-line managers and workers fear job loss. That is why the introduction of EI initiatives during periods of downsizing is ill advised.

Compensation  To ensure successful implementation and the sustainability of EI, management needs to be aware of the importance of workers’ psychological employment contract. In other words, with the additional demands placed upon the workforce as a result of EI comes the added expectation of improved extrinsic rewards. A failure on the part of management to address this basic human reality may lead workers to question the benefit of volunteering their discretionary efforts.

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Legalities of Employee Involvement Slide 6.12

Non-union sector  There is no explicit Canadian public policy prohibiting non-union employee representation and participation systems. All forms of employee representation and EI programs are lawful, as long as they do not thwart unionization.  There are no rules governing the extent of management control over non-union forms of employee representation or EI programs.

Unionized sector  Many EI programs can and do coexist in unionized environments. However, such arrangements are limited by the collective labour laws where the firm operates.  It is illegal for employers to implement any initiatives which curtail or usurp in any way the union’s statutory right to serve as exclusive bargaining agent on behalf of members.

Employers are prohibited from engaging in any actions that interfere or violate unionized worker’s rights.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. What are the two universal managerial objectives in the workplace? Maximizing efficiency and productivity, and exercising and maintaining control. (p.128) 2. Explain how Frederick Winslow Taylor systematized both the production process and the approach to managing workers. (p. 130) 3. Discuss some of the disadvantages associated with Taylorism. (p. 130) 4. How did the human relations school of management help offset some of the negative aspects of Taylorism in the workplace? (p. 132) 5. List and describe the four sets of practices commonly found in high-involvement workplaces. 1) training, 2) flexible work organization, 3) employee involvement, 4) sharing. (p. 133) 6. Which single theory discussed in the text explains why implementing employee involvement practices would produce positive results? None. (p. 136) 7. The authors identify five triggers that induce firms to adopt EI initiatives. Please identify each one. (pp. 138–139) 8. Can unions be considered a form of EI? Justify your answer. Yes. They may not be the first choice employers think of, but certainly unions engage and encourage employees’ involvement in workplace issues and decision making. (p. 140) 9. There exists a considerable diversity of EI initiatives among firms. Describe the five dimensions that can be used to classify those initiatives. 1) form, 2) functions, 3) topics, 4) characteristics of involvement, 5) degree of power. (pp. 139–143) 10. What three reasons do the authors give to explain why so few employers practice EI in a comprehensive way? (p. 145) 11. Discuss why front-line managers might resist the adoption or implementation of EI practices. (p. 146) 12. Discuss why union leaders resist and in some cases may oppose the introduction of EI initiatives. (pp.149–152) 13. The extent of union involvement in EI programs can range from none to extensive.

Describe the five levels of involvement. (pp. 150–151) 14. What are the essential elements that promote the sustainability of EI programs? (pp. 155– 159)

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15. What labour law limits the unilateral implementation of EI programs by management in the non-union sector? None. (p. 160) 16. What is the test(s) for determining whether an EI program constitutes an unfair labour practice in a unionized environment? In other words, at which point would an EI program and the way it is implemented typically be ruled illegal by a labour board? (p. 161)

Beyond-the-text questions 17. What is the official Canadian Autoworkers (CAW) policy position regarding direct employee participation in EI programs? (HINT: See http://caw.ca/en/about-the-cawpolicies-and-papers-work-reorganization-responding-to-lean-production.htm)

Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

18. The authors state that “to a large extent a worker’s effort remains discretionary.” One of the ways employers can encourage workers to provide the firm with this additional effort is using EI programs. Discuss the concept of discretionary effort. How or why would employees choose to ration out their efforts?

19. Employee involvement initiatives by management are ideologically-loaded interventions in the employment relationship which are meant to serve the primary interests of the firm.

Why, then, would union leaders, or for that matter individual employees, be expected to support such programs?

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Chapter 7

Social, Political, and Economic Environments Chapter Overview In this chapter, we move from the first part of the text to the second and deal with the industrial relations environment. This transition also coincides with a change in focus from the actors in the industrial relations model (chapters 1–6) to the external inputs. Chapter seven is the first of three chapters dedicated to external inputs.

The chapter begins with a description of what constitutes social environment and highlights some of the differences and similarities between Canadian and American citizens. In the second part, the political environment is defined within the context of three distinct historical periods. The changes in labour legislation that occurred in each of the three time periods are highlighted, as are their impact on the labour relations system.

In the third part of the chapter, the economic environment is defined and explored, starting with the ideology of a competitive labour market. Then, the demand for labour and the supply of labour, in the context of the workplace, is thoroughly analyzed. What follows is an insightful look at the interaction of these two market forces (supply and demand for labour).

The economic environment portion of the chapter concludes with an in-depth look at the factors in the macroeconomic environment that influence the actors in the industrial relations system. For example, the effects of such forces as unemployment, inflation, and average wage settlements are explained in relation to the collective bargaining process. What is made clear is that economic forces simultaneously drive and restrict the demands of both management and unions at the bargaining table.

The chapter ends with an examination of recent worldwide developments, such as free trade, globalization, and even the Kyoto Protocol, and the impact of each on the Canadian economy.

Particular attention is devoted to clarifying the controversies surrounding these developments and distinguishing between what the critics or advocates claim and what is supported by empirical evidence.

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Lecture Outline and PowerPoint Slides The External Inputs/Environment Slide 7.1

Chapter 7: Social, Political, Economic Environments  We now move to the second part of the model—external inputs.  Chapter seven is the first of three chapters in the second part of the text that deal with the environment, or “external inputs,” as they are referred to in the IR Model.  The focus of this chapter is the impact that social, political, and economic environments have on the industrial relations system.

The Social Environment Slide 7.2

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The social environment can be thought of as an amalgam of values and attitudes of a population toward various institutions in society.

In this section, the attitudes and values of Canadians and Americans toward government, work, and other workrelated values are compared.

Canada–US Socio Comparisons Slide 7.3

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Attitudes Toward Government  There are major differences between the population of both countries with respect to their acceptance of government intervention in the economy and society in general.  More Canadians (45%) than Americans (31%) feel it is the government’s responsibility to reduce the income gap between the rich and poor.  More Canadians (83%) than Americans (72%) agree that it is the responsibility of government to ensure the well-being of its citizens.

Canadians are also more supportive (73%) of the government taking responsibility to preserve society’s morality than Americans (53%).

Attitudes Toward Work  Most Canadian and American workers are satisfied with their jobs and take pride in their work.

Furthermore, they also agree they would do their best regardless of what they are paid, and consider themselves fairly paid.  In both countries, workers report nearly identical attitudes toward various aspects of work. .

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Attitudes Toward Work-Related Values  Canadians and Americans differ significantly when asked how they should be treated at work.

Canadians are more supportive of equality and equity (fairness) in the workplace than Americans are.  Americans place a higher value on freedom and efficiency than Canadians do.

The Political Environment Slide 7.4

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The political environment determines the form that the legislative environment takes, which affects the actors in the industrial relations system, who in turn attempt to influence the political and legislative environments.  Canadian citizens have a higher tolerance for government intervention as compared to Americans. In comparison to the American system, the Canadian parliamentary system makes it somewhat easier to pass pro- or anti-union legislation.

Consequently, the history of Canada is filled with government interventions in the industrial relations system. To this day, provincial and federal governments continue to make adjustments to labour laws.

The Historical Context: 1900–1949  The political environment prior to the 1940s was not favourable for organized labour. Even with the introduction of the Industrial Disputes Investigation Act (1907), employees who dared attempt to form unions had no legal protection.  In 1944, the geo-political climate was such that it facilitated the passage of fairer union legislation in the form of The National War Labour Order (PC 1003). PC 1003 offered some protection for workers and unions, and established clear rules to limit abuses.  In the same year, the CCF government in Saskatchewan passed labour-friendly legislation.

This prompted the federal Liberals to follow suit by introducing unemployment insurance and “baby bonuses,” presumably to win over the left-of-centre vote.

The Post-War Years: 1950–1979  In 1960, the provincial Liberal government in Quebec introduced legislation permitting publicsector workers the right to bargain collectively and to strike.  In 1967, the federal Liberal government passed the Public Service Staff Relations Act (PSSRA), giving federally regulated public-sector workers the right to bargain collectively, and strike in certain circumstances.  Most of the other provinces passed similar labour laws within the next five years.  The wage and price controls, put into force between 1975–1978, was the most striking example of government intervention in the collective bargaining process in the post-war era (1950–1979).

The Quarter Century: 1980–Present  Depending in which province one resided, or whether one was employed in the federally regulated sector, or which political party held the balance of power, the last two and a half decades were marked by both pro- and anti-union legislation.

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

These swings back and forth affected the relative bargaining strengths of management and labour unions, reminding us that collective bargaining operates within, and is in turn affected by, the socio-political and economic environments.

The Economic Environment Slide 7.5

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The economic environment represents yet another constraint within which actors must operate in order to achieve their objectives. Recall that the others were the social and political environments.  Within the economic environment lies the labour market governed by supply and demand, as well as government legislation and societal values.  Having an appreciation of how these forces interact is essential to understanding how the industrial relations system works.

The discussion of the economic environment is divided into five main sections: (see Slide 7.5 for list).

I. The Ideology of a Competitive Labour Market Slide 7.6

    

How Competitive Markets Are Supposed to Work  The ideology of a competitive labour market rests upon a foundation of assumptions that helps construct an ideal model of how such a market should or would work.  In such a reality, no group of employers or employees exerts a significant impact on the labour market.

Employers are assumed to be wage-takers, because they do not set wages—the market does.  Although the supply of labour is dependent on many factors, it is assumed, everything else being equal, that an increase in wages in an occupation increases the labour supply to that occupation.

The demand for labour is dependent on many factors, so that everything else being equal, wage increases result in reduced demand for workers or worker hours.

The reduction in demand for labour as wages increase is explained by the substitution effect and the output effect.

The substitution effect predicts that as wages increase employers will replace (substitute) labour with less expensive alternatives.

The output effect predicts that as wages increase the price of the goods produced also increase.

This leads to reduced sales, then reduced units produced, and finally to reduced labour needed.

In the idealized labour market, the ideal wage (equilibrium wage) exists at the point where demand for labour equals the supply of labour. Moreover, barring any interference or interventions, in a perfectly competitive labour market, wages tend toward the equilibrium wage rate.

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How Wages Allocate Labour: Compensating Wage Differentials  At the occupational level of analysis, in a perfectly competitive labour market, high wages attract more workers. Furthermore, some occupations offer more desirable working conditions than do others.  For jobs that offer less desirable working conditions, require long periods of training, or irregular hours, some offsetting benefit must be offered to attract workers.  Compensating wage differentials are the premiums (in wages) that are just enough to offset the undesirable aspects of a job in order to attract or retain enough employees (supply side).  For employers (demand side), compensating wage differentials provides financial justification to try to eliminate such undesirable working conditions, provided it is cost effective to do so.

What Happens When Competition Is Not Perfect  Competition may not follow the textbook model for a number of reasons.  While economic and other forces affect wage rates, they may not adjust fast enough to achieve a state of equilibrium (economic nirvana).  Even in the absence of interventions, the labour market is often plagued by periods of excess supply (high unemployment) and excess demand (labour shortages).  In reality, employers may be wage-setters and not wage-takers, as the ideal suggests.  Wage-setters exercise a certain degree of economic power referred to as monopsony power.

An extreme example would be one employer (hospital) of a particular kind of labour (registered nurses) in the market (town).

II. The Demand for Labour Slide 7.7

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Elasticity of Demand: How Much Does Employment Fall When the Wage Rate Increases?  The competitive labour market model predicts that as labour costs increase, demand for labour decreases accordingly.  Often the question arises: To what extent would an increase in labour cost affect the level of employment? In some cases it is a lot and in others not at all.  Elasticity of demand for labour is a concept that measures the effect on employment resulting from increased labour costs. It is defined as the percentage reduction in employment due to a 1% increase in labour costs.

Empirical evidence suggests that on average over a one-year period there is a 3% reduction in employment for every 10% increase in labour costs.

Evidence further suggests the cause of the drop in employment is due, in equal measure, to the substitution and output effects.

The Impact on Employment of Raising the Minimum Wage  The issue of whether raising, lowering, or abolishing the minimum wage is the right choice remains highly controversial.  On the one hand, some academics argue there is no evidence to suggest increasing minimum wage has a negative impact on employment.  On the other hand, others argue that increasing the minimum wage causes employers to reduce their workforce, which negatively affect employees who are at the bottom of the wage scale (typically youth). In other words, raising minimum wage hurts precisely those people such well-meaning intervention is intended to help. .

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Deindustrialization  Deindustrialization is a term used to describe the shift away from employment in manufacturing and production of goods toward employment in the service sector.  This shift is of particular concern to unions and their members who are losing high-paying manufacturing jobs.  Three fundamental economic forces help explain the reduction in the percentage of manufacturing jobs relative to total employment: 1) consumers have a preference for services over goods, 2) manufacturing jobs are more easily replaced (substituted) than service-type jobs, and 3) manufacturing has shifted to Third World countries where labour costs are cheaper.  Foreign competition and the lure of favourable Third World business climates affect manufacturing more than the service sector.  It is expected the long-term implications of deindustrialization will likely produce mixed results for all actors in the industrial relations system.

III. Supply of Labour Slide 7.8

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Labour Force Participation and Hours of Work  The income–leisure choice model helps explain how an increase in wages affects a worker’s choice to either work more or pursue leisure activities with the additional earnings.  The substitution effects predict that when an employee receives higher wages, he/she will prefer to work more hours (income). On the other hand, the income effect predicts that with higher wages the employee with more disposable income will want to spend and enjoy it (leisure).

Empirical studies indicate the magnitude of the two offsetting effects is roughly equal.

The income–leisure choice model indicates that various income maintenance programs (e.g., welfare, unemployment insurance) provide disincentives to work, due to both the income effect (they can afford not to work) and the substitution effect (the latter reflecting the fact that the payments are clawed back or reduced if one works).

The Aging of the Population  The largest cohort of Canadians, known as the baby-boomers (born between 1947 and 1966), is from 38 to 57 years of age (as at 2004). This will have a fundamental impact upon the social, political and economic environments, and hence our industrial relations system.  An aging, or middle-aging, of the workforce presents special challenges for employers, unions, new entrants into the labour force, and the government.  Middle-aged workers tend to be more attached to their employers (or jobs), which reduces voluntary turnover. As they remain on the job, the option of unionization (voice) may be more attractive to them than quitting (exit).  Unions will bargain for benefits that appeal to their aging members, such as increased pensions, sick leaves, attendant care, drug benefits, etc.  Along with the aging workforce, issues related to age discrimination are also expected to become problematic (e.g., mandatory retirement).

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Importance of Women and Ethnic Diversity in the Labour Force  Men constituted 66% of the labour force in 1970. By 2002, 54% were male and 46% were female.  According to the 2001 census, 43% of Toronto’s and 49% of Vancouver’s population were visible minorities. In Canada, the percentage was 13.4%.  These demographic changes have given rise to concerns about differences in earnings between women and men, and between immigrants and native-born Canadians.  The overall gender pay gap has narrowed, with the ratio of female to male annual earnings increasing from about 60% in the mid-’70s to just over 72% in 2000.  Evidence suggests that pay equity legislation has been successful in reducing gender pay gap by one-third in large public-sector organizations.

Importance of Part-time and Contingent Work  Part-time employment (30 hours/week or less), as a percentage of the labour force, grew from 4% in the mid 1950s to 19% in 2002.  Two-thirds of all part-time workers in the labour force are females.  The federal Commission of Inquiry into Part-Time Work found evidence to show part-time workers are generally as productive as, or more so, than full-time workers.  Unions oppose the use of part-time workers and argue they pose a threat to the employment security of and compensation to full-time workers.  There has also been an increase in contingent workers in the labour force. These are casual, term, contract, temporary, or seasonal workers. A 1995 Statistics Canada survey found that part-timer and contingent workers comprise one-third of the labour force.  Labour leaders often argue that part-time and contingent workers provide employers with flexibility, lower wage costs, and a way to avoid unionization.

The Brain Drain and Immigration  In 1998, a Statistics Canada study concluded that “there is little evidence in support of a largescale exodus of knowledge workers from Canada to the United States.” These finding were again substantiated in 1995, when another survey found a brain drain of only 1.5% among university graduates.  Nonetheless, some argue that the brain drain exists and is an important concern for particular occupations because the “best and brightest” tend to leave.  Perhaps a more important issue are the many artificial barriers that prevent highly qualified immigrants from fully participating in our Canadian workforce.

IV. Interaction of Supply and Demand of Labour Slide 7.9

Earnings Differentials and Efficiency Wages  Studies indicate there are substantial differences in earnings depending on occupation and industry, even when we control for education and experience.  High-wage industries, such as tobacco and petroleum manufacturing, pay 20%–30% more than the norm. In contrast, low-wage industries, such as accommodation and food service, pay 20% below the norm.  These inter-industry differentials are stable over time and across countries. .

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Increased Earnings Inequality  The inequality of annual earnings (hourly wage × hours worked × weeks worked) increased sharply during the 1990s and the first 5 years of the 21st century.  The overall Canadian tax system became more regressive as property, sales, and payroll taxes offset much of the progress gains of income tax.

The Proliferation of Computers and the Productivity Paradox  The productivity paradox refers to the unfulfilled expectations that large investments in computer and information technology would yield a high rate of growth in labour productivity.  In reality, the annual productivity growth in 1989–1996 was only 0.7%, which was the lowest of any decade since the 1960s. Moreover, sectors that invested more in information technology, on average, experienced even lower growth.  Three hypotheses have been offered: 1) the benefits are here, but we just cannot measure them yet (mis-measurement), 2) the potential is there, and the benefits are coming, but organizational structures, training, and computer designs have to improve (lag), and 3) the benefits will never come because computer technology accounts for such a small percentage of investment. Furthermore, upgrades, crashes, junk mail, viruses, etc. offset any productivity gains.

V. The Macroeconomic Environment Slide 7.10

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The macroeconomic environment affects union– management relations in many ways. For example, when the economy is expanding, there is a tendency for higher wage settlements and work stoppage activity. In periods of uncertainty and high inflation, we also witness an increase in work stoppages, as well as greater emphasis on negotiating higher wages and COLA clauses.  Broader social goals are more easily achieved during times when the economy is expanding.

On the other hand, when the economy is in recession, job security issues assume more prominence during collective bargaining.

Swings in the Unemployment Rate  In the early 1980s and 1990s Canadians experienced double-digit levels of unemployment.  Statistics Canada publishes eight types of unemployment figures. The most restrictive is R1 and the least restrictive is R8. The R8 unemployment rate includes discouraged searchers and yield the highest percentage.  In 2006, the official rate (R4) was 6.3%, while the R8 rate was 9%.  Deficient-demand unemployment refers to an overall lack of jobs in the labour market.  Structural unemployment happens when there is a mismatch between the characteristics of the unemployed person and the vacant jobs, due to geography, experience, or occupation.  Frictional unemployment is caused by turnover when suitable jobs exist, but one is temporarily unemployed until one finds a new job.  Understanding the different forms of unemployment is helpful in appreciating the motivation guiding the demands of unions and management at the negotiation table, and the likelihood of work stoppages.

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Barriers to Labour Market Flexibility  Three controversial explanations have been offered to answer why the labour market and wages respond so slowly to changes in economic conditions.  Keynes’ explanation was that workers are reluctant to accept wage cuts to keep their jobs during periods of high unemployment because the cuts might not be spread out evenly among all workers.  The efficiency–wage models suggest that, since wage reductions may reduce worker morale and lead to decreased productivity, employers are reluctant to force wage cuts, even when they have the power to do so.  The notion of an implicit contract, which is an understanding between employers and employees not to reduce wages during economic downturn, is another explanation.  It has been suggested that one way to make wages more flexible or responsive is to change compensation systems to include bonuses, gain-sharing or profit-sharing plans, etc.

The Impact of the Macroeconomic Environment on Wage Settlements  Individually negotiated wage settlements are greatly affected by the prevailing average wage settlements in the economy.  According to the Phillips Curve (Exhibit 7.4), wage settlements are high when the unemployment rate is low and wage settlements fully reflect changes in the expected inflation rate.  In Canada, wage settlements were low when unemployment was high during the recession in the early 1990s. Wage settlements rose again in the boom of the late 1990s.

Labour Market Impacts of Free Trade and Globalization  Canada’s economic health is inexorably tied to the global economy, as is evident from the following: the original 1989 Canada–US free-trade agreement (FTA); the 1994 North American Free Trade Agreement (NAFTA); and our agreed-upon tariff reductions for India, Brazil, Turkey, and Malaysia.  One concern expressed is that our high wage rates make it difficult for Canadians to compete with countries where wages are much lower. However, this fails to consider the relationship between wages and productivity. That is to say, low-wage countries are only a competitive threat if their wages are low relative to their productivity. Often their productivity is also low, although they are increasingly moving up the value-added chain to become low-wage and high-productivity economies.  In reality, Japan and Germany are tough competitors even though compensation costs in 1999 were about 33% and 75% higher, respectively, than in Canada.  The issue of the costs and benefits of trade liberalization for Canada continues to be a controversial issue. Alas, measuring the actual economic impact of the FTA and NAFTA has proven elusive.

Labour Market Pressures Emanating From Global Standard Setting  Although the impact of international pressures, also known as globalization, is hard to quantify, these can still affect Canada’s labour market.  One example is the Kyoto Protocol that set targets to reduce greenhouse gas emissions by at least 5.2% before 2012. In the case of Canada, this would represent a 26% reduction from projected 2012 levels.  Critics of the accord argue the targets are unachievable and will result in economic hardship for Canadians. Others still argue that, while some employers or industries will be detrimentally affected, the adjustment will likely create new kinds of opportunities.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. Define the term “social environment” in the context of industrial relations. It represents the combination of attitudes and values of the population toward institutions and collective goals of society. (p. 164) 2. In what way does the social environment affect the actors in the industrial relations system?

Since it represents the attitudes and values of a population, it affects the political environment in which they also live. Governments enact laws, which govern the workplace and the economy. This ultimately affects both labour and management and therefore the industrial relations system. (p. 164)

3. How do Canadians and Americans differ in their view of government? Typically, Canadians expect their government to do more for them and are more tolerant of government intervention in society and the economy than are Americans. (p. 164) 4. How dissimilar are the attitudes of Canadians and Americans regarding work? They are not dissimilar. In fact, they are remarkably similar. (p. 165) 5. What reasons do the authors give to explain why it is easier for governments in Canada to pass pro- or anti-union legislation? (p. 166) 6. Which province was the first to permit collective bargaining and the right to strike by public sector employees? Saskatchewan in 1944. (p. 167) 7. Provide one example from chapter seven of government legislation from 1900–present and explain how it might have affected the bargaining strength of either the union or management. (pp. 167–169) 8. Define the term “economic environment” and its impact on labour and management relations.

It sets limits within which labour and management can push for improvements to satisfy their interests. For management these would include increased profits or reduced labour costs. For employees this would mean increased wages and benefits. (p. 169) 9. What conditions need to exist in order for equilibrium wage to be achieved and what would be the implications of equilibrium wage? (p. 170) 10. Explain the concept of compensating wage differential. Use this concept to explain the wage disparity between different occupations. (p. 170) 11. Employers who possess economic power are said to be wage-setters, instead of wagetakers. The economic power they exercise is also known as monopsony power. Explain the conditions under which this is possible. (p. 171)

12. Define the term “elasticity of demand for labour.” (p.172)

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13. Does raising the minimum wage cause a resulting decrease in employment? (p. 173) 14. What is deindustrialization and why is it a concern for union leaders? (p. 173) 15. Explain the income–leisure choice model. (p. 175)

16. What is the Statistics Canada definition of part-time employee? Someone working less than 30 hours per week at his or her main job. (p. 179) 17. Why are union leaders opposed to employers relying on part-time workers? (pp. 179–180)

18. What is classified as contingent work? Casual, term, contract, temporary, and seasonal jobs. (p. 180) 19. Even when controlling for compensating differentials such as qualifications and working conditions, there appear to be low-wage industries and high-wage industries. According to the authors, which industries are at the high and low end of this scale? (p. 182) 20. Explain the productivity paradox. (p. 182) 21. How does Statistics Canada calculate the unemployment rate, and how many different measures are there? (p. 184) 22. What is the difference between: 1) deficient-demand unemployment, 2) frictional unemployment, and 3) structural unemployment? (p. 184) 23. Explain how a high-wage country can be a greater competitive threat to Canada than a low-wage country. (p. 187)

Beyond-the-text questions 24. In this chapter, the concept of a competitive labour market is referred to as an ideology.

Indeed, there are some who describe the entire field of economics as being ideologically based.

Why? 25. What is the minimum wage in your province? What is the minimum wage in Alberta?

26. Canada has ratified the Kyoto Protocol, but the United States has not. Why did the United States refuse to do so?

27. Would you characterize your provincial government as pro- or anti-union? Why, and what recent labour legislation changes would you use to support your assessment?

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Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

28. In the United States, mandatory retirement is banned as a form of age discrimination. In Canada, the debate continues, as only some provinces have prohibited it. Please read Exhibit 7.1 on page 177 and answer the following: a) When it ruled in an Ontario case against banning mandatory retirement, the Supreme Court of Canada made reference to “wide-ranging impacts on the industrial relations system.” If it were banned, what do you think these impacts would be? b) Are you in favour of permitting mandatory retirement? Why or why not?

29. If there is little evidence to support the notion of a large-scale “Brain Drain,” then why do you think the idea persists and continues to be debated? What advantages are there, if any, of perpetuating the “Brain Drain” concern?

30. Would it be acceptable for a government to use the income–leisure choice model to illustrate the counter-productive nature of income maintenance programs such as welfare and unemployment insurance, in order to cut such programs? If so, why; if no, why not?

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Chapter 8

Collective Bargaining Legislation in Canada Chapter Overview This chapter begins with an interesting vignette about a union-organizing drive at a group of five Starbucks coffee shops. What is made clear, after reading this account, is how sensitive the certification process is, and the extent to which labour boards will scrutinize management actions during this period, to ensure employee rights are preserved. It also illustrates how fragile the union’s certification rights can be in the service industry. This vignette sets the backdrop for the chapter.

The collective bargaining system in Canada is unique in that it is fragmented into eleven jurisdictions—10 provincial and 1 federal. This system is explained, as are some of the principles of collective bargaining in Canada. Next, the origins of our present day legislation are uncovered through discussion of the US National Labour Relations Act (or Wagner Act) and our own Privy Council Order 1003.

The chapter continues with a description of the role of labour boards and provides an overview of the typical features found in most labour relations codes, such as unfair labour practices, the duty to bargain in good faith, and the duty of fair representation. Next, the card-based and mandatory vote methods of acquiring certification are discussed. As well, the various forms of union security clauses are described.

The principles of strikes and lockouts are discussed, along with the options that are available to the parties to help settle disputes, and the rights of striking and locked-out workers. The law of picketing is also reviewed.

The chapter concludes with the impact that individual and group rights have had on the collective bargaining system. First, the implications of the Canadian Charter of Rights and Freedoms are examined using some leading cases. Second, the influence of human rights codes on collective agreement clauses with respect to the duty to accommodate is discussed. The effects of both pay and employment equity legislation are explored in the context of how each have been integrated into collective agreements. The chapter closes with a discussion of how the expansion of privacy laws has impacted labour relations and human rights.

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Lecture Outline and PowerPoint Slides The External Inputs/Environment Slides 8.1 and 8.2

Chapter 8: Collective Bargaining Legislation in Canada  Chapter eight is the second of three chapters in the environment part of the text, also referred to as the interaction of the parties in the IR Model.  The focus of this chapter is on the various pieces of legislation that affect the collective bargaining system.

These include not only labour relations codes, but also other laws that protect the rights of groups and individuals at work.

Development of Labour Relations Law in Canada Slide 8.3

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Prior to the 1900s the law favoured employers, who used existing legislation to prevent workers from unionizing.

In response to a series of strikes in what some may call “essential industries,” the federal government passed the Industrial Disputes Investigations Act (IDIA).

The IDIA mandated third-party intervention before a strike could commence.

The Wagner Act contained key provisions that legalized unions and protected certain collective bargaining activities.

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Wartime Labour Relations Regulations (PC 1003) Slide 8.4

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Canada’s first comprehensive labour legislation was the Wartime Labour Relations Regulations (PC 1003) and was modeled after the Wagner Act. PC 1003 included a number of important benefits and protections for unions, including the requirement of employers to recognize a union as the bargaining agent for its employees.

PC 1003 also restricted strikes during the term of a collective agreement to ensure that production was maintained during war time.

Federal and Provincial Responsibility for Labour Relations  In contrast to US labour laws, Canada’s collective bargaining legislation is quite fragmented.

In Canada, there are 11 jurisdictions—10 for each province and 1 for the federal sector, which includes the territories.  Toronto Electric Commission v. Snider settled the question of which level of government has responsibility for labour relations.  Each jurisdiction also has its own human rights, equity, and privacy legislation, and all Canadians are protected by the Charter.  The various labour relations codes in the 11 jurisdictions provide the rules of engagement for actors in the industrial relations system.  Administration, interpretation, and the enforcement of these rules are left to labour boards, arbitrators, and sometimes the courts or the police.

Labour Tribunals Slide 8.5

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Labour relations boards are created by the governing labour relations legislation to interpret and enforce the legislation.  Members of these boards have special expertise in labour relations. This expertise gives the board two advantages over courts: more creative solutions and more credible appearance than the courts.  Labour arbitration or “grievance” arbitration boards have a narrower focus. These boards apply and interpret collective agreements.

Interest arbitration boards set the terms for new collective agreements when the parties cannot come to an agreement on their own.

Labour relations boards have “make whole” remedial powers. This means that the board has the power to restore an injured party to the position that it would have been in had no breach of the legislation occurred.

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Unfair Labour Practices (ULPs): Protecting Representation Rights Slide 8.6

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Labour relations legislation serves to protect the right of workers to freely choose whether to be represented by a union and hence prohibits certain practices.  These rules apply to employers, unions, and employees.  The periods when employees feel most vulnerable to pressure and hence require the most protection are during union organizing, between certification and the start of bargaining, and during bargaining.  In most ULP complaints, it is the employer who has been accused of breaking the law.

Labour boards look carefully at the employer’s motive in assessing whether or not a ULP has occurred. It is recognized that employers must be careful when communicating with employees during these critical periods because of the subordinate relationship of employees.

Employer actions taken just before or during the bargaining process will be assessed in terms of whether the actions are motivated by legitimate business reasons or anti-union animus.

Requirements for Union Certification Slide 8.7

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Although there are four requirements that a union must meet in order to gain certification, two are most often contentious: whether the bargaining unit is appropriate and whether the union has sufficient support.  The appropriate bargaining unit is important because it influences the outcome of the certification process, the balance of power in negotiations, the chances of a breakdown in negotiations, and the scope of the collective agreement.  The most important consideration for labour relations boards in this regard is “community of interest.” Exhibit 8.4 on page 202 sets out the factors.

A good example for students to consider is whether or not university faculty would share a community of interest with the caretaking staff or maintenance employees.

The size of the bargaining unit is a double-edged sword. Small bargaining units may be rejected because they lack the resources and strength to bargain. On the other hand, a large bargaining unit may be rejected because the employees lack “community of interest”.

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Appropriate Bargaining Unit Slides 8.8 and 8.9

There are two basic models for certification in the 11 Canadian jurisdictions. In each model, evidence must be provided to the labour relations board that the majority of workers want to unionize.

Card Model  In the card model, the union needs to convince a minimum percentage of employees to sign union membership cards (the group is referred to as a bargaining unit).  If the union can demonstrate that a certain threshold percentage of the employees in the bargaining unit (usually 55%) have signed membership cards, then the labour board will automatically certify. If, on the other hand, a lesser percentage of employee have signed membership cards (usually 45%–55%) then the board will order a secret vote. The vote is based on a simple majority of those employees who cast ballots.

Mandatory Vote Model  In the mandatory vote model, irrespective of the percentage over and above the minimum required to show initial support (e.g., in Alberta this is 40%), a secret ballot vote is conducted by the labour relations board. Certification hinges on the outcome of the vote, which is based on a simple majority of ballots cast.  Advocates of the card model argue that it is the most likely to show the true wishes of employees because there is no competition for the “hearts and minds” of employees.

Voluntary Recognition Slide 8.10

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Voluntary Recognition is an alternative way for employees to gain collective bargaining rights. Voluntary recognition occurs when the union and the employer agree that the union will represent the employees and this representation results in a written collective agreement.

Voluntary recognition is as binding upon the parties as either the card or mandatory vote model.

Employers may prefer voluntary recognition over certification because it is less disruptive. Furthermore, the employer may prefer to recognize a union that is perceived to be easier to deal with.

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Union Security Slide 8.11

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Once the union is certified or voluntarily recognized, all individual employment relationships end. The union becomes the legal representative of all employees in the bargaining unit, even though some of the employees may have opposed the union. Some of these employees may be reluctant to pay union dues to support the union (freeriders).  Canadian labour laws seek to avoid the free-rider problem by recognizing a variety of union security clauses. Several jurisdictions require employers to deduct union dues from all employees regardless of whether or not each employee decides to join the union (the Rand Formula).

A Closed Shop requires that the employer can only hire union members. This scheme is the most restrictive and is usually only present in the construction industry.

A Union Shop requires employees to join the union and maintain membership while employed.

The Rand Formula, also known as dues check-off, requires that the employer deduct union dues from all employees. Employees are not required to join the union to be hired or stay employed.

The Voluntary Check-off method allows employees to choose to join the union and whether or not they wish to pay union dues. This is the least restrictive scheme and puts the union at potential risk of not having the financial resources to maintain representation rights.

Content of the Collective Agreement Slide 8.12

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Labour law in each jurisdiction requires that every collective agreement contain specified provisions. These typically include: 1) grievance arbitration to settle disputes, 2) a minimum term of one year, 3) prohibition of either strikes or lockouts during the term, 4) compulsory dues check-off, and 5) prohibition against discrimination contrary to human rights legislation and the Charter.  Bridging provisions require that the terms of an expiring collective agreement remain in effect until negotiations end. This allows the parties to focus on negotiations without the disruption of having no agreement.

Duty to Bargain in Good Faith   

Canadian labour relations codes contain many procedural rules that govern collective bargaining, but have very few that relate to bargaining itself.

Most of the 11 jurisdictions specifically mention the requirement that each party negotiate “in good faith” and make “every reasonable effort” to reach a collective agreement.

Any conduct, by either party, which the labour board determines to be inconsistent with these two requirements will be deemed bad-faith bargaining. .

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 

Taking a tough bargaining stance to advance one’s interests or being inept at bargaining is not bad faith bargaining.

Typical examples of bad-faith bargaining would include such ploys as refusing to meet, engaging in “surface bargaining,” negotiating directly with the membership, undermining the union, firing union leaders, or unilaterally altering the terms and conditions of employment during bargaining.

Breakdown of Negotiations and Work Stoppages     

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At a minimum, most jurisdictions in Canada ensure that workers who engage in legal strike activities get their jobs back following the end of a strike.

In some jurisdictions, such as British Columbia, employers are also prohibited from hiring outside replacement workers during a legal strike. This prohibition is commonly referred to as “anti-scab” legislation.

In the province of Quebec, employers are prevented from using outside as well as inside replacement workers during a strike. Even in BC, employers can use management or other existing employees to replace striking workers, but this is restricted in Quebec.

The policy rationale for “anti-scab” legislation is to avoid picket line violence, and prevent replacement workers from interfering with the goals of legally striking workers.

All jurisdictions place preconditions on the right to strike or lockout. These provisions are intended to encourage the parties to reach a collective agreement without having to resort to such extreme measures. These provisions include mandatory third-party intervention, minimum notice of intended strike or lockout action, and final offer votes.

Remedies for illegal strikes or lockouts can be sought from labour boards, arbitration boards, and the courts. A typical remedy may be an injunction to stop the illegal action or a demand for damages associated with actual losses incurred as a result of the illegal action.

In addition, an employer may properly discipline employees who strike illegally.

Interest arbitration is a form of third-party intervention when the parties cannot reach agreement. An independent arbitrator is chosen to impose terms for a collective agreement.

Picketing      

With the exception of Alberta, British Columbia, and New Brunswick, most jurisdictions do not address picketing during strikes, preferring instead to rely on the Criminal Code of Canada to govern picket line behaviour.

At issue are the competing interests of striking workers to communicate their dissatisfaction in a public way and the employer’s right to conduct business unencumbered by strikers.

The Supreme Court has declared that “picketing is an exercise in freedom of expression.”

That freedom typically extends to the point where the picketers would obstruct passage in and out of the employer’s place of business, though the question of what constitutes obstruction is often not easy to determine in practice.

Secondary picketing involves the picketing of another employer’s business that is economically tied to the struck employer. This would include major suppliers or customers.

In the past, this form of picketing was illegal, but a 2002 Supreme Court decision deemed it legal, provided the actions of the picketers themselves are not illegal.

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The Duty of Fair Representation   

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To temper the right of unions as the exclusive bargaining agent for the bargaining unit, labour statutes obligate them to fairly represent everyone in that bargaining unit. This is known as the duty of fair representation.

The union must not act in a manner that is arbitrary, discriminatory, or in bad faith when choosing to represent individual members of the bargaining unit.

This obligation/duty can sometimes create a problem when, for example, a worker has a dispute with a co-worker or one employee has been promoted over another, and both are members in the same bargaining unit. The question then arises: How does a union fairly represent both employees who have opposite interests in the outcome?

Duty of fair representation complaints are handled by labour boards. Remedies for a breach of the duty could include an order that the union take an employee’s grievance to arbitration or compensate an employee. Although the complaint is against the union, the employer has a vested interest in the outcome particularly if the union is ordered to take grievance to arbitration.

The Charter Slide 8.13

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The Canadian Charter of Rights and Freedoms  The Charter was adopted in 1982 and was made part of the Constitution Act. The Charter takes precedence over all other Canadian laws.  A constitution sets out the limits upon the government in relation to its citizens. Essentially, it is a document that protects Canadians against abuse from all levels of government. As such, any individual or group may challenge laws or government actions on the basis that Charter rights have been violated.

Meritorious Charter cases are heard and decided by the Supreme Court of Canada.

Until recently, the Charter has had limited impact on labour relations. However, in 2007, the Supreme Court reversed itself and abandoned the interpretation that “freedom of association” does not apply to collective bargaining. In the Health Sciences case, the court ruled that the general process of collective bargaining is protected under the right of freedom of association.

It will take some time to determine how this case will affect such issues as the right to strike, the right to exclude certain workers from unionizing, and how governments intervene in strikes or lockouts with back-to-work legislation.

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Human Rights and Equity Slide 8.14

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Since the early 1980s, Canada has experienced an expansion of the provincial and federal human rights codes. These have resulted in new and ever-changing definitions of what constitutes discrimination on both individual and group levels.  From an industrial relations perspective, the concepts of adverse impact discrimination and the undue hardship threshold for accommodation have had significant impact on the collective bargaining system.

A freely negotiated clause in a collective agreement, which hitherto would have been legal, can now be deemed to constitute adverse impact discrimination on an individual or group.

Employers are now compelled to accommodate individual employees because of a disability or for religious reasons to the point of undue hardship.

Unions must also accommodate short of “substituting discrimination against employees for the discrimination suffered by the complainant.”

In its ruling in The Meiorin case in 1999, the Supreme Court further expanded on the obligations that employers must meet when establishing rules that may discriminate against a group of workers.

The changing and expanding definitions of discrimination and the accompanying duties to accommodate are likely to challenge all actors in the industrial relations system for years to come.

Privacy Slide 8.15

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Privacy legislation is becoming increasingly important as governments move to protect intrusions on the private lives of its citizens. However, sometimes the individual’s right to privacy must be balanced against the employer’s legitimate right to protect its image, customers, property, and other employees.

The most common conflicts thus far have been in cases where employers have implemented drug or alcohol testing for employees who work in safety-sensitive jobs.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. What is the one of the “paradoxes” of Canadian labour law? (p. 193) 2. What was the effect of the 1925 “Snider Case” on Canada’s labour relations system? (p. 195) 3. What was the significance of the US National Labour Relations Act (or Wagner Act) of 1935 in shaping Canada’s Privy Council Order 1003 (1944) (PC 1003)? In other words, how did it influence PC 1003? (p. 194) 4. What are some of the industries that fall under federal jurisdiction in Canada? (p. 196)

5. What is the role of a labour relations board? (p. 197) 6. What common remedies can a labour board impose if labour law is violated? (p. 198) 7. What is anti-union animus? (p. 199) 8. What are some of the factors that make up a “community of interest” among workers? (p. 202) 9. Explain the two basic models for certification found in Canada’s 11 jurisdictions? (pp. 202– 203) 10. Which union security clause provides the union with the most security? (p. 207) 11. How does the Rand Formula work? (p. 207) 12. What are some examples of bad-faith bargaining? (p. 209)

13. Distinguish a strike from a lockout. (p. 210) 14. Differentiate between interest arbitration and first-contract arbitration. (p. 212) 15. What was the importance of the Pepsi case in relation to the law of picketing? (p. 213) 16. What is the duty of fair representation? (p. 214) 17. What is grievance swapping? (p. 216) 18. How did the 2007 Supreme Court of Canada’s decision in Health Sciences alter the application of the Charter in collective bargaining? (pp. 218–219) 19. What three-part test did the Supreme Court of Canada prescribe in the Meiorin case? (p. 220) 20. Define the terms “pay equity” and “employment equity.” (p. 221)

21. Describe the potential conflict between privacy law and human rights law. (p. 221) .

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Beyond-the-text questions The following question refers to the vignette at the beginning of the chapter on page 192.

22. What factors do you believe contributed to the CAW’s inability to organize more employees at Starbucks? What strategies do you think may have helped the CAW be more successful?

Labour relations code exercise Using a current labour relations code for the province in which you reside, answer the following questions: 23. In which section of the code would you find reference to the duty of fair representation?

24. Does the code in your province provide for first contract arbitration?

25. Which certification model does your province use?

26. Does your province’s code require, at a minimum, that the Rand formula be incorporated into every collective agreement?

27. Does your province’s code prohibit the use of replacement workers during a strike?

Challenge questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

28. The duty of fair representation is an onerous one, which unions take very seriously. When both the victim and the harasser are union members, it is particularly difficult for a union to fairly represent both sides. What amendments to the labour legislation would you favour to address such problems?

29. Would you favour the introduction of “anti-scab” legislation in your province? If so, why; if no, why not?

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Chapter 9

The Individual Employment Contract and Employment Legislation in Canada Chapter Overview The field of industrial relations is concerned with the employment relationship in both unionized and non-unionized environments. This chapter deals with the individual employment contract and employment-related legislation within the non-unionized sector. Similarities and differences between the two regimes are noted throughout the chapter.

Chapter nine represents the last in a series of three chapters dedicated to the external inputs or environment in the simplified model of the industrial relations system. We begin with a brief discussion of the advantages and disadvantages as well as the inflexibility found in the common law of unjust dismissal. Next, the first cornerstone of the law governing the individual employment relationship—the common law contract of employment—is thoroughly explored. This exploration includes a legal definition of the term “employee,” the implied contractual obligations placed upon employees and employers, and what constitutes wrongful dismissal.

The second part of the chapter is dedicated to the second cornerstone of the law governing the individual employment relationship—namely, protective employment legislation, which serves as a “floor of rights” for all workers. These statutes include employment standards, human rights, occupational health and safety, and workers compensation acts. With discussion of each of these acts, important and interesting differences and similarities between jurisdictions are noted. Moreover, attention is given to present-day and future controversies associated with each statute. In some cases, we find overlaps and certainly some spill-over effects of protective employment legislation into the collective bargaining regime.

The chapter concludes with a look at the internal and external systems within health and safety legislation, as well as the methods of enforcement. Lastly, a brief description of workers compensation legislation is provided.

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Lecture Outline and PowerPoint Slides The External Inputs/Environment Slides 9.1 and 9.2

Chapter 9: The Individual Employment Contract and Employment Legislation  The field of industrial relations encompasses all aspects of the employment relationship, whether employees are unionized or not. As such, it is important to look at individual employment and the laws that govern that relationship.  To some extent, there is a spill-over effect from changes in individual employment law to labour (collective labour) law and vice versa.  The two cornerstones governing the individual employment law are: 1) the common law contract of employment, and 2) protective employment legislation.

Who is an Employee?

Slide 9.3

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The question of whether a person is legally defined as an employee is of critical importance because an individual employment contract can only exist between an employer and employee. The rights and obligations of each party flow from that contract.  The traditional test for determining employee status is illustrated in Exhibit 9.1 on page 226. However, in some cases, that distinction is not so easily made.  Sometimes, the employment relationship is blurred by employers that want to increase flexibility, or avoid the costs associated with meeting obligations under the employment contract or other protective legislation.

In some cases, it is difficult to distinguish between contingent workers, independent contractors, dependent contractors, and employees. A person might not fit the strict definition of “employee,” but may be an “intermediate” worker whose economic subordination would still entitle him/her to the same rights as an employee.

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The Contract of Employment Slide 9.4

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The Contract of Employment  There are three elements necessary to establish a contract of employment: 1) an offer (typically by the employer), 2) the acceptance of an offer (typically by the employee), and 3) terms that are sufficiently certain to enforce, which can be in writing (ideally) or implied.  Often times the terms of employment contracts are implied, and it is up to the courts to determine what those terms are. Over the years, courts have developed a standardized set of implied terms for all employment contracts.

These implied rights and duties (obligations) apply to both employers and employees.

Implied Contractual Obligations of the Employee  Employees have a duty of fidelity toward their employers. This is essentially an obligation to further the firm’s interests.  This duty or obligation originated in the employment contract of feudal England, which survived into the industrial revolution and into our modern age. However, courts have since relaxed this duty to reflect societal values. For example, at one time this duty was so draconically applied it meant an employee who quit his job without his master’s permission could be imprisoned under the Master and Servant Act.  Fortunately, the law now recognizes the employee’s personal interests and tries to balance them with those of the employer. A guideline of the duty of fidelity is provided in Exhibit 9.2 on page 227.  Depending on the situation, an employee’s failure to live up to his/her duty of fidelity can be considered a breach of the employment contract, giving the employer just cause to terminate the individual without any notice period.

Implied Contractual Obligations of the Employer  The extent of employer obligations that courts imply into the employment contract means employees enjoy more protection than ever before. The following are the obligations placed upon employers under the employment contract: o Pay wages for work actually done. In the absence of express or implied contractual provisions, the employer does not have to provide actual working opportunities, and cannot impose a layoff. However, a layoff due to lack of work is treated as constructive dismissal and the employee is entitled to proper notice or payment in lieu of notice. o Provide a reasonably safe workplace. Most employees also receive rights and are entitled to compensation under health-and-safety and workers-compensation legislation. o Provide employee with job satisfaction. This recent development by the courts recognizes that, in certain situations, job satisfaction may be of importance to some employees. o Treat employees fairly. Some argue the courts should imply an independent duty of fairness to all facets of the employment relationship, as it is done under collective agreement arbitration. However, this is presently not the case. o Give reasonable notice of termination. An employer has the choice between giving reasonable notice of termination or pay in lieu of notice. In a wrongful dismissal action, an employee’s damages are limited by the compensation and benefits he/she would have received had reasonable notice been given.

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Presently, the courts require employers to act professionally and in good faith only in the context of dismissals. When the court finds an employer has not fulfilled these requirements it may increase the reasonable notice period by several months.

In some cases, courts have held that employees who quit because of unfair treatment can sue for constructive dismissal.

How Much Notice is Reasonable?   

There is a need to cushion the employee against the financial blow of unemployment.

If a terminated employee is likely to experience difficulty finding new work because of a poor labour market, his/her skills, qualifications, experience, or age, a court will generally increase what it considers a reasonable notice period.

The characteristics of the job also affect what is reasonable notice. For example, employees who held positions of high status are typically awarded longer notice periods by the courts.

Unprofessional or bad-faith conduct on the employer’s part in handling the dismissal  When this happens courts will award extra notice (3–8 months) depending on the severity of the action.  The inducement factor refers to a situation whereby an employee is induced to leave a secure, well-paying job for another and shortly thereafter is terminated. The courts will lengthen the notice period in such instances.  Length of service also determines what a reasonable notice period is.  Typically, the notice period increases depending on the employee’s seniority. However, contrary to popular belief there is no set formula, nor is the employee’s prior quality of work factored in by the courts when determining what reasonable notice is.

Wrongful Dismissal at Common Law Slide 9.5

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In a non-union setting, “wrongful dismissal” occurs when an employee is dismissed without just cause and the employer has not provided sufficient notice or pay in lieu of notice.  When an employer is able to demonstrate just cause for a dismissal, the employee is not entitled to notice or pay in lieu.  An employer may dismiss an employee when: 1) economic conditions make it unprofitable to retain him/her, 2) the employee commits misconduct or performs unsatisfactorily, and 3) the previous two factors combine as the grounds for dismissal.

Almost all wrongful dismissal cases involve notice period or compensation and are not about whether an employee can keep his/her job.

At common law an employee has no legal right to keep his/her job. At most, they can get compensation in cases where the employer cannot provide just cause.

Economic Dismissals  An employer may dismiss an employee for economic reasons, but must provide the required notice period or pay in lieu. However, it is important to note just cause cannot be established when dismissing an employee for purely economic reasons. .

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If an employment contract contains an express-notice-period that equals or surpasses what the employee would receive under employment standards legislation, then this express-noticeperiod will prevail.

If there is no express-notice-period, courts will imply a reasonable notice period based on the factors discussed in the previous section.

Constructive Dismissals  The constructive dismissal doctrine holds that a unilateral change of any significant term or condition in the contract by the employer constitutes a repudiatory breach, which entitles the employee to quit and sue for damages.  Damages would consist of whatever the employee’s wages and other contractual entitlements were over the contractual notice period.  Interestingly, at common law the constructive dismissal doctrine hampers management flexibility more so than in most collective agreements.

Performance-Related Dismissals  An employer is entitled to summarily dismiss, without notice, an employee who commits acts of misconduct or incompetence.  Summary dismissals are warranted in cases of dishonesty, deliberate insubordination, gross incompetence that substantially damages production, assaults, etc.  In situations where performance is the issue, the question arises: Did the employer have just cause for summary dismissal? To meet the just cause standard the employer needs to show that the decision was: 1) rational and for the good of the firm, 2) made in good faith and nondiscriminatorily, and 3) proportional to the harm the employee caused to the production process in the context of each case.

Even in cases of misconduct or poor performance, summary dismissal might not be justified if there are mitigating circumstances, or the courts deem the situation was not serious enough to warrant dismissal.

Moreover, employers are usually required to have first applied corrective measures prior to the dismissal. A list of these measures is provided on page 232. However, these can be dispensed with if the employee likely has no remedial potential or his/her conduct severely damaged the firm.

Remedies  Wrongfully dismissed employees cannot get their jobs back at common law. In contrast, a unionized worker can be reinstated if an arbitrator finds that he/she was wrongfully dismissed.  Another drawback at common law is the cost of litigation. For unionized employees the cost is borne by the union, which is supported by the collection of union dues.  The courts will not “make whole” the employee. At best, a dismissed employee will only be compensated for lost wages, benefits, and other expectancies during the notice period, and not for psychological harm or injury to reputation.  Employees can only be compensated for psychological harm or injury to reputation if the employer commits a separate actionable wrong.  Courts can award punitive damages in cases where there is evidence that the employer’s treatment of the employee was heavy-handed. Keays v. Honda is an example where the employee was awarded $100,000 for such employer conduct.

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Protective Employment Legislation Slide 9.6

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The following four statutes establish a “floor of rights” for Canadian workers. That is to say, collective agreements and employment contracts can exceed, but must at least meet, the minimum standards set out in these statutes.  The competitive pressures of globalization have caused Canadian jurisdictions to resist expanding the “floor of rights.”  To some extent governments are limited in the changes they can make to employment statutes by the Charter of Rights and Freedoms, especially section 15, which guarantees equal treatment for disadvantaged groups (women, visible minorities, the disabled, and aboriginals).

If any provision in a statute disproportionately disadvantaged a protected group, it could be found unconstitutional under the Charter.

It is important to note that any employment protection statute is only effective if it is effectively enforced and when workers know what their rights are.

Employment Standards Acts Slides 9.7 and 9.8

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These acts provide workers with a statutory “floor of rights,” which they do not have to go to courts to have enforced.

While expansion of state-provided rights may be somewhat of a disincentive for workers to unionize, it is perhaps equally beneficial for unions, since arbitrators must consider employment standards in their decisions.

Except for certain sectors (see page 196), employment legislation standards are provincially regulated.

While provisions in various employment standards acts are similar, there are important differences as well (see Exhibit 9.4 on page 236).

For example, in Quebec and Saskatchewan, part-time workers are entitled to many of the benefits that full-time workers enjoy, but on a pro-rated basis.

Another interesting innovation is found in the Quebec Labour Standards Act (2003) that gives workers the right not to be subjected to bullying and intimidation by the employer or other employees.

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Human Rights Legislation Slides 9.9 and 9.10

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Each of the 11 jurisdictions in Canada has its own human rights legislation.  Human rights legislation goes far beyond just ensuring everyone is treated equally by enshrining the goal of guaranteeing all persons the right to full participation in the workforce.  Exhibit 9.5 on page 237 and Slide 9.10 list 23 expressly protected grounds on which discrimination is prohibited.

However, not all 23 grounds are listed in every Canadian jurisdiction.  The courts can “read in” a missing prohibited ground using Section 15 of the Charter, if it feels the group in question has suffered historical disadvantages.  In Ontario, the most frequent human rights complaints relate to race/colour (23%) and disability (23%).  Unlike employment standards statutes, human rights legislation contains broad “make whole” remedies, which tribunals can enforce.  Tribunals can issue orders to reinstate, hire, or promote employees whose human rights have been violated. Moreover, human rights tribunals have the power to impose comprehensive affirmative action programs to eliminate systemic discrimination.

Unfortunately, human rights complaints are processed slowly. Delays of three years from the date of filing to the decision stage are commonplace.

Indirect Discrimination and Duty to Accommodate  It is possible for discrimination to take place even in cases where it was unintended. For example, if a work rule policy or management decision has the effect of disproportionately disadvantaging a protected group (women, visible minorities, aboriginals, or the disabled), then indirect discrimination may be found.  In cases where direct or indirect discrimination is alleged, the employer needs to prove (burden of proof) his/her actions were based on a “bona fide occupational requirement” (BFOR). The three elements of a BFOR defence are discussed on page 238.  The employer also has a duty to accommodate employees to the point of undue hardship. This is imposed to balance the rights of the employee with those of the employer. It also prevents employers from claiming they cannot afford the accommodation measures, when the cost could be easily absorbed.

Sexual Harassment  Human rights acts prohibit harassment of any employees on a number of protected grounds, including sex.  The law distinguishes between two types of harassment: quid pro quo and poisoned-work atmosphere.  In quid pro quo harassment (this for that), a favour is promised in exchange for sexual favours.  In poisoned-work-atmosphere harassment, sexual innuendos, insults, bad jokes, etc. create a work environment that causes another person to suffer psychological distress.

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An employer has the legal obligation to provide a harassment-free workplace even if the harassment is committed by customers, suppliers, or visitors. However, an employee is expected to complain, or at least make his/her employer aware of the harassment, before the employer can be held liable.

An employer can be found liable even if the harassment takes place away from work or during non-working time at company-sponsored events (e.g., parties, golf tournaments, retreats, etc.).

Health and Safety Legislation Slide 9.11

The External System  All 11 Canadian jurisdictions have health and safety legislation to prevent workplace accidents, illness, and disease. Employers are compelled to abide by the standards set in these statutes. This is referred to as the “external” system for health and safety.  The legislation imposes “performance duties” on both the employer and the workers to promote health and safety.  The employer is required to take every reasonable precaution to ensure the health of its workers and those who visit the worksite. Some typical specific duties imposed on employers, employees, and contractors entering the worksite are provided on page 240.

The Internal System  All jurisdictions also recognize the need to supplement the external system with an internal system, which involves employees and management taking responsibility for dealing with their own unique health and safety issues.  The internal system is in place to identify actual and potential hazards, try and minimize these, investigate accidents and injuries when they occur, and propose solutions for improving health and safety.  Joint health-and-safety committees are typically required in workplaces with 20 or more employees. These are made up of an equal number of management and employee representatives.  Evidence shows these joint committees dramatically reduce the level of workplace injuries.  The committee’s task is to process health-and-safety complaints, monitor all facets of production to enhance health and safety, educate workers and management alike, and report violations to government inspectors.  Legislation requires employers to cooperate with the committee and pay for the time employees serve on it. If an employer chooses not to cooperate, the committee can call a government investigator who may issue a stop-work order to ensure safety in the workplace.  Refusing unsafe work without fear of reprisals is the right of every worker. At common law employees can disregard orders if they honestly and reasonably believe it to be unsafe.

However, if they lose their jobs as a result they cannot be reinstated. They can only sue for damages.  Unionized employees also have the same right to refuse unsafe work, but if dismissed, they may be reinstated.  Hazard information must be provided to workers as part of the employer’s general performance duty, under the health and safety acts, and as part of the Workplace Hazardous Materials Information System (WHMIS). .

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WHMIS is a national system for hazardous material identification and handling contained in provincial WHMIS statutes. The four main components to this system are listed on page 242.

Enforcement  Enforcement of health and safety legislation comprises a combination of conciliatory and coercive measures.  Unfortunately for Canadian workers, disobedience to health and safety laws is commonplace.

Reasons may include too few government inspectors and workers’ fear of job loss or reprisals.  Inspectors rely on two models for prosecuting offenders, depending on the jurisdiction: 1) criminal courts (this is the most prevalent model), and 2) penalties imposed by specialized health and safety tribunals.

Workers Compensation Legislation Slide 9.12

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Workers compensation legislation operates as an employer-funded insurance plan. Though the particular industry will establish the insurance premium level (e.g., construction is more dangerous than retail sales), individual employers may pay higher or lower premiums depending on their own safety records. Those with better safety records pay lower premiums.  The plan pays for employees who have been disabled by an accident or disease “arising out of and in the course of employment.”

In exchange for the benefit of receiving compensation, claimants (workers) are precluded from suing their employers.

In some cases, it is difficult to legally determine if the employee’s illness (as opposed to an injury) arose from his/her employment or personal lifestyle.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. The Dowling case featured in the vignette at the beginning of the chapter highlights some of the benefits as well as the limitations associated with the common law of unjust dismissal.

What is the “best outcome scenario” for an unjustly dismissed employee at common law and how does it differ from that of a unionized employee in a similar situation? At common law a dismissed employee can only sue for damages and will not get his/her job back. For a unionized employee, it is possible to be reinstated with lost wages. (p. 223) 2. What are the two cornerstones in the law governing the individual employment relationship?

The common law contract of employment and protective employment legislation. (p. 224) 3. Why is it so important to determine from the outset whether someone is legally defined as an employee at common law? A contract of employment can only exist between an employer and an employee. With a contract of employment come implied rights and obligations, which affect both the employer and employee. For a person to benefit from those rights when remedies are sought, he/she needs to be an employee. (pp. 225–231) 4. What is the duty of fidelity imposed on employees? (pp. 227–228) 5. The need to cushion the employee against the financial blow of unemployment is an implied contractual obligation placed upon the employer. This need is given paramount importance by the courts when determining the length of notice, or the amount paid in lieu, when an employee is unjustly dismissed. What are the factors the courts will take into account? The likely difficulty the employee will experience in finding replacement work, personal skills, qualifications, experience, and age. (p. 230) 6. What are the three reasons an employer may dismiss a worker? (p. 231) 7. What is summary dismissal and under what conditions would it be justified? (p. 232) 8. If an employer wants to demonstrate just cause for dismissing an employee for performancerelated deficiencies, what three things would he/she need to show to justify the decision? (p. 232) 9. Explain what is meant by the term “statutory floor of rights.” (p.233) 10. In what way(s) could the expansion of the statutory floor of rights dissuade workers from joining unions? (p. 234) 11. Why does the author claim it will be “exceedingly difficult to negotiate transnational employment rights in free trade treaties?” (p. 234) 12. What are some of the reasons given for the lengthy delays in processing human rights complaints? (p. 238) 13. Under which condition would it be legal for an employer to engage in direct or indirect discrimination? (p. 238) .

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14. What are the three elements of the BFOR defence? (p. 238) 15. What is the point of undue hardship and how does it relate to an employer’s duty to accommodate? (p. 238) 16. Describe the two forms of sexual harassment recognized in law. Quid pro quo and poisonedwork-atmosphere harassment. (p. 239) 17. Briefly differentiate between the “external” and “internal” system for regulating health-andsafety legislation. (pp. 240–242) 18. What are the two models for prosecuting employers that violate health-and-safety legislation?

Criminal courts and specialized health-and-safety tribunals. (p.242) 19. What is workers compensation legislation? In other words, under which conditions would workers generally be compensated? (p. 243)

Beyond-the-text questions 20. The decision of the Supreme Court of Canada in the McLeod v. Egan case is interesting because it compels arbitrators to consider employment standards when rendering decisions. What was at issue in the McLeod v. Egan case? Do you feel unions should be able to import rights from various employment statutes which were not originally negotiated in the collective agreement?

21. Define the term “wrongful dismissal.”

22. If existing human rights legislation applies to both unionized and non-unionized employees, why would a union strive to include reference to the act in a collective agreement?

Employment standards act exercise Using a current employment standards act for the province in which you reside, answer the following questions: 23. What is the minimum hourly wage for employees and in what section of the act would you find this information?

24. What are the deemed statutory holidays in your jurisdiction?

25. What is the maximum number of hours an employee can work in one day? One week?

26. What is the maximum number of consecutive days an employee can work before the employer needs to provide a day off?

27. What is the minimum length of notice an employer needs to provide workers who are dismissed? Does this length of notice differ depending on length of service or the number of employees dismissed at once?

28. Explain what the “reasonable person” standard is and why it is so important in both common law and arbitral jurisprudence. .

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Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

29. A human resources (HR) manager claims, “When workers join unions, management loses flexibility over work processes, etc.” Using the doctrine of constructive dismissal, construct an argument to refute the HR manager’s claim.

30. A remote and little-known Canadian university is trying to formulate a harassment policy for the first time. The committee to develop this policy comprises union and management representatives. In an effort to appeal to everyone’s sense of collegiality and establish common ground, the Chair of the committee, who is also the director of Human Resources, states, “Providing a harassment free workplace is everyone’s responsibility, therefore we should all be concerned with this issue.” Is this statement correct?

31. Human rights legislation allows for the implementation of “special programs” to assist designated group members (women, visible minorities, the disabled, and aboriginals) with respect to hiring and promotions in the workplace. To what extent do these special measures represent preferential treatment at the expense of non-designated group members, if at all?

32. Workers compensation is an employer-funded insurance plan. Employees who meet the criteria receive benefits under this plan. However, they are precluded from suing their employers when their injuries, accidents, or disease arose out of and in the course of employment. Do you feel this is a fair trade-off, or would the ability to sue present a greater incentive for employers to provide safer working conditions?

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Chapter 10

Collective Bargaining: Structure, Process, and Innovation Chapter Overview Chapter ten is the first in a series of four chapters dealing with the interaction of actors in the industrial relations system. It also heralds the beginning of part three in the text, which coincides with the conversion process in the simplified industrial relations model. The focus of discussion in this chapter is collective bargaining.

The chapter begins with a description of six basic bargaining structures found in Canada and the basis upon which these are differentiated. The impact of bargaining structure and the trends relating to particular forms, such as pattern and decentralized bargaining, are also highlighted. What is made clear is that the structure itself often has an impact on the bargaining power of the parties and therefore the outcome of negotiations.

Next, the model of collective bargaining is introduced to illustrate the relationships between the determinants, the goals and power of the actors, the negotiation process, and the bargaining outcomes.

The effects of various influences (determinants), including environmental factors, socio-demographic factors, and organizational characteristics, on the goals and the bargaining power of the actors are discussed.

The second part of the chapter explains the dynamics of the negotiation process and some of the innovations that have been developed to improve collective bargaining. To begin, the concept of the potential zone of agreement is examined to help us conceptualize the bargaining process. Then the various approaches, techniques, and strategies used by management and the union are identified and explored. Various innovations within the context of adversarial and principled bargaining are described. The underlying principles of mutual-gains bargaining and its limitations are examined, followed by a brief discussion of the outcomes of collective bargaining.

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Lecture Outline and PowerPoint Slides The Conversion Process/Interaction Slides 10.1 and 10.2 Chapter 10: Collective Bargaining: Structure, Process, and Innovation  Chapter ten is the first of four chapters, in part three of the text, dedicated to the conversion process as it is referred to in the simplified industrial relations model in chapter one.  The conversion process involves the interaction of the actors (Part 1) in the industrial relations system.  In this chapter, the focus is on collective bargaining and how the process is used by management and labour (the actors) to achieve their goals.

Definition of Collective Bargaining Slide 10.3

Collective bargaining  Collective bargaining is a decision-making process involving management and union negotiators, who determine the terms and conditions of employment for a bargaining unit for a specified length of time.  Collective bargaining is a mechanism whereby differences between the actors can be resolved and codified in a binding document called a collective agreement.

Collective agreement  A collective agreement is a contract between management and the union representing a bargaining unit. This contract is also known as a collective bargaining agreement or labour agreement.  This agreement represents the outcome of collective bargaining.  The terms and conditions contained within the agreement are binding on the parties. In other words, both management and bargaining unit members are expected to adhere to the terms and conditions outlined in the contract.  The collective agreement details what the parties have agreed to with respect to such things as wages, benefits, hours of work, seniority, layoffs, etc.

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The Structure of Collective Bargaining Slide 10.4

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Bargaining structure refers to the number and diversity of employees and employers affected by collective bargaining.  There are essentially six general bargaining structures found in Canada. They are classified on the basis of: 1) the number of employers involved, 2) the number of establishments where negotiations occur, and 3) the number of unions involved. Table 10.1 on pages 250 and 251 provides detailed descriptions and examples for each of the six cases.

The bargaining structure in Canada is highly decentralized, with negotiations involving a single union and single employer being the most common type.

Having an awareness of the elements of bargaining structure helps explain the dynamics at the negotiating table. For example, one would expect fewer complications in situation number one (single employer–single union) than in situation number four or five. This is mainly due to the increased internal politics found in a negotiation team comprising various stakeholders (multiple employers or multiple unions).

An interesting variation found in automobile manufacturing, forestry, hospitals, and provincial civil services involves a combination of multi-establishment negotiations (single or multiemployer) with single-establishment negotiations. In such a case, a master agreement is negotiated at a central bargaining table prior to or simultaneously with local negotiations.

Another variation seen in the Canadian beer industry involved the transformation of three separate single-employer, single-union, multi-establishment bargaining structures into a multiemployer bargaining structure. This was achieved when management at Molson, Labatt, and Carling collaborated and timed the expiration of their collective agreements to fall on the same date.

Pattern Bargaining  Pattern bargaining occurs when a key negotiated settlement resulting from collective bargaining sets the standard for other negotiated settlements or bargaining rounds. Wage gains achieved in one set of negotiations can influence what is agreed to in another set involving other unions or employers.  Pattern bargaining benefits unions in their attempt to “take wages out of competition” (chapter 2).  Pattern and centralized bargaining, which involved a number of employers, helped standardize wages and benefits in the meat-packing industry as well as the pulp and paper industry in British Columbia.  Beginning in the 1980s, factors such as increased competition, globalization, advanced technology, deregulation, privatization, etc. caused a decline in pattern and centralized bargaining. The exception to this trend is the Canadian auto industry.  The Canadian Auto Workers (CAW) target one of the Big Three automakers (GM, Ford, and Chrysler) and use that negotiated settlement as a pattern to pressure the other firms. This way, the CAW can ensure wages, benefits, and working conditions are relatively equal between all unionized workers at GM, Ford, and Chrysler. A similar approach was achieved with Magna International Inc. This standardization tends to discourage the three automakers from competing on the basis of who has the lowest labour costs.

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Further Decentralization  The trend away from centralized bargaining, which began in the 1980s, continues in Canada.

This shift has occurred in meat-packing, forestry, and textile industries.  The factors contributing to decentralized bargaining include changes in corporate and regulatory structures such as deregulation, privatization of government services, and restructuring.  Decentralized bargaining tends to increase employers’ bargaining power, and helps them achieve more flexibility and control over the workplace.  While organizations move to decentralize, unions have tended to merge together to overcome the weakness in bargaining power created by decentralization.

Model of the Collective Bargaining Process Slide 10.5

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There are many outcomes that result from collective bargaining, but the focus of interest is the collective agreement.  The collective bargaining process (negotiation) links the actors’ goals and power with bargaining outcomes. The dynamics involved in collective bargaining explains, in part, why there are differences between the initial preferences and goals of each party and what is agreed to in the collective agreement.

The goals of management and the union, along with the relative power of each to achieve those goals, determine what is contained in the collective agreement.

Those goals and the power of the actors are in turn determined by: 1) their preferences, and 2) environmental, socio-demographic, and organizational factors.

The collective agreement (bargaining outcome) in turn affects the preferences of the parties and the environmental, socio-demographic, and organizational factors.

Union and Management Bargaining Goals Slide 10.6

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Once issues of concern have been identified, the process for establishing bargaining goals is similar for management and unions. That is, each party prioritizes and determines what their target and resistance points are for each issue.  A target point represents a position one ideally aims for, whereas a resistance point is the lowest acceptable outcome.  Each party’s negotiation team consults with their respective constituents to garner a mandate. In the union’s case, ideally the mandate filters upwards from involved rank-and-file members. In contrast, the management negotiator’s mandate flows downward from senior managers.

In some, if not most, cases, it is expected the goals of management will differ from those of the union due to the inherent conflict that exists between them.

Distributive issues are those where the gains of one party inevitably come at the expense of the other. A wage increase is a good example. .

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Integrative issues involve those where common ground exists to the extent that practical solutions can benefit both parties. The best example of this is workplace safety.

Environmental Factors  The bargaining goals of management and the union are heavily influenced by a variety of environmental factors, such as: 1) micro- and macro-economics, 2) technology, 3) laws and statutes, and 4) societal norms.  One would expect unions to favour cost-of-living adjustments (COLA) in periods of high inflation or increased job security clauses during a downturn in the economy.  Management would likely seek improved flexibility in work rules in order to have the freedom to introduce technologies that increase output and quality while reducing the number of workers needed.

Socio-demographic Factors  These relate to the composition of the bargaining unit with respect to age, gender, education, skill, marital status, etc. The make-up of the union membership determines to a large extent what the position of the negotiating team is on certain issues.  A political organization such as a union, which represents its constituents, will seek to address the concerns of those constituents. If the union membership consists of older workers whose preferences are improved pensions and seniority rights then it is likely these will filter upwards to the union executive and to negotiators who will formulate bargaining goals based on those preferences.  The difficulty for the union leadership is equivalent to the challenges faced by leaders of other democratic institutions: namely, how does one satisfy the preferences of the majority without ignoring the needs of minorities within the same membership? The increasing number of women workers who join unions presents such a challenge since their preferences/needs may be quite different than those of male workers (see Exhibit 10.3 on page 259).

Organizational Factors  Workplace reorganization and shifting business strategies influence management’s bargaining goals. Throughout the 1980s and 1990s businesses sought to increase workplace flexibility and traditional work practices. To accomplish this, changes in existing collective agreement clauses needed to be negotiated.  In response to these management goals, unions expressed their need for increased job security and improved training opportunities for their members.

The Concept of Bargaining Power Slide 10.7

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Power exists and is a real force that affects all dimensions of the industrial relations system, including all the elements within the collective bargaining model.  The power a party wields over the other during collective bargaining waxes and wanes over time, the issues being negotiated, and the tactics used.  The balance of power between union and management is dependent upon the same factors that help determine their bargaining goals.

The linkages and the interaction between and among the factors that increase or decrease the power of the parties are so complex that we cannot determine with certainty what the effects are on collective bargaining. .

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Environmental Factors  Public support for strikers or management during work stoppages can create pressure on governments to issue back-to-work orders or, as in several provinces, enact anti-scab legislation.  The legal environment can help tip the balance of power from one party to another. For example, legislation which requires that certain items be included in a collective agreement or amendments to labour relations codes can affect the power relationship. Consider also the effect of the Supreme Court of Canada’s ruling in the Health Services case previously discussed  Because the employment relationship is fundamentally an economic one, economic factors tend to have the most influence on each party’s bargaining power. During periods of economic growth (high product demand, low unemployment, generous wage increases in comparable workplaces) the cost of disagreement rises for management. This tends to favour the union during negotiations.  During the 1980s and 1990s there has been a general shift in the relative bargaining power of the parties, which has tended to favour management. This was caused by deregulation, privatization of government services, globalization, diffusion of technology, and the capital mobility, which together have made relocating “offshore” easier and more attractive to employers. These factors have reduced the ability of unions to “take wages out of competition.”

Socio-demographic Factors  Increased workforce diversity is generally accepted as beneficial for everyone. However, with diversity come disparate preferences, needs, and goals. The solidarity of a union is dependent on maintaining and projecting a unified voice.  Ideally, from a strategic bargaining perspective, union negotiators prefer a bargaining unit that is like-minded and supportive of the union leadership. This is not always possible with a highly diverse bargaining unit. Consequently, this may have the effect of weakening the union’s bargaining power.

Organizational Factors  Such factors as the industry, the product produced, and the technology used all have an impact on the power of management to achieve favourable bargaining outcomes.  The union’s power is dependent upon the solidarity of its membership and its internal resources (bargaining expertise, volunteers, time, strike fund, etc.).  The intra-organizational dynamics can serve to strengthen or weaken a party. For example, the politicking between members of the same team may interfere or even overshadow union–management negotiations.

The Potential for Agreement in Negotiations Slide 10.8

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Collective bargaining (the negotiations) is a decisionmaking process that links the actors’ goals and power with the bargaining outcome (the collective agreement).

The manner in which union–management negotiations proceed can assume its own dynamics and can itself be a factor that determines what is ultimately agreed to in the collective agreement.

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The Potential Zone of Agreement  Slide 10.8, depicting the potential zone of agreement (also illustrated in figure 10.3 on page 266), is designed to help conceptualize the process of negotiation and provides a visual means for determining if common ground exists.  The concept illustrates a single monetary issue for pedagogical reasons. In reality, management and the union seldom negotiate over one single issue or deal with multiple issues one at a time.  Management’s resistance point is represented by the point Mgt Max. This is the maximum wage they are willing to pay. In contrast, the point Union Min represents the lowest wage the union is willing to accept (resistance point).  Understandably, management would prefer to pay the lowest possible wage and the workers represented by the union would like to receive the highest possible wage. However, due to the position of their resistance points, only area 3 represents a potential zone of agreement. In this example, we would expect the wage to fall within the range of area 3.  Areas 1 and 2 would not likely be the where the two parties would settle, unless one or both sides shifted their resistance points.  The difficulty with collective bargaining is that both parties engage in extensive gamesmanship to conceal their resistance points from each other. In fact, not doing so would demonstrate poor judgment due to the strategic value of this information.  The potential zone of agreement essentially depicts a buy–sell scenario where the buyer (employer) prefers to pay the lowest price while the seller (union) prefers to sell at the highest price.

Negotiating the Collective Agreement Slide 10.9

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When a collective agreement nears expiry, the union gives management notice of its intention to commence collective bargaining. The timeline for providing this notice varies depending on the jurisdiction. In Alberta, this notice must be given 60–120 days prior to the expiration of the contract and the parties must meet within 30 days after the notice has been provided. (Table 10.2 on page 268 provides timelines for other jurisdictions).  At the first meeting, the union typically provides management with a list of its demands followed with some customary statements. Management may provide the union with its own list of demands, but not always. In some cases, management may simply withdraw from the table and prepare an offer in response to the union’s demands.

Each party evaluates the other side’s proposal(s) in caucus and during negotiation meetings where issues are discussed and debated. This iterative process is repeated over days, or even months, until all issues have either been resolved or an impasse is reached.

If they cannot agree, either party may ask the government to appoint a conciliation officer to help. If conciliation efforts fail and the contract expires, the union can begin a series of steps leading to a legal strike. Likewise the employer may initiate steps leading to a legal lockout.

Each jurisdiction has its own mandated procedures before a strike or lockout can legally take place. In Alberta, the necessary steps for a strike involve submitting to 14 days of compulsory mediation, followed by a 14 day cooling-off period, and a strike vote; the union must then provide the employer with a minimum 72-hour strike notice.

It is important to note that contrary to public perception, strikes and lockouts are relatively rare.

Exhibit 10.5 on page 270 shows that over a ten-year period in Alberta, roughly 6% of collective agreements that expired actually resulted in work stoppages (strikes or lockouts). .

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Innovations in the Process of Bargaining  Conventional collective bargaining tends to be adversarial in nature and stressful on union– management relations. To improve this kind of bargaining, the parties have traditionally used mediation (conciliation) to help them reach agreement and avoid work stoppages.  In recognition of the lengthy negotiation process, some parties have chosen to begin negotiations well in advance of the statutory minimum-notice period.  In other cases, standing union–management committees have been established to deal with issues on an ongoing basis. These committees can resolve some issues right away, instead of waiting for the next round of bargaining. This can help reduce the number of issues at the negotiation table.     

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Mutual-gains bargaining (MGB), also referred to as interest-based bargaining, is a relatively new innovation developed as an alternative to the adversarial negotiation process.

The MGB approach encourages parties to focus on interests rather than their positions as they typically do in traditional bargaining. Four general procedures or statements are suggested to help the parties change their old bargaining behaviours. These are highlighted on page 272.

MGB is more likely to succeed in situations where the parties have relatively equal power, trust, and respect for one another.

Aside from mixed anecdotal accounts, there is little empirical evidence regarding the extent of usage of MGB-like approaches, their success, or their sustainability over time.

It has been reported that many attempts to adopt a less than adversarial approach have been stymied by union concerns over job security. It has also been suggested that monetary issues do not lend themselves very well to MGB-like approaches.

Preventive voluntary services provided by governments also represent innovations in bargaining. For example, the government of Newfoundland and Labrador and the federal government not only offer traditional mediation services, but also training focused on improving communication and conflict resolution skills for unions and management representatives.

These services are aimed at ameliorating the negotiation process, preventing breakdowns or escalation of problems, and generally improving labour–management relations.

There has also been a growth in the role of private sector neutrals in resolving disputes and relationship building. These neutrals are increasingly committed to developing principled approaches to facilitate dispute resolution (see Exhibit 10.7 on page 278).

The Outcomes of Collective Bargaining Slide 10.10

Organizational (i.e., Micro) Level  At the organizational level, the outcomes of collective bargaining include the following elements: 1) a collective agreement that specifies the terms and conditions of employment for bargaining unit members, 2) all the important consequences for compensation systems, productivity, and management practices, and 3) the ongoing union–management relationship, which can as a result become more or less adversarial.

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Socio-economic (i.e., Macro) Level  Bargaining outcomes can affect other unions, employers, whole industries, and the public at large. Taken together, all the settlements can set trends in wage increases or decreases and contribute to the country’s aggregate economic output.  Moreover, as the feedback loops in the framework on page 266 suggest, the outcomes have a cumulative influence on subsequent negotiations and the long-term union–management relationship.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. The author discusses six basic bargaining structures, which may be differentiated on the basis of three general considerations. What are these three considerations? 1) The number of employers involved, 2) the number of establishments where negotiations occur, and 3) the number of unions involved. (p. 249) 2. Which type of bargaining structure is the most prevalent in Canada? (p. 249) 3. What factors are responsible for Canada having one of the most decentralized bargaining structures in the world? (p. 251) 4. What is the “orbit of coercive comparison” in reference to pattern bargaining and how does this so-called “orbit” apply to bargaining strategy? (p. 252) 5. In what way does pattern bargaining generally benefit unions? (pp. 252–253) 6. What factors are likely to lead to further decentralization of collective bargaining in Canada? (p. 254) 7. In what way do firms and unions differ in the manner in which they garner approval from their respective constituents before arriving at the negotiation table? (p. 256) 8. What is the difference between integrative and distributive issues in the context of collective bargaining? Provide three examples each for both integrative and distributive issues. (p. 257) 9. In periods of high inflation, unions are likely to negotiate for cost-of-living adjustment (COLA) clauses during bargaining. What is a COLA clause and what purpose does it serve? (p. 258) 10. What are some of the challenges associated with increased diversity of the bargaining unit which union leaders need to consider during collective bargaining? (p. 258) 11. According to the author, what are the typical costs of disagreement with respect to collective negotiations? (p. 260) 12. Provide examples of the costs of agreement for both the union and management. (p. 260)

13. Define what bargaining power is and its effect on bargaining outcomes. (pp. 260–263) 14. Define the term “resistance point” and explain its significance to both parties during negotiations. (pp. 265–267) 15. Discuss the rationale, from a strategic standpoint, of not revealing one’s resistance point during bargaining. (p. 267) 16. List and describe three approaches used to improve traditional-type bargaining. (pp. 271–272) .

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17. What is mutual-gains bargaining, and what are its origins? (p. 272) 18. Explain the difference between “positions” and “interests” in collective bargaining. (p. 272) 19. What are some of the limitations that have been raised about mutual-gains bargaining? (pp. 273–276)

Beyond-the-text questions 20. It is generally accepted that centralized and pattern bargaining (related to bargaining structure) tend to enhance the bargaining power of unions and assist them in “taking wages out of competition.” Explain how this is possible.

21. Unions are political organizations. Leaders and some members of the executive are voted in by the people in the bargaining unit. In theory, if not in practice, this means the union leadership is beholden to the will of those constituents. In what way do you think the political nature of unions affects the process of collective bargaining?

22. Exhibit 10.5 on page 270 illustrates the number of expired contracts vs. percentage of work stoppages in Alberta. Figure 10.4 clearly shows that in the vast majority of cases when contracts expire, the parties are successful in agreeing without resorting to work stoppages.

What was the percentage of successfully negotiated contracts relative to expired contracts in your province between 1992 and 2002?

23. Read the opening vignette at the beginning of the chapter on pages 257–260 and answer the following question: Aside from the fact that “86% of the 1050 unionized employees rejected the company’s ‘final’ offer,” what strategic advantage, if any, did INCO gain from locking out the employees? Do you feel it would have been wiser to wait for the union to perhaps choose to strike? If so, why; if no, why not?

Labour relations code exercise Using a current labour relations code for the province in which you reside, answer the following questions: 24. What are the prerequisites for a legal strike?

25. In what ways do the prerequisites for a lockout differ from those of a strike?

26. Is there a statutory minimum length of time that a collective agreement needs to be in force? If so, how long?

27. Is there a maximum length of time for the parties to negotiate?

28. Are the parties allowed to reopen and negotiate part(s) of the collective agreement before it expires?

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Challenge questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

29. Discuss the merits of the following statement made by a union negotiator: “As a union leader my interests lie in satisfying and representing the needs and wants of my constituents. Right now they have overwhelmingly directed that I negotiate for a substantial wage increase. Therefore, as their negotiator, that is my position at the bargaining table. That position is based on my constituency’s expressed interest. So, from where I sit, interest-based bargaining is position-based bargaining. They are one in the same.”

30. The author makes the point that the challenges brought on by various environmental, sociodemographic, and intra-organizational factors have encouraged management and unions to experiment with mutual-gains bargaining. Yet, despite the intuitive appeal of this innovation, the traditional form of “hard” bargaining remains the predominant approach. In your opinion, why do you think that is the case?

Class activity 1. Film presentation As a suggestion, instructors may wish to consider showing the film Final Offer, produced by the National Film Board of Canada. The catalogue number is 113C0185117. The video runs for approximately 78 minutes.

Synopsis: This video was filmed during the 1984 collective bargaining talks between the Canadian arm of the UAW and General Motors. It clearly portrays the pressures placed on negotiators and the adversarial nature of traditional union–management bargaining.

A warning: It is recommended instructors view the video beforehand in order to determine the suitability of its content. In particular, there is strong language used which may be offensive to some. For example, there are 55 instances of the F*** word in the video, along with 8 other unsavoury words.

2. Fine Family Foods collective bargaining simulation This completely self-contained bargaining simulation along with marking guide and suggestions for its use is provided in Appendix A.

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Chapter 11

The Collective Agreement Chapter Overview A collective agreement contains clauses (also called articles) that explicitly set out the rights and privileges of bargaining unit members. As such it represents a concrete reminder for all bargaining unit members of the advantages of being represented by a union. The importance of the contract cannot be overstated—it lies at the very centre of the Canadian industrial relations system.

Chapter eleven begins with a brief discussion of the evolution of the collective agreement in Canada and the United States, which is followed by a description of how agreements are influenced by and in turn influence other legal developments that govern the workplace.

The rest of the chapter is dedicated to providing an overview of collective agreements by highlighting various clauses. To accomplish this, clauses are classified as belonging in four major groups, which are common to most agreements. For example, clauses and the issues surrounding topics such as management rights, union security, no-strike clauses, grievance arbitration procedures, labour– management committees, and joint-governance agreements are discussed within the context of the first major group of clauses. The first group governs the union–management relationship and controls conflict. The same pedagogic approach is repeated for articles found in the second major group (clauses that deal with the wage–effort bargain), the third group (containing articles which attempt to control jobs and work), and the fourth group (clauses that address issues of control of work behaviours and work environment).

The chapter concludes by highlighting clauses and issues (contained in the fourth group) that arise from the social and physical environment at work. Particular attention is directed toward three general areas: human rights, workplace behaviour, and occupation health and safety. In the case of human rights, present and future concerns about privacy, surveillance, and medical testing are explored.

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Lecture Outline and PowerPoint Slides The Conversion Process/Interaction Slides 11.1 and 11.2

Chapter 11: The Collective Agreement  The previous chapter dealt with the process of collective bargaining. In this chapter we discuss the tangible product or outcome of the bargaining process, which is referred to as a collective agreement.  Chapter eleven is the second chapter in part three of the text, which involves the conversion process as it is referred to in the simplified industrial relations model in chapter one. The most common types of clauses found in agreements are explored and discussed.

The Collective Agreement: Overview Slides 11.3 and 11.4

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The Collective Agreement  The agreement is a written contract between management and the union that sets out the terms and conditions of employment for a set period of time for a group of unionized workers.  The various clauses that are negotiated and included in the contract serve to govern some aspects of the employment relationship. The agreement is binding on all parties.  Negotiating the agreement and policing the rights contained within it, represent core functions of what unions do.  For rank-and-file members, the rights and privileges contained in a collective agreement provide a daily reminder of the benefits of union membership (see Slide 11.4)  In Canada and in the US, collective agreements tend to be quite lengthy and detailed in comparison to those in other countries.

Canadian collective agreements generally contain union security clauses.

In Canada, work stoppages are illegal during the terms of the collective agreement, and contracts need to include a grievance process. In the US, these issues are left for the parties to decide. .

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The Four Major Groups of Articles Found in Collective Agreements Slide 11.5

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While collective agreements can be lengthy and detailed, there are similarities in the kinds of clauses or articles they contain and how those clauses are organized.  Articles typically found in agreements can be classified into four major groups: 1) the union–management relationship and the control of conflict, 2) the wage–effort bargain, 3) the control of jobs and work, and 4) the control of work behaviour and the work environment.  In addition to the four main groups of articles, some agreements contain letters of understanding, memoranda of agreements, or other documents. These are sometimes considered part of the agreement, and in other cases are treated as unenforceable promises.

The First Major Group: Union–Management Relationship and the Control of Conflict Slide 11.6

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A collective agreement defines the terms and conditions of employment for bargaining unit members, but first it must explicitly define what that relationship is in terms of the rights and responsibilities of each party.

In the first part of most collective agreements, we find a group of articles dedicated to defining or outlining: 1) the make-up of the bargaining unit, 2) management rights, 3) union rights and security, and 4) a number of workplace conflict-related clauses.

Management Rights Slide 11.7

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A management rights clause explicitly states that management has the exclusive authority to govern all aspects of the workplace, with the exception of those which are limited by clauses in the collective agreement.  In other words, anything not mentioned in the collective agreement falls within the purview of management to direct as it sees fit.  The view that management retains complete control over all issues not mentioned in the collective agreement is known as the residual rights theory.

There are still critics of the residual rights, but they have not prevailed since arbitrators overwhelmingly rule in support of the residual rights for employers. The lone exceptions are cases where management clearly acted in bad faith or management’s motivation was to subvert the collective bargaining relationship.

Even in situations where a contract does not contain a management rights clause, arbitrators will apply the residual rights doctrine when ruling on disputes.

Two examples of typical management rights clauses are provided in Exhibit 11.5 on page 291. .

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Union Rights and Security Slides 11.8 and 11.9

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Most collective agreements contain a clause that explicitly recognizes the right of the union to represent and bargain on behalf of a defined group of employees called a bargaining unit.

Agreements also contain what are collectively referred to as union security clauses. These deal with membership arrangements, and how dues are collected.

The three most common union membership provisions are: closed shop, union shop, and Rand formula.

In the closed shop arrangement the employer agrees to hire and retain only union members. This kind of provision is common in the construction industry. For instance, if an employer wanted to hire an electrician for the job site, he/she would contact the electricians’ union and one would be referred or recommended.

The closed shop arrangement is found in 7.5% of collective agreements.

The union shop arrangement allows the employer to hire whomever he/she wants, but all workers must become members of the union, usually within a set period of time.

This kind of arrangement is commonly found in the food processing and grocery industry. It is also the most common (33.2%) membership provision found in Canadian collective agreements.

The Rand formula does not impose any membership requirement, but it does require all bargaining unit members to pay union dues. The choice to become a card-carrying union member is left to individuals within the bargaining unit.

This kind of provision is the second-most common (40.7%) type found in Canadian agreements.

Check-off is another other aspect of union security, which refers to the practice of collecting union dues from bargaining unit members.

Check-offs ensure the union receives dues from all bargaining unit members whom they represent, whether they are card-carrying union members or not.

The rationale for check-off provisions is that unless those who are represented by unions are compelled to pay dues, it is likely some (free-riders) would choose not to pay.

Free-riders are bargaining unit members who derive benefits from being represented by the union, but choose not to pay dues. Check-off prevents free-riding.

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Workplace Conflict and the Contract Slide 11.10

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The potential for conflict exists as a result of day-to-day management of work.  Listing all the specific sources of potential conflict in the workplace is impossible. Any factor which impinges on the work relationship can itself be a source of conflict.

This would include interpretation of clauses contained in the collective agreement and even issues not covered by the agreement.  In anticipation of conflict situations many agreements contain provisions (clauses) that allow for the resolution of differences during the life of the contract.

No-strike clauses  No-strike clauses regulate conflict by explicitly prohibiting strikes or lockouts during the term of the agreement. If a serious dispute arises, the parties agree to use the grievance procedure and third-party arbitration to settle their differences.  Most Canadian jurisdictions also prohibit strikes and lockouts while the contract is in effect.

However, mid-contract work stoppages do occur on occasion.  When mid-contract work stoppages occur, no-strike clauses and statutory prohibition can be leveraged to pressure union leaders to encourage their members to return to work.

Grievance arbitration procedures  Grievance arbitration procedures represent another conflict resolution mechanism. These provide a means for the parties to settle differences in the interpretation or application of certain clauses in the collective agreement.  Such procedures typically involve a series of steps leading to the final one, which is third-party arbitration.  At each step, the parties have an opportunity to resolve their differences. At arbitration, a third party hears the competing arguments of both parties and imposes a final and binding decision.  Usually, the third party is a neutral arbitrator who has an arm’s-length relationship to the parties and is trusted by both the union and management to be neutral.  All jurisdictions in Canada require that contracts include a grievance arbitration procedure.

Labour–management committees  Labour–management committees provide a forum for representatives from each party to identify, discuss, and resolve workplace issues. However, these committees are not authorized to bargain over contractual items.  The popularity of these committees has increased dramatically. In the mid-1980s, 38% of major collective agreements provided for labour–management committees. In 2007, that percentage increased to 90%.  While such committees provide an opportunity for the union to influence the way the workplace is managed, it should be noted that management decisions usually prevail.  A collective agreement cannot bind the parties to less than workers would be entitled to under employment standards laws.

Joint-governance agreements  Joint-governance agreements are different from typical collective agreements in that they tend to stay in effect anywhere from four to six years. .

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In exchange for giving management long-term labour peace and the stability that comes with it, unions usually gain greater job security and more involvement in decision-making.

Some joint-governance agreements allow for the equivalent of continuous bargaining by including provisions for mid-term or other periodic amendments, subject to binding arbitration.

These kinds of agreements are prevalent in the wholesale and retail trade, primary industries, and manufacturing. They are also popular in Quebec, where they are also known as social contract agreements.

The Second Major Group: Wage–Effort Bargain Slide 11.11

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Although the employment relationship encompasses much more than a simple exchange of time for money, it remains first and foremost an economic relationship.

The notion of a “fair day’s pay for a fair day’s work” is a popular and practical expression of the wage–effort bargain.

The part of the collective agreement that deals with the wage–effort bargain includes clauses that regulate hours of work, scheduling, compensation, and other incentives.

Hours of Work and Scheduling  In order to frame the wage–effort bargain within a collective agreement it is first necessary to: 1) establish the number of hours bargaining unit members are required to work and when, 2) what constitutes overtime, and 3) provide for various leaves.  In 2007 (see Table 11.1 on page 301), 48% of major agreements defined a standard work week as 35–39 hours. Another 45.8% of major agreements defined a work week as 40 hours. Note the downward trend in the number of agreements that set a 40-hour work week.  Because many Canadian workers do not work a regular Monday to Friday daytime schedule, many collective agreements stipulate what constitutes a work shift.  Any work done over and above the standard work week is deemed to be overtime and may command a premium wage rate.  Most collective agreements include clauses that specify the length and purpose of various leaves, the most common being annual vacations. Some collective agreements provide for other types of leaves such as: education, parental, flex-time, elder care, etc.

Compensation  Once the time (effort) component of the wage–effort bargain has been addressed, the compensation (wage) part of the bargain needs to be agreed upon as well.  Elements of compensation include: 1) the wage structure, 2) wage levels and premiums, 3) performance linkages, and 4) employee benefits.  The wage structure is defined as the pattern of pay differentials between various classifications of workers. Typically, wage structures are fixed and are based on the types of jobs, the length of service, the level of education, or the skills of the employees.  In performance-based wage systems the employees’ wages are variable, and not fixed.  Performance-based pay is usually combined with a traditional wage structure to supplement income in collective agreements.  Examples of performance-based plans include piecework and merit bonuses tied to performance, productivity, or even cost savings.

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Labour unions are reluctant to accept performance-based pay because these systems rely upon the subjectivity of supervisors to determine which employees receive the wage incentives. Less than 10% of collective agreements contain provisions for such plans.

Wage levels refer to the actual amount of pay each employee receives, depending on the wage structure. In some cases, collective agreements incorporate what is known as a two-tiered wage structure.

A two-tiered wage structure pays starting or new employees less than incumbent employees for the same job and classification. Unions see these structures as damaging to the solidarity of the membership because they create two classes of employees. A recent trend involves paying employees lump sum payments, often called “signing bonuses.” These will lower the employer’s labour costs going forward Wage adjustments are most often found in multi-year agreements. An example is a “reopener clause” that allows the parties to renegotiate wages at a particular point during the life of the contract.

Wage adjustments may also take the form of cost-of-living allowance (COLA) clauses, which compensate employees for increases in inflation, thereby maintaining their purchasing power.

Wage premiums such as overtime, shift premiums, call-in pay, and standby pay are ways by which workers’ incomes may be supplemented.

Employee Benefits  For employers, labour costs include more than just wages. In Canada, as much as 30% of labour costs consist of employee benefits. The most common benefits are pension plans and extended health care benefits. The popularity of other types of employee benefits is illustrated in Figure 11.3 on page 306.  In recent years, employers have attempted to reduce the cost of providing benefits by insisting that employees share a higher proportion of the costs.  Another recent trend has been to provide employees with the freedom to choose the benefits that suit them best. These are sometimes referred to as “cafeteria-style benefit” or “flexible” plans.  The issue of responsibility for the administration of pension plans and the disbursement of surplus assets is expected to be a growing source of controversy between unions and management as unionized workers approach retirement.

The Third Major Group: Control of Jobs Slide 11.12

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Clauses dealing with compensation and employee benefits may be the first things that come to mind when one thinks of collective agreements. However, these are of little value without job security.  A third category of clauses found in contracts addresses the concerns employees have about job security and the way in which work is performed.  Such provisions may include restrictions about entering, exiting, and moving within the internal labour market. In addition, many collective agreements include clauses that specify how the work is done and who does the work.

Entering the Internal Labour Market  The control over jobs begins with the hiring process. Some agreements contain language that limit the number and types of workers an employer can hire. .

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An agreement may stipulate the minimum qualifications required or limit the number of workers who can be hired. For example, some agreements limit the number of apprentices (1st, 2nd, 3rd, or 4th-year) that can be hired based on the percentage of journeymen employed.

In the case of closed-shop agreements, the employer may be required to hire only union members for certain types of jobs.

Many collective agreements limit the length of time newly hired employees can remain on probation before becoming permanent workers.

Work Rules  The divergence of interest between workers and management over the control of the workplace extends to issues relating to how the work is performed and how much of it should be done.

Therefore, it is common to find clauses dealing with: 1) the speed of assembly lines, 2) the size of workloads, 3) the number of workers allocated to particular jobs, and 4) what classification of worker may perform certain tasks.  In recent years, the need for management to develop and retain a multi-skilled workforce has given rise to clauses that include incentives and bonuses for workers who complete additional training.

Movement Within the ILM  Issues relating to transfers, secondments, and promotions are important to employees, and as a consequence the way in which such movements are administered is a central feature of agreements.  From a union standpoint, the seniority principle represents the fairest and most objective criterion for managing promotions. On the other hand, management typically views seniority as a poor substitute for merit or competence.  As a compromise, most agreements have clauses that consider a combination of seniority and competence when decisions about promotions are made.  The seniority principle is often applied as a determining factor in other decisions such as who is offered overtime, vacation scheduling, and other benefits.  The use of seniority, which tends to favour longer-term employees, has been criticized by some who claim it contributes to systemic discrimination against women and other members of designated groups who tend to be new entrants to the labour force.

Slide 11.13

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Exiting the ILM & Technological Change  The seniority principle looms prominently when employers wish to reduce their workforce. A little more than 70% of agreements include seniority as one of the factors during layoffs and when employees are recalled from layoffs.  Agreements may also contain “bumping rights,” which allow senior employees to take the jobs of more junior employees when layoffs occur.

The other way employers can reduce their workforce is through contracting-out. This practice involves hiring independent contractors to perform the work previously done in-house by unionized workers, to reduce labour costs.

Unions oppose this practice and have responded by negotiating contracting-out clauses, which restrict or ban this form of workforce reduction. Between 1986 and 2007 such clauses increased from 36.4% to 62.3% in major collective agreements.

Only a few agreements allow for a complete ban on contracting-out. Examples of typical clauses are provided in Exhibit 11.11 on page 314. .

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The introduction of newer technology to increase productivity is another threat to job security for some employees. Unions have attempted to address these concerns. Presently, about 60% of agreements include language that deals with technological change.

In about 40% of agreements, affected employees are provided with either training or retraining when newer technology is introduced.

The Fourth Major Group: Control of Work Behaviours and the Work Environment Slide 11.14

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The last general group of clauses typically found in collective agreements deal with issues arising from the social and physical environment in the workplace.

These clauses can be further subdivided into three general areas: 1) human rights, 2) workplace behaviours, and 3) health and safety.

Human Rights and the Collective Agreement  Human rights legislation exists in all Canadian jurisdictions. These various statutes are described in chapter nine as providing a “floor of rights” for all citizens. As such, unionized and non-unionized employees are automatically protected.

In the late 1990s, about 50% of collective agreements included general non-discriminatory clauses that were either written by the parties themselves or made reference to existing human rights legislation.

About 40% of agreements contained additional rights targeting specific groups, such as disabled workers.

Clauses that try to address issues of sexual and general harassment are also found in some agreements.

Although not as widespread, it is expected more agreements will contain clauses dealing with privacy, surveillance, drug testing, and other forms of medical screening tests in the future.

Behaviour and Discipline at Work  Management has an interest in developing and enforcing rules that serve to regulate the behaviour of employees. These rules may be in place to provide a safer work environment, maximize production, etc. Most agreements require that the employer have “just cause” if discipline is handed out.  Unions, in general, prefer not to suggest or agree to specific disciplinary actions in collective agreements. This allows them to preserve their right to grieve the reasonableness of disciplinary measures.  Many collective agreements include procedural limitations with respect to discipline. For example, employees may be given the right to union representation at disciplinary meetings. In other cases, there may be a “sunset clause” that allows the employee’s disciplinary record to be expunged after a certain period of time.  Exhibit 11.14 on page 317 provides an example of how progressive discipline may be applied to control absenteeism.

Health and Safety  As discussed in Chapter 9, most Canadian jurisdictions have legislation that mandates occupational health-and-safety (OHS) committees in the workplace. Nonetheless, many collective agreements include provisions which deal with OHS concerns. .

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Although by law employees have the right to refuse unsafe work, having such rights enshrined in the agreement allows the union to use the grievance and arbitration process to protect those rights.

Other clauses in the agreement may oblige the employer to provide or pay for safety equipment, ergonomic office equipment, etc.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. Provisions in human rights legislation, occupational health-and-safety acts, and employment standards laws, which are binding on unionized employees, are often explicitly cited in collective agreements, even though this is not necessary. What three reasons do the authors give to explain why this is done? 1) It is a good way to educate all the parties about their rights and obligations, 2) the parties can specify the manner in which the legal requirements might best fit their situation, and 3) including it in the collective agreement allows access to the grievance procedure, which may be a speedier way to settle problems. (p. 286)

2. What four major groups of clauses are commonly found in collective agreements? 1) The union–management relationship, 2) the wage–effort bargain, 3) control of jobs and work, and 4) behaviour and work environment. (pp. 287–289) 3. Explain the residual rights theory. This is a traditional view that management retains control over everything that is not explicitly addressed in the collective agreement. (p. 290) 4. Are there any limitations placed upon management when they exercise residual rights? Yes, two. If it can be shown management acted in bad faith or an arbitrary manner, or were motivated by a desire to subvert the collective bargaining relationship. (p. 290) 5. Summarize the position of critics of the residual rights theory. (pp. 290, 292) 6. If no management-rights clause was included in a collective agreement, the residual rights approach is so well entrenched that arbitrators would still apply it nonetheless. If this is the case, then why do the parties bother to include this clause in collective agreements? (p. 292) 7. List and explain the three most common union security clauses found in Canadian collective agreements. Union shop, closed shop, and Rand formula. (p. 295) 8. Explain how it is possible for workers to be represented by a union and pay union dues without necessarily being union members. Under the Rand formula, bargaining unit members need not become card-carrying union members, but they are compelled to pay union dues. (pp. 292– 296) 9. Define the term “free-rider” and the position of unions regarding this issue. How does the Rand formula discourage free-riders? (p. 296) 10. In what way(s) do no-strike clauses help minimize and regulate conflicts in the workplace? (pp. 296–297) 11. What purpose does the grievance arbitration procedure serve? (p. 297) 12. Establishing a labour–management committee is an excellent way to increase communication and understanding between the parties. However, what are the two most significant limitations of these types of committees? 1) They do not have the authority to negotiate over contractual issues, and 2) in the absence of mutual agreement, management decisions still prevail. (p. 298) .

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13. Describe the major differences between typical collective agreements and joint-governance agreements. (p. 298) 14. According to the authors, what is the approximate percentage of Canadian workers who do not work a regular Monday–Friday daytime schedule? 40% (p. 299) 15. Most major agreements do not give unionized workers the right to refuse overtime when it is offered to them. Is this true or false? True (p. 300) 16. In some two-tiered wage structures, management can pay a new employee lower starting wages and the differential remains permanent for as long as the employee remains with the firm. Discuss why unions are generally opposed to such arrangements. (p. 304) 17. Explain cost-of-living adjustment (COLA) clauses and the purpose they serve. (p. 305) 18. Why do unions generally prefer that seniority be used to guide decisions affecting promotions and layoffs? (pp. 310–311) 19. Why do managers typically oppose using the principle of seniority when making decisions about promotions and layoffs? (p. 311) 20. In what way(s) can the application of the seniority principle inadvertently serve as a mechanism of systemic discrimination? (p. 312) 21. In some cases, collective agreements provide what is called “bumping rights” to unionized workers. What are they and how do they work? (pp. 312–313) 22. What are contracting-out clauses and why have such provisions increased so dramatically in major collective agreements? (p. 313) 23. Discuss why unions are reluctant to incorporate specific rules and remedies that deal with employee discipline in collective agreements. (p. 317)

Beyond-the-text questions Read the opening vignette at the beginning of the chapter on page 283 and answer the following questions: 24. Provide an update on the developments affecting the Air Canada restructuring plan, with particular focus on its continuing negotiations with the Canadian Auto Workers. How does the outcome of your update support or contradict the statements and opinions in the vignette?

25. Summarize the arguments for and against the residual-rights theory of management prerogatives. Do you support the residual rights theory? If so, why; if no, why not? How have unions limited this management right in collective agreements?

26. Your friend, who is a member in the same union as you, says he made plans after his shift to attend an important meeting. However, he has been asked (ordered) to work overtime tonight.

He has tried to explain his situation, but the supervisor insists that overtime is required. He tells you that he is thinking of walking out of the plant, at the end of work, to keep his appointment regardless of what the supervisor said. You have checked the collective agreement, but it is silent on this issue. What advice would you give your friend and why? .

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Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

27. The issue of pension plans, specifically the disbursement and ownership of surplus assets, is sure to be a growing source of controversy in the future. In plans that set out specific benefits upon retirement (i.e., defined pension plans), it is common for employers who manage these funds to realize additional gains beyond what is required to support the plan. In your opinion, what should be done to resolve the differing position of the union and management regarding this issue? Provide support for your opinion.

28. Some agreements, such as the one between Canada Post and its employees, limit the right of management to use surveillance in order to evaluate employee performance. To what extent should surveillance of employees be used, if at all? In other words, at which point would you consider surveillance to be an infringement on an employee’s individual right to privacy?

29. Do you believe management should have the unfettered right to ask their employees to undergo AIDS, drugs, or genetic testing? Under what conditions might it be acceptable?

Under what conditions might it be unacceptable?

Class activities 1. Collective agreement clauses As a suggestion, instructors may consider providing students with actual collective agreements and asking them to find particular clauses and compare these with examples provided in the chapter. See the sample below which deals with management rights clauses (Exhibit 11.5). The same can be done for union-security clauses (Exhibit 11.6), seniority clauses (Exhibit 11.10), and contracting-out clauses (Exhibit 11.1).

It is also instructive to ask students to look for clauses that may not appear in the sample collective agreement. This reinforces the notion that collective agreements, while sharing many common features, are customized to suit the wishes of the parties.

An alternative question would ask students to describe selected memorandums and addendums and speculate as to why they were added.

Sample Exercise—Management Rights Clause Part 1: Instructor: In the agreement you have been provided with, where would you find the management rights clause?

Part 2 Instructor: Read the two samples provided in Exhibit 11.5 on page 291. How does the clause in your collective agreement compare? Would you say it is general in nature or detailed? How different is it?

2. Fine Family Foods collective bargaining simulation This completely self-contained bargaining simulation is provided in Appendix A. .

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Chapter 12

Strikes and Dispute Resolution Chapter Overview Strikes are of particular interest to a wide range of individuals working in a variety of disciplines, in large part because of the perceived effect of strikes on the actors (unions, workers, management, and government) and society. The information provided in this chapter helps dispel many of the myths surrounding strikes. For example, we learn there are different kinds of strikes, which occur under different conditions and for different reasons, and which serve different purposes. As such, their effects on various stakeholders are equally varied, as is apparent in the opening vignette.

This chapter is the third in a series of four, which deal with the interaction of the parties, or the conversion process as it is referred to in the simplified model of the industrial relations system. In the first part of the chapter, we define what strikes are and discuss some of their functions. Next, some theories that explain the causes of strikes are explored. From there, the focus moves on to various economic and non-economic determinants or causes of strikes.

The second part introduces the essential components of strikes (frequency, size, and duration) and describes each one individually and in combination with the other. Strike activity statistics by industry and by province are examined, as well as some historical Canadian trends. Also, strikes are categorized and explained according to contract status, and the conditions under which they occur are identified. The last section in this part of the chapter outlines the role of various dispute resolution procedures and the effect of each on minimizing strike activity.

The chapter closes with a thumbnail sketch of both positive and negative consequences of strikes based on available empirical evidence. What is made clear is that much misinformation exists surrounding the causes and effects of strikes. Indeed, while various explanations abound, strikes remain somewhat of a mystery because they seem to resist generalization. In other words, there seem to be exceptions to every general rule.

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Lecture Outline and PowerPoint Slides The Conversion Process/Interaction Slides 12.1, 12.2, and 12.3 Chapter 12: Strikes and Dispute Resolution  In this chapter, we continue our exploration of the mechanism for converting inputs to outputs, which was started in chapter ten.  The focus now is on two distinct yet interrelated activities: strikes and dispute resolution procedures.  While strikes and lockouts both result in a cessation of work, they are different in that one is initiated by workers (strike) and the other by management (lockout).  There are different kinds of strikes. They occur for varying reasons and serve various purposes.  A strike is one of the most visible aspects of the interaction which exists between union and management.

It is both an outcome and an integral component of the conversion process.  Today, more than 90% of the time, workers vote not to strike.

Functions and Causes of Strikes Slide 12.4

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Functions of Strikes  Because of their costs (economic and non-economic), strikes are not the preferred course of action for the actors in the industrial relations system (unions, workers, management, and governments). Ideally they would much prefer to use persuasive arguments (negotiations) to attain their respective goals.  However, when persuasive arguments are not enough to gain concessions from the other party, a strike may be viewed as necessary to achieve one’s goals.

Strikes are essentially forums where the competing pressures of workers and management are played out. In the private sector, the lost income for workers is pitted against the loss of profit for the company. .

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Strikes are most often discussed in terms of their dysfunctional effects. In doing so many overlook the variety of functions or purposes that strikes serve.

For example, a strike can be used to: 1) win recognition for or support of a union’s bargaining demand, 2) help reveal the other party’s true settlement point(s), 3) establish individuals’ reputations, 4) put pressure on both parties to make concessions, 5) solve intra-organizational differences in bargaining positions, 6) provide an avenue for workers to express themselves and serve as a cathartic event that releases pent-up frustration, 7) support or protest government policy, 8) enhance political consciousness, and 9) show solidarity for striking workers elsewhere.

Strikes can occur over any issues that bargaining unit members deem important. Typically, they are issues relating to job security or ones that have an economic component attached.

Theoretical Determinants of Strikes Slide 12.5

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There is no single and unique determinant that explains why strikes occur. Strikes result from a complex and dynamic mix of variables found in the social, political, and legal environment within which the parties operate.

However, three distinct perspectives have emerged which attempt to link strikes with observable variables that appear to be determinants of strike.

Differing Bases for Offers and Demands  This perspective assumes that strikes occur because the parties approach the bargaining process from two distinct frames of reference, which in turn affects what they are likely to demand or offer.  According to this view, unions base their demands on current or lagging indicators, such as employment and the consumer price index (CPI). On the other hand, management base their offers and demands on product pricing, market share, and expected profits.

Asymmetric-Information Perspective  This second perspective views strikes as way for unions to gather information about the true financial situation of the employer.  It is theorized that strikes occur because the union lacks the essential financial information it requires to accept management’s offer. In effect, management has access to more financial information, which they withhold from the union. Therefore, the only way the union can uncover this information is by striking, thereby revealing the true state of the company’s finances.

Joint-Cost Perspective  A third perspective argues the likelihood of strikes occurring is dependent on the joint cost to the parties of using this route relative to other means for solving bargaining disputes.  The theory predicts that where the total cost of a strike is high compared to other solutions, such as making concessions, a strike is less likely to occur.  In the case where the cost would be low for only one party, then the other side would compensate or “bribe” them not to strike by offering concessions.  The joint-cost perspective does not predict whether the union would engage in a strike or not, but rather if both parties would likely endure or resort to one based on its cost. .

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Economic Determinants of Strikes Slide 12.6

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The interdisciplinary nature of industrial relations is reflected in the way strike determinants are categorized.

Economists typically focus on economic factors; sociologists emphasize social changes and developments, which contribute to class conflict; and industrial relations analysts point to dispute resolution procedures, characteristics of the actors, the bargaining structure, etc.

It is important to realize that the following determinants are interdependent and overlapping, even though they have been classified into economic and non-economic categories.

Business Cycles and Strike Cycles  Early studies focused on the relationship between strikes and business cycles. The theory was that strike activity is highest during peak business cycles, when unemployment is low and profits are high.  Most of the studies found a positive relationship between strike activity and the business cycle. However, these do not explain why settlements would not also be higher during such periods.

Recent Time Patterns of Aggregate Strike Activity  Recent studies are more rigorous than previous ones, as they attempt to link various measures of aggregate strike activity with a variety of variables that measure aggregate business conditions.  These recent studies generally indicate that economic factors are important determinants of strike activity. Specifically, that strike activity is higher during periods of high inflation and lower when unemployment is high.  The predictive value of the relationship is highest for contract-renewal type strikes, and lowest for mid-contract type strikes.  Cross-section studies that attempt to test the importance of economic factors in relation to strike activity seem to indicate strike activity is dominated more by non-economic factors.

Hazard Estimates of Strike Duration  Some studies analyze strike duration by looking at the probabilities of settlement as the strike progresses (hazard rate).  Evidence from these types of studies suggests there is an inverse relationship between duration of strikes and business cycles, and a positive relationship between strike incidence and business cycle.

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Non-economic Determinants of Strikes Slide 12.7

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As discussed in chapter 11, the employment relationship is primarily an economic relationship. Therefore, an argument could be made that even so-called noneconomic factors have economic dimensions attached.

Many studies try to link non-economic determinants to strike activity by focusing on behavioural, organizational, or political factors. The following is a sample of six determinants that are frequently used.

Worker and Community Characteristics  A strike represents collective action on a social level, which is of interest to sociologists. The question they pose is: What characteristics in the union and the community would predispose bargaining unit members to strike?  Sociologists theorize that the likelihood of strikes occurring is greater where unions have the strength and resources necessary to mobilize workers to act collectively.  This ability to mobilize workers is related to many factors including: male dominance of the industry; personal characteristics; characteristics of the community; plant size; and very likely the financial resources of the union as well.

Frustrated Expectations and Collective Action  Some have proposed that strikes result from the frustration of workers caused by the differences between their expectations and their economic and social circumstances.  When a critical mass of workers feel similarly frustrated and other preconditions are present, then collective action such as a strike ensues.  Others suggest that strikes are important means through which workers express a collective voice, and that strike activity is therefore more likely in workplaces where there is a lack of autonomy and where workers experience a sense of alienation.

Political Environment  Studies suggest strike activity decreases in an anti-labour political and legislative environment.

However, it is unclear whether strike activity increases or decreases in pro-labour political environments.  In Canada and in the US, there is evidence that strike activity tends to increase in pro-labour legislative environments, but this has not been the case internationally, where it tends to decrease in similar conditions.

Negotiator and Bargaining Process Characteristics  Union and Management Trust or Hostility o The interpersonal aspects of collective bargaining cannot be overlooked. o In instances where there is a lack of respect, civility, or trust between the negotiators, it is likely to increase the probability of a strike.  Negotiator Skills and Experience o Hicks suggests that most strikes essentially result from faulty negotiating. While this assumption is debatable, it is undoubtedly correct in some instances. o Inexperienced negotiators, on one or both sides, may unwittingly send contradictory signals or make contradictory statements during bargaining, which serve to impede negotiations.

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Bargaining History  Because the union–management relationship is typically a long-term one in most workplaces, the effect of previous negotiations may affect ongoing negotiations.  The present state of union–management relations at a particular worksite should be viewed from a historical context.  Evidence from Canadian studies indicates that long strikes have a sobering, “teetotaller effect” on subsequent rounds of negotiations. On the other hand, short strikes that leave unresolved issues tend to lead to more strikes in the future.

Union & Management Organizational Characteristics Slide 12.8

Intra-Organizational Conflict  Within the union’s and the management’s respective sides, the diversity of ideologies sometimes give rise to conflicts between moderates and militants, or between the union leadership and the membership.  The potential for strikes may increase due to union members not agreeing among themselves about the acceptability of management’s offer.  On the management side, it is not unusual for disagreements to occur between line and staff managers, or between managers at different hierarchical levels regarding priorities, negotiation strategies, or costing assumptions.

Inadequate Decision-Making Authority  In situations where the union perceives it is negotiating with management messengers instead of decision makers, strikes are more likely to occur.  Union leaders may strategize that the only way to get the attention of real decision makers is to go on strike.  Dealing with intermediaries (management messengers) increases the likelihood of misunderstandings, miscommunication, and unrealistic expectations occurring on both sides.

Foreign Ownership and Multinationals  Studies have been conducted to determine whether foreign ownership predisposes a firm to strikes. However, Canadian studies have produced mixed results. The difficulty associated with such studies may be due to the extensive bargaining power of multinationals relative to unions. For example, if faced with a strike large firms have the ability to shift production to other facilities to compensate.

Size and Number of the Bargaining Units  The research question that has been posed is: Does the presence of many bargaining units or the size of the membership decrease the likelihood of strike activity?  Empirical evidence suggests that strikes are less likely to occur in single-plant bargaining units with fewer union members.

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Measuring Strike Activity Slide 12.9

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Gathering and analyzing strike statistics is difficult because of the following problems: 1) how strikes are counted and measured (in Canada, strikes of less than 10 days are excluded and in the US only strikes involving 1,000 or more workers are counted), 2) the way political strikes and protests are treated, and 3) determining when extended strikes actually end.  Canada publishes strikes statistics in three forms: 1) frequency, 2) the total number of workers involved, and 3) the total number of days lost (duration).

Multiplying frequency, duration, and number of workers involved yields total person-days lost, from which strikes as a%age of working time can be derived.

In Canada, strike activity is volatile. High strike activity was experienced in 1919, 1946, and 1975. Whereas the years of 1927, 1930, and 1938–1945 were characterized by low strike activity.

In general, in periods of recession and economic slowdowns, strike activity drops.

Since the 1980s, strike frequency has been declining in Canada with the exception of 1996 and 1997 when large and long-lasting strikes occurred in Ontario.

The decline in strike activity has been more pronounced in the private sector than in the public sector.

The reduction in strike activity has also been observed internationally.

Components of Strike Activity  The three basic components of strike activity are: 1) duration, 2) frequency, and 3) size. Size refers to the number of workers involved.  As illustrated in Table 12.1 on pages 340–342, it is possible to manipulate these three basic components to determine the average number of workers involved and the average duration of each strike.  Total person days lost divided by the number of workers involved yields the average duration of strikes. On average, strikes declined to 13.8 days in the 1990s. This has been accompanied by a decline in frequency as well.

Slide 12.10

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Strike Duration—An Alternative Interpretation  While the average length of strikes has declined in the 1990s and the beginning of the 21st century, based on the previous formula (total person days lost/ number of workers involved), it is possible to show an increase in duration of strikes using an alternate formula.  The problem with the previous formula is that infrequent, large, short strikes can skew the average. One way to control for this is by dividing days lost by the frequency of strikes. This results in data that is more meaningful to individual workers and managers.

This alternate interpretation indicates that strikes have in fact been getting longer. The duration of strikes has increased from 35.7 days in the 1970s to 49.9 in the 1980s, 60.6 days in the 1990s, and finally 60.1 days from 2000 to 2006.

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Contract Status at Time of Strike  Strikes happen for different reasons, serve different purposes, have various effects, and occur at different times. The determinants of strikes vary depending on the type of strike.  Strikes may be classified according to when they happen.

The three kinds of strikes are: 1) first-contract, or recognition, 2) mid-contract, and 3) contract-renewal.  First-contract or recognition strikes occur soon after certification, when the union is trying to negotiate the first collective agreement. Between 1986 and 2002, these account for 14.2% of all strikes.

First-contract strikes may result from the inexperience of either or both parties. They may also be a product of bitterness or other difficulties encountered during union-organizing campaigns.

Contract-renewal strikes occur over the renegotiation of an existing collective agreement that has expired. This type accounts for 77.5% of all strikes.

Mid-contract strikes, which are illegal in all jurisdictions except Saskatchewan, account for 6.2% of all strikes. These kinds of strikes typically occur because of particular work situations and may be symptomatic of pent-up frustrations among workers. In some instances, midcontract strikes may also reflect the membership’s discontent over the contract negotiated by their union.

Industry and Regional Variations  By sector, manufacturing, construction, and information and culture are the most strike-prone.

However, the most strike prone sector of the economy overall is public administration.  The least strike-prone industries are finance, real estate, management services, wholesale/retail, and entertainment/hospitality.  The provinces with the highest volume of strike activity have been Newfoundland and Labrador, Quebec, and British Columbia, and this may be due to the high concentration of primary industries found in these regions. However, in the recent past, these provinces have seen deceases in strike activity.

Strike Rates and Settlement Stages  In the public sector between 1990 and 1998 the parties negotiated collective agreements by themselves or with the help of mediators about 70% of the time. In contrast, during the same period, the parties in the private sector settled about 88 % of the time.  In the period between 1990 and 1998, 9.5% of collective agreements in the private sector were settled following a strike, whereas in the public sector this occurred about 3% of the time.  While governments have the power to do so, they are reluctant to legislate private-sector workers back to work. On the other hand, they are more willing to do it when it involves public-sector workers.  The use of third-party arbitration to settle negotiation disputes is rare in the private sector (1.6%) compared to the public sector, where it occurs about 4.2% of the time.

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Summary of Canadian Strike Activity Slide 12.12

Volatile Strike Activity  Canada has experienced wide fluctuation in various components of strike activity from the mid-1960s to the early 2000s.

First-Contract Strikes  Although these types of strikes occur quite often, they do not contribute significantly to the total person-days lost because they do not involve many workers.

Public-Sector Strike Activity  In the private sector, about 90% of agreements are settled without strikes, while in the public sector that figure is about 70%.

Industry and Regional Variations  Substantial industry and regional variations in strike activity exist in Canada. Newfoundland and Labrador, Quebec, and British Columbia are the most strike-prone provinces, but this may be due to the fact that these provinces have a high concentration of primary industries that are also more strike-prone than other industries, such as agriculture, finance, trades, and services.

Dispute Resolution Procedures Slide 12.13

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All 11 Canadian jurisdictions have a variety of dispute resolution procedures that typically involve the use of third-party neutrals. These procedures vary according to the level of intervention and intended purpose.

The most common forms of third-party interventions are: compulsory conciliation, mediation, fact-finding, and arbitration.

Compulsory Conciliation  This procedure is also called compulsory mediation. It is a requisite step prior to a legal strike taking place.  Submitting to compulsory conciliation or mediation is mandatory in Alberta, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador, but not in other jurisdictions.  Upon request by either party or by order of the minister, a government conciliator is appointed to assist the parties. The conciliator meets with the parties and reports to the minister of labour on the possibilities of a resolution. The parties are not compelled to act on the findings in the report.  In some jurisdictions, when conciliation has not yielded a resolution, the matter is referred to a conciliation board, which also investigates and reports to the minister.  In some jurisdictions, a mandated “cooling-off” period, usually 7 or 14 days, follows after the report has been filed. When this period expires, the parties can obtain the right to carry out a strike (union) or lockout (management). .

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Mediation  While the terms conciliation and mediation are often used interchangeably, mediation is typically voluntary. However, in some respects, the mediation is more interventionist than conciliation.  A mediator not only gathers information but suggests compromises, proposals, and possible settlement terms to the parties.  As with conciliations, the parties are not compelled to act on the mediator’s recommendations.

Fact-finding  This procedure is more formal than mediation and is usually conducted by conciliation boards.  The procedure involves the union and management submitting briefs and presenting their views at a formal hearing.  The parties are free to accept or reject the recommendations of the fact-finder.

Interest Arbitration  This process involves the imposition of terms and conditions in a collective agreement, which is binding on the union and management. As such, interest arbitration represents the strongest form of third-party intervention.  Interest arbitration substitutes for strikes and is compulsory when specified groups of workers are prohibited from striking.  In some rare instances, the parties may voluntarily choose to submit to interest arbitrations, even when they have the legal right to strike/lockout.  In the traditional form of interest arbitration the arbitrator is given the latitude to accept the position of either party or fashion his own solution somewhere in between.  For final-offer selection (FOS) type interest arbitration, the arbitrator must completely accept either the union’s position or that of management. The rationale for FOS is that parties are more likely to compromise and seek their own solutions rather than risk losing everything at arbitration.  Final-offer selection interest arbitration tends to be rejected by all parties in Canada, including arbitrators.  Traditional interest arbitration has been found to produce a “chilling effect,” which is the tendency of the parties to hold back concessions during bargaining hoping the arbitrator will split the difference.  Interest arbitration has also been criticized for producing a “narcotic effect.” This occurs when the parties develop a dependency on the process rather than solving bargaining difficulties by themselves.  Evidence indicates that where interest arbitration is mandated, it leads to lower rates of negotiated settlements than in systems where the parties are allowed to strike. This would seem to substantiate the existence of the “narcotic effect.”

Social Contracts  In Quebec, these agreements are encouraged and have been used in strike-prone industries like pulp and paper and steel. Such contracts involve all the social partners (labour, management, and government).  Social contract agreements are signed for extended periods beyond three years, and typically include provisions for wage arbitration after three years.  The rationale for signing social contracts is that in exchange for labour peace (no strikes during the term of the contract), unions gain added job security and a promise of continued investment in the plant.  In Quebec, the government’s involvement extends to assisting with investments in the plant and facilitating the negotiation of social contracts. .

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Other Forms of Dispute Resolution  In the Canadian public sector, governments do occasionally pass back-to-work legislation to end strikes and compel the parties back to the bargaining table.  Although back-to-work legislation can also be passed to resolve private-sector strikes, this is rarely done.

Effect of Dispute Resolution Slide 12.14

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The few studies that have been conducted in this area have found that laws and policies geared toward discouraging strikes, by making them more costly or difficult, tend to reduce strike activity.

Other empirical studies have found that prohibitions and penalties deter public-sector strike activity.

Labour Relations Policy Variables Slide 12.15

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The probability of strike activity can increase as well as decrease depending on the specific variables involved.  Using compulsory conciliation officers and boards reduces the probability of strike activity by 12.8%.  Requiring a mandatory strike vote reduces the probability of strike activity by 11.1% and reduces the duration of strikes by 7.4 days  Legislation prohibiting the use of replacement workers (anti-scab legislation) increases strike incidences by 24.4% and increases the length of strikes by 6.9 days. It is theorized that such legislation makes strikes a more attractive weapon for unions.

Consequences of Strike Activity Slide 12.16

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Strikes are of interest primarily because of their effect on workers, management, and society. Yet, little rigorous statistical analysis of strikes has been done to date.  In terms of their effect on wages, Canadian studies suggest that the cost of strikes (lost wages) for workers is outweighed by the gains, but only for short strikes.  Empirical studies tend to focus on the private sector, where the profit motive serves as an incentive to settle.  Some of the notable effects of strikes that have been reported in studies include: 1) reductions in the stock-market value of the firm being struck, 2) increases in the stock-market value of non-striking competing firms, 3) negative psychological impact on striking workers, 4) increases in workplace injuries, 5) increases in community support for strikes, and 6) mixed effects on productivity. .

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. How does a strike differ from a lockout? A lockout is initiated by the employer and results in cessation of work by bargaining-unit employees. On the other hand, a strike is a concerted effort by unionized workers to refuse to work and/or cause a slowdown of work to restrict production. (p.324) 2. Strikes occur for varying reasons and are disruptive. However, they also have several benefits.

What are at least two benefits of strikes? 1) They help reveal information on the other party’s true settlement points, 2) they pressure both sides to make concessions, 3) they serve as a safety valve for pent-up frustrations, 4) they can be used to show support for other workers’ causes elsewhere. (p.323) 3. Discuss the merits of the following statement: The decision to strike is a democratic one, whereas the management decision to lockout employees is not. (p. 324) 4. According to your text, what is the likelihood of workers choosing to strike when a vote is held? Less than 10%. More than 90% of the time they choose not to strike. (p. 324) 5. What is a “wildcat strike?” It is an illegal strike, which is typically not officially sanctioned by the union. (p. 326) 6. According to the text, what are the two most common issues over which strikes occur?

1) Wages or other economic issues and 2) job security. (p. 326) 7. Explain the basic premise of the asymmetric-information perspective to rationalize the existence of strikes. (pp. 329–330) 8. How does the joint-cost perspective help explain the cause of strikes? (p. 330)

9. Basing your answers on empirical evidence, would you expect strike activity to increase or decrease: a) at the peak of a business cycle? Increase (p. 332) b) in periods of high unemployment? Decrease (p. 332) 10. Discuss how a pro-labour and an anti-labour political environment affect strike activity in North America. Strike activity increases in pro-labour environments and decreases in antilabour environments. (p. 335) 11. In what way can intra-organizational conflict contribute to the probability of strike activity? (pp. 335–336) 12. The bargaining history of the parties is an important non-economic determinant of strikes.

Canadian evidence suggests that under certain conditions the parties experience what is called a “teetotaller effect.” Explain what this effect is and the conditions necessary to produce it. (pp. 337–338)

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13. Is the following statement true or false? In Canada, a strike that lasts a total of nine days would not be recorded in official government strike statistics. True (p. 338) 14. What are the three general components of strike statistics? 1) frequency, 2) size, 3) duration (p. 339) 15. How are total person-days lost due to strikes calculated? Multiply frequency, size, and duration together. (p. 339)

16. One common method for determining the average length of strikes is dividing total person days lost by the number of workers involved. An alternative method divides total days lost by the number of strikes. Discuss the implications associated with each method of calculation. For the two calculations above, what do the results of each method tell us about recent trends in strike duration? (pp. 343–344) 17. Describe the three different kinds of strikes and the conditions under which they occur. (p. 345) 18. In which jurisdiction (province) are mid-contract strikes not illegal? Saskatchewan. (p. 345) 19. According to the text, what may be the underlying causes of first-contract strikes?

Inexperience of either party and continuation of the bitterness associated with the unionorganizing efforts. (p. 346) 20. Which Canadian industries are considered strike-prone? (p.346) 21. Which three provinces have typically been the most strike-prone? And why? British Columbia, Quebec, and Newfoundland and Labrador. It may be due to the high concentration of primary industries in these provinces and their relatively pro-labour political environments. (p. 346) 22. What is the approximate percentage of successful contract negotiations in the private sector? That is, the percentage of collective agreements which get settled without strikes or lockouts. About 90% (p. 349) What is the corresponding percentage in the public sector?

About 70% (p. 349) 23. Describe four main dispute resolution procedures. (p. 350–352) 24. Suppose you worked in a jurisdiction where compulsory mediation is not required before a strike can occur. Do you think it would be a good idea to follow the example of Alberta and make it mandatory? Why or why not? Clearly it is a good idea. Evidence suggests that such a step reduces the probability of strikes by 7.9%. (p. 354) 25. What is the difference between conciliation and mediation? (p. 350) 26. Explain what interest arbitration is and when it is used. (pp. 350–351). Describe the two main forms of interest arbitration. (p. 351) 27. Discuss the implications of both the “chilling effect” and the “narcotic effect” as they pertain to interest arbitration. (p. 352)

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28. According to econometric study results discussed in your text, what is the effect of legislation prohibiting the use of replacement workers on the probability of strike activity?

It increases the likelihood of strikes occurring by 24.4%. (p. 355) 29. Which labour-relations policy variable was found to be the most effective for reducing the probability of strike activity? Conciliation officer and board reduced the likelihood of a strike by 12.8%. (p. 354)

Beyond-the-text questions 30. Read the opening vignette at the beginning of the chapter on page 322 and answer the following question: The closing of the Maple Leaf meat plant in Edmonton illustrates the real-world relevance of the asymmetric information theory of strikes. If the union leaders (also UFCW) at Maple Leaf’s Brandon plant had “insider” information about the probability of the Edmonton plant closure and had shared it with the Edmonton union leaders, what do you think the outcome would have been? Did the UFCW executives in Brandon have such information?

31. Which Canadian jurisdictions require a “cooling-off” period prior to a strike taking place?

32. Which Canadian jurisdiction provides first-agreement arbitration for newly certified unions?

33. Using the joint-cost perspective to justify your answer, how would you expect strike activity to be affected by increased international trade liberalization (globalization)?

Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

34. “Unequal bargaining power on the part of one of the parties in the negotiation process has implications for wage determination, not for strikes.” Discuss.

35. According to Hicks, “the majority of actual strikes are doubtless the result of faulty negotiation.” Using the material in this chapter, do you agree with Hicks’ statement? If so, why; if no, why not?

36. Discuss the merits of the following statement found in your text: “If strikes and their outcomes were completely predictable they would serve little purpose.”

37. Create a scenario to illustrate how a union could use a strike mandate as a bluff during bargaining.

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Chapter 13

The Grievance Arbitration Process and Workplace Conflict Resolution Chapter Overview Much like collective bargaining, the grievance arbitration process plays a central part in the union– management relationship. It is an essential part of the interaction or conversion process in the model of the industrial relations system. This process allows the parties to resolve disputes over the interpretation and application of the collective agreement while it is in force, without resorting to strikes or lockouts.

This chapter is the last in a series of four chapters which focus on the interaction of the parties. It begins with a vignette that describes how traditional grievance resolution methods are being replaced or amended by mediation and conflict resolution. A brief section deals with some basic terminology along with general observations about the secondary role that grievances serve in the workplace.

The first part of the chapter focuses on answering essential questions relating to the grievance arbitration process. These answers help provide a more complete appreciation of what the process entails. In this section we learn among other things: 1) who files grievances and why, 2) how grievances affect organizational performance, 3) what the different kinds of grievances are, 4) some of the criticisms of the grievance arbitration process, and 5) who the arbitrators are.

Having learned the basics of the grievance arbitration process, the chapter moves toward an exploration of the various remedies and awards of arbitrators. The role of the courts vis-à-vis arbitrators’ orders is discussed, as are concepts such as judicial deference and judicial review. What follows is an interesting review of empirical research on grievance outcomes based on the characteristics of arbitrators, grievance types, and grievors.

The chapter closes with an exploration of some alternative resolution procedures, such as expedited arbitration and grievance mediation. Lastly, the chapter takes a brief look at formal dispute resolution procedures in non-union firms.

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Lecture Outline and PowerPoint Slides The Conversion Process/Interaction Slides 13.1, 13.2, 13.3, and 13.4

Chapter 13: The Grievance Arbitration Process and Workplace Conflict Resolution  All Canadian jurisdictions (except Saskatchewan) prohibit strikes and lockouts during the term of the collective agreement. It is inevitable, given the nature of the employment relationship, that occasional disputes will arise while the contract is in effect.  The grievance arbitration process allows for workplacerelated disputes between union members and management to be resolved without using the strike or lockout options.  Grievances are disputes. Usually, they are filed by unions over the interpretation or alleged violation of the agreement. Management may file grievances as well.  Collective agreements include grievance procedures that contain a series of steps, each of which provide an opportunity for resolving the grievance. If, at the last step, the grievance is not resolved, it is referred to a neutral third-party called an arbitrator. The arbitrator’s ruling is final and binding on both parties.  The grievance arbitration process was originally intended as a fair, fast, and inexpensive way to resolve disputes between unions and management. While many argue that these goals have been met, there is room for improvement. An Ontario study found that, although 75% of respondents perceived the arbitration process to be fair, a majority reported that the process was too slow and half reported that it was too costly.  In contrast to interest arbitration, which results in a new collective agreement, grievance or rights arbitration results in a ruling on a dispute over the interpretation, application, or scope of an existing agreement.  Although interest arbitration can be chosen voluntarily to settle a contract settlement dispute, in most cases it is imposed on the parties after a lengthy or controversial set of unsuccessful negotiations.

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The Grievance Arbitration Process Slide 13.5

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Who Files Grievances and Why?  There is a tendency for the uninitiated to assume that once a collective agreement is signed all parties will abide by its conditions. This is not always the case. For a variety of reasons, either wilful or unintentional, sometimes violations of the collective agreement occur.  The number of grievances filed (grievance rate) in a particular workplace serves as barometer of the labour relations climate. For example, it may signal the need for improved managerial competence or better training for union representatives.

Several studies suggest that workers who file grievances are more likely to experience retaliation from employers as compared to non-grievors.

In another study it was found that in the “pre-grievance” period, grievors had higher promotion and attendance rates than non-grievors. However, afterwards grievors received lower performance ratings, received fewer promotions, and had higher termination rates. Interestingly, supervisors of grievors also received lower performance ratings.

Grievances, Conflict, and Organizational Performance  It is generally accepted that the grievance rate is a reasonable measure of a firm’s underlying labour climate.  While high grievance rates could reflect a union’s domination of the workplace, it is equally likely to be symptomatic of poor management practices.  Most grievances are resolved before the arbitration stage. The factors associated with early resolution (prior to arbitration) of grievances are: 1) co-operative bargaining relationships, 2) willingness to learn from previous grievances, 3) experienced first-line managers, and 4) the exclusion of lawyers from the process.  High grievance rates have been linked to lower organizational productivity and profitability.

Types of Grievances  Almost all grievances are filed by unions on behalf of their members because of alleged violations of some provisions in the collective agreement. These types of grievances are referred to as individual grievances.  When a worker believes management is in violation of the collective agreement, it is recommended they obey and complain to their union representative as soon as they can. This “obey now, grieve later” principle ensures the employee is not disciplined for insubordination and permits work to continue while the disputed is resolved.  In other instances, the union may file a grievance on behalf of the entire membership, if it views management’s action(s) or the interpretation of the collective agreement as violating the rights of the entire membership or a sub-group within the membership. Such grievances are known as policy or group grievances.  In discipline or discharge related grievances, the burden of proof falls on the employer to show they had “just cause” to discharge or discipline the employee. For grievances involving other matters, the burden of proof falls on the union to show that management acted unfairly or violated the terms of the collective agreement.

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The “Three Questions” in Discharge Cases Slides 13.6 and 13.7

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For the employer to prove just cause in discharge and discipline cases, three questions must be answered to the satisfaction of the arbitrator. (See Slide 13.6 or Table 13.1 on page 368).

If the arbitrator is satisfied that management met the justcause standard, the question of what penalty should be applied is addressed though a series of five questions (see Slide 13.7 or Table 13.1 on page 368).

The arbitrator has the authority to substitute a lesser penalty if he or she deems that the one applied by management was too harsh.

The Internal Grievance Process Slide 13.8

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Collective agreements typically include a grievance procedure. These may consist of two, three, or more steps depending on what the parties agreed to put into the agreement.  Slide 13.8 represents an example of a four-step procedure beginning with an oral presentation stage. At this stage, the grievance is communicated to the first-level manager by a union representative.  If a resolution does not occur at the initial stage, the grievance progresses through subsequent stages and is brought to the attention of increasingly senior managers.

At the final step of the procedure, the matter is set down for arbitration and the decision is made to have the matter heard by a single arbitrator or a three-member arbitration board.

Most arbitration awards are issued by sole arbitrators; another one-quarter to one-third are issued by three-member boards.

It is important to remember that the parties are given the opportunity to resolve or abandon the grievance at any point short of the actual arbitration award being rendered. That is in fact the case, since most grievances are either resolved informally or at some stage prior to arbitration or even at the arbitration hearing itself.

The decision to file a grievance is usually left to the union, not individual members.

Although unions have a duty of fair representation, they are not compelled to pursue all grievances. This duty only requires unions to make such decisions in good faith and to exercise due diligence.

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Most unions discharge their duty conscientiously. However, in cases where a member believes this was not the case, he or she can file a complaint (duty of fair representation) with the labour relations board.

The union’s decision to refuse to deal with a particular grievance may be based on strategic considerations including the chances that the issue will arise again or spill over into the general workplace.

Arbitration boards may be composed of a single, neutral arbitrator or a panel that includes nominees who represent the employer and the union.

Criticisms about the Grievance Arbitration Process Slide 13.9

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Excessive Cost  In comparison to civil litigations, arbitrations are relatively low-cost alternatives, but they are by no means cheap.  The total one-day hearing fee, including the writing of the decision, for an arbitrator can be over $5,000 and, although, the parties are not required to retain legal counsel, lawyer fees can range from $2,500 to $10,000 per day. These costs are shared by the parties (excluding the grievor).  Considering the costs involved, it is understandable why some unions and employers use in-house grievance officers (unions) and labour relations officers (management).

For a smaller union with a modest dues base, the cost of arbitration is an important factor when considering whether to proceed with a grievance.

Excessive Delays  It is common for grievances that reach the arbitration stage to take one year or more to conclude from the time they were filed to the arbitrator’s ruling. For an employee who has been unfairly dismissed, the slow wheels of arbitral justice are a source of great frustration.  The slow pace of resolution is attributed to pre-hearing and post-hearing delays mostly involving scheduling of: arbitrators, legal counsel (if used), representatives, and witnesses. The pace is slower in cases where arbitration boards are used.  Delay is particularly problematic in discharge grievances. Not only is the grievor potentially without work, the employer’s liability to pay back-pay if the grievor is reinstated can be substantial.  The scarcity of acceptable arbitrators is also an ongoing problem.

Too Legalistic?  Some have raised concerns about arbitrations taking on the “look and feel” of courtroom trials.

These critics point to arbitrators who are becoming increasingly concerned with: 1) applying arbitral principles based on arbitral jurisprudence, 2) applying court-derived rules of evidence, and 3) focusing on legal rights rather than the underlying equities of the actual dispute.  The court-like feel is exacerbated by the parties who often choose to use outside legal counsel (lawyers).  Empirical evidence suggests lawyers have little, if any, impact on grievance arbitration outcomes, unless the other party chooses not to use one. In order to tip the balance, it may be the case that one party “lawyers up” while the other simply responds in kind. .

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Who Are the Arbitrators?  Most arbitrators and arbitration board chairs are lawyers, but that is not a requirement. There is no self-governing regulatory body for arbitrators  The most important requirements for an arbitrator are being trusted by the union and management and possessing extensive arbitration experience. These very difficult requisites create a situation whereby a select few arbitrators preside over the majority of cases. Hence, they are very busy, which partially explains the delays.  The typical arbitrator tends to be an older male with training in law or labour relations and with previous experience with either unions or management. Some are university professors.

Resolving Grievances: Outcomes Slide 13.10

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Arbitral jurisprudence provides guidance for the parties when future disputes arise. Several series of books report decisions and trends, which wise practitioners refer to on a regular basis.  Arbitrators are given much latitude in determining remedies when upholding a grievance. Moreover, the kinds of disputes for which they can determine remedies have also expanded.  In the past arbitrators were limited to simply interpreting the collective agreement. However, since 1974, the remedial authority of arbitrators has been expanded by important Supreme Court of Canada decisions (see Table 13.2 on page 375).

Today, issues that arise from the collective agreement must be adjudicated through the grievance arbitration process and not the courts.

In cases where the employer fails to show just cause for dismissal or discipline, the arbitrator can issue a reinstatement order with back pay and order further conditions if necessary.

Enforcement and Review of Arbitration Awards  If a party were to ignore an arbitrator’s order, it would be filed with the courts and enforced through a court order.  Occasionally, a party might dispute the order and ask for judicial review. However, a review is not an appeal and the courts do not overturn the decision of an arbitrator as long as the arbitrator was acting within his jurisdiction.  A court will only overturn an arbitrator’s order if it finds it to be “unreasonable.” That is to say, the decision of the arbitrator is rationally indefensible.  Judicial reviews that result in the arbitrator’s decision being overturned are quite rare. An empirical study looking at decisions made between 1996 and 2000 by Alberta arbitrators found that of the 7 percent that were reviewed only one-third were overturned.

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Predicting Grievance Outcomes: Arbitrator Characteristics  Some claim that arbitrators fashion their decisions so as not to unduly offend either party, since they derive their work based on mutual acceptance from both parties. However, there is no empirical evidence to support this claim.  Research attempting to link the arbitrators’ backgrounds such as education, gender, age, and experience with their decisions has yielded mixed results. It has been found that legal training has little effect on decision outcomes.

Grievance Characteristics  One study found that alcohol-related grievances were treated more leniently than those which involved narcotics.  Other studies show that grievors with poor work records are less likely to succeed compared to others who have unblemished records. This would suggest arbitrators support the notion of “progressive discipline.” That is, each successive offence should result in more severe penalties.

Grievor Characteristics  The gender of grievors is a popular research topic. Some research supports the chivalry theory which suggests female grievors are more successful at arbitrations with male arbitrators. Other research suggests they do not fare as well as men. However, at present research results are mixed regarding the effect of gender on arbitration outcomes.

Alternatives to Conventional Arbitrations Slide 13.11

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Expedited Arbitration  Criticisms of conventional grievance arbitration procedures (discussed earlier) have led to the exploration for alternatives. One of these alternatives is expedited arbitration.  Since the parties are free to design their own approaches, there can be many variations of expedited arbitration procedures (see common features in the overhead).  In British Columbia and Ontario, expedited arbitration procedures are included in legislation, although in Ontario it is voluntary and based upon a request from one of the parties.

There are generally fixed time limits during which the arbitrator must render a decision.

Slide 13.12

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Grievance Mediation  A second innovation which seeks to improve upon traditional grievance arbitration is called grievance mediation. In some respects, it represents an improvement over expedited arbitrations (see advantages in Slide 13.12).  Aside from the cost and time savings compared to arbitration, the most beneficial aspect of grievance mediation is its reduced adversarialism. At arbitration only one party wins, whereas at mediation both parties can win.

The mediator is a neutral third party who helps the parties clarify issues and makes recommendations for their resolution. A mediator does not have the authority to impose a decision like an arbitrator. .

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In some cases, at the invitation of the parties, arbitrators will serve as mediators prior to or during the arbitration hearing.

The opening vignette gives a good overview of the process and benefits that can be realized from grievance mediation.

Formal Dispute Resolution Procedures in Non-union Firms Slide 13.13

Voluntarily Adopted Arbitration  In non-union firms, some employers have adopted a variety of arbitration and dispute resolution procedures such as peer review panels and third-party arbitration.  It has been suggested such employer initiatives occur because management wants to forestall employee-initiated litigation or avoid unionization.  The main concern with employer-sponsored arbitration systems relates to procedural fairness.

The Due Process Protocol  The popularity of employer-sponsored arbitration procedures, particularly in the United States, and the concerns that have been raised about their fairness has prompted several groups, such as the National Academy of Arbitrators, the American Bar Association, and the American Civil Liberties Union, to develop the “Due Process Protocol.”  This protocol calls for employers to voluntarily adopt the following guidelines to ensure fairness: 1) provide representation rights to employees, 2) give employees access to information prior to the hearing, 3) allow employees to take part in the selection of arbitrators, and 4) create a list of experienced, neutral arbitrators.  As of yet it is unknown how many employers abide by this protocol.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. Define the term “grievance” in the context of union–management relations. A grievance is a dispute between union and management regarding the interpretation or application of the rights contained in the collective agreement. (p. 363) 2. Explain the difference between grievance arbitration and interest arbitration. In grievance arbitrations, an arbitrator makes a final and binding decision regarding a dispute over the interpretation, application, or alleged violation of the terms of an existing collective agreement.

On the other hand, interest arbitration serves as a substitute for strikes and lockouts. An arbitrator renders a final and binding decision in the form of a new collective agreement. (pp. 363–364) 3. What have studies revealed about grievors in the pre-grievance and post-grievance periods?

There was no significance difference between grievors and non-grievors with regards to performance ratings, but grievors did have higher promotion and attendance rates in the pregrievance period. In the post-grievance periods, grievors had lower performance ratings, lower promotion rates, and higher termination rates. (p. 365) 4. What is the relationship between grievance rates and a firm’s performance? The higher the grievance rate the lower the organization’s productivity and profitability. (pp. 366–377) 5. According to the text, what three factors are associated with early settlement of grievances? 1) a co-operative bargaining relationship, 2) experienced first-line managers, 3) a willingness to learn from past grievances, and 4) the exclusion of lawyers. (p. 366) 6. In grievances involving discharges and discipline, which party has the burden of proof (onus of proof)? Management. (p. 367) Explain what this burden entails. Who bears the burden of proof in cases that do not involve discipline and discharge?

7. In discharge and discipline grievances, employers must show they had “just cause” to act the way they did. What three questions will an arbitrator consider in order to establish just cause? (p. 368) 8. In discipline and discharge cases where just cause for discipline has not been proved, what option(s) do arbitrators have? The arbitrator will cancel the disciplinary action. (p. 367) In cases where the just cause standard has been met, what options do arbitrators have? They can dismiss the grievance entirely or substitute a lesser penalty. (p. 367) 9. Demonstrate your understanding of an internal grievance process by giving an example of a three-step procedure. Remember to provide instructions at each step. (pp. 368–370) 10. What is the approximate percentage of grievances that get settled prior to arbitration? A Quebec study found it to be 97%. (p. 369) 11. Under all Canadian jurisdictions, unions have a statutory duty of fair representation. Does this mean unions must agree to accept all bargaining-unit members’ grievances and take them all the way to arbitration if necessary? If so, why; if no, why not? (pp. 370–371) .

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12. Explain what the duty of fair representation means. (p. 371) 13. Suppose a bargaining unit member feels unfairly treated by the union because their unresolved grievance was not taken to arbitration; what can he or she do? File a complaint with the labour relations board. (pp. 370–371) 14. Discuss two common criticisms of the grievance arbitration process. (pp. 371–372) 15. According to your text, what is the approximate total cost of a one-day arbitration? (p. 372) 16. Do you have to be a lawyer to serve as an arbitrator? No (p. 373) 17. Since 1974, the jurisdiction of arbitrators has greatly expanded. What do the authors attribute this to? In other words, what reasons do they give for this relatively new development? Various Supreme Court of Canada decisions in landmark cases. (p. 375) 18. Explain the concept of judicial deference in the context of grievance arbitrations. (p. 376) 19. What is the theory of progressive discipline? (p. 377) 20. Is the following statement true or false? Most published studies conducted on the effects of gender have found the existence of a pro-female bias in arbitration decisions. True (p. 377) 21. In what way is expedited arbitration different from grievance mediation? (p. 377) 22. What is the greatest concern about formal dispute resolution procedures in non-union firms?

Procedural fairness (p. 379)

23. Explain what the “due process protocol” is and discuss its intent. (pp. 379–380) Beyond-the-text questions 24. What is “post-discharge” evidence? Do you think it should be heard and considered by arbitrators when they make their decisions? If so, why; if no, why not? To what extent has the introduction of this kind of evidence been limited by the Supreme Court of Canada in Cie Miniere Quebec Cartier v. Quebec, [1995] 2 S.C.R.1095? In other words, according to the Supreme Court of Canada, when is this kind of evidence allowable?

25. Explain the following legal terms and concepts in the context of grievance arbitration and provide examples how each applies. i) Doctrine of laches ii) Estoppels iii) Progressive discipline iv) Culminating incident 26. The burden of proof (onus) falls on management to show they acted with just cause in discharge and discipline grievances. What is the level or standard of proof required? Balance of probabilities, otherwise known as the preponderance of the evidence.

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Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

27. In your opinion, is it fair that employers should have to prove they had just cause to either discipline or discharge an employee? Why?

28. Even if a non-union firm adopted the Due Process Protocol when developing an employersponsored arbitration process, do you believe employees would be as protected as they are in unionized settings? What additional guidelines would you propose for the protocol to make employer-sponsored arbitration procedures as fair as they are in unionized settings?

Class Activities 1. Film presentation As a suggestion, instructors may wish to consider showing the film The Case of Barbara Parsons, produced by the National Film Board of Canada. The catalogue number is 0178520. The video runs for approximately 52 minutes.

Synopsis: This video was produced in 1978, and describes a typical grievance based on a promotion issue. The film traces the various steps in a grievance process leading to arbitration. It centres on a complaint lodged by an employee who feels unjustly passed over for promotion in favour of another with less seniority.

Please Note: It is recommended instructors view the video beforehand and assess the ideal point where the video may be paused. At that point, you may wish to ask students to speculate on the outcome of the arbitrator’s decision and justify their reasoning. Afterwards, the video may be viewed to its conclusion and further questions may be asked.

2. Arbitration simulations and exercises Three grievance arbitration simulations developed by Allen Ponak and a fourth case developed by both Allen Ponak and Daphne Taras are included in Appendix B. These simulations include valuable teaching notes and instructions for students, which can be modified to suit your teaching needs.

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Chapter 14

Union Impact on Compensation, Productivity, and Management of the Organization Chapter Overview Unions have an impact on all the parts within the model of the industrial relations system. Moreover, since all the parts of the model are interrelated, they in turn impact on unions. Chapter 14 looks at the last part of the model—namely the effects or outcomes. It specifically focuses on the effects of unions on workers, management, and society. Discussion of the impact of unions is done using economic theories and perspectives tempered with industrial relations knowledge.

Chapter 14 begins with an exploration of the economic factors which increase and decrease the power of unions. The economic concept of the elasticity of demand as it relates to substitute products and inputs, and labour costs is examined. In each case, the forces that serve to increase or decrease union power are thoroughly explained, bringing valuable insight into union motives and strategies. These same concepts are revisited in the context of three non-competitive markets: 1) monopolies, 2) the public sector, and 3) monopsonies.

Next, following a brief explanation of the challenges associated with measuring union impact, the chapter moves to a discussion of the union effect on compensation, beginning with wages and wage structures. This is followed by a review of empirical data on the effects of unions on non-union wages and fringe benefits. In this part of the chapter, we learn there is substantial evidence to prove unions are successful at increasing wages and fringe benefits for their members.

The third part of the chapter summarizes research findings relating to the impact of unions on productivity, profitability, employment, and investment. The last section of the chapter adopts a more industrial-relations viewpoint as discussion centres on how unions impact the way management runs organizations.

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Lecture Outline and PowerPoint Slides The Effects/Outcomes Slides 14.1 and 14.2

Chapter 14: Union Impact on Compensation, Productivity, and Management of the Organization 

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The model of the industrial relations system introduced in chapter 1, which served as the framework around which the material in the last 13 chapters were introduced and discussed, makes it clear that the system consists of interdependent parts. In other words, none of the parts within the model exist or operate in isolation.

While the environment, actors, and the conversion process impact upon unions, it is also true that unions in turn impact upon all the other parts within the system.

In this chapter, the focus is on the various ways that unions impact the labour market, bargaining unit members’ wages, and management of the organization.

Union Power and Methods for Affecting Compensation Slide 14.3

Internal Power  To begin with, it should be noted the power required to attain union goals starts internally. Such factors as the solidarity of the membership and the executive, the expertise available, and the union’s financial health all contribute to a union’s power.  Political rivalries, rank-and-file discontent, and poor leadership can severely hinder, if not prevent, a union from marshalling its power to attain its goals.

External Power and Elasticity of Demand for Labour  The external environment plays an important role in moderating a union’s power.  Some of the external factors include the substitutability of products that are built by union workers, the substitutability of inputs such as capital and non-union workers, and the labour cost as a percentage of total expenses.

Substitute Products  In cases where there are few if any substitutes for the products or services provided by firms employing unionized workers, increases in wages demanded by unions can more easily be passed on to consumers.  The lack of substitutes (products and services) in the marketplace provides unions with more bargaining power, which they can use to achieve their goals (higher wages and benefits, or other concessions). .

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The ability of a firm to pass on the added costs means they do not have to respond to the higher cost of labour by reducing the number of workers. In other words, the costs go up without the resulting decrease in demand for labour.

Substitute Inputs  If the whole industry is organized (unionized), then cheaper non-union labour is unavailable.

This increases union power.  Power also accrues to unions when union labour is not easily substituted by technology or it is institutionally difficult to do so. This may partially explain why unions sometimes resist the introduction of new technology in the workplace.  To ensure union labour is more difficult to replace with lower-paid workers, unions bargain for restrictive work practices, such as rigid job classifications and contracting-out clauses in collective agreements.  Professional associations and craft unions maintain restrictive certification and licensing standards to prevent easy substitution of labour.  Another way of limiting substitution is by controlling the hiring process through union security clauses as is the case with union shop arrangements. Under this provision employers can only hire union workers.  In general, unions support any public policy initiative that increases the cost of hiring nonunion workers. This may explain, in part, why unions support increasing minimum wage and a variety of other wage-fixing programs.

Labour Cost Portion  If the cost of union labour represents a small proportion of the total expenses for a firm, it is easier for the employer to absorb or accept a wage increase. This rationale suggests that under such conditions unions would have more power, especially in capital-intensive industries.  Unions representing workers in monopolies are able to negotiate high wages, because those firms are better able to pay out due to the monopoly profits they earn. Moreover, unions in these firms do not have to be concerned about competitors who produce or provide similar services using non-union workers.  The level of competition in the market affects unions. Generally, in instances where consumers (goods and services) and employers (labour) have many alternative sources available to satisfy their needs or wants, unions have less power to attain their goals.  In regulated or non-competitive markets, unions have more power than in highly competitive markets.

Union Power in Non-competitive Markets Slide 14.4

Monopoly in the Product Market  Firms that enjoy a monopoly in the product or service market tend to benefit by generating higher profits.

Monopolies also ensure there are no substitute products or services for consumers.  On the other hand, monopoly firms may be in a better position to withstand longer strikes, use their profits to support costly union avoidance strategies, and invest in expensive labour-saving technologies.

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Public-Sector Labour Market  In theory, unions in the public sector should be quite powerful because they exist in a regulated, monopoly-like environment.  In the public sector, increased labour costs are passed on to taxpayers.  However, there are forces which serve to suppress wages nonetheless. For example, politicians who want to curb inflation may set an example by moderating the settlement of public-sector wages.  Unlike private-sector employers, public-sector employers still enjoy a revenue stream (taxes) during strike or lockout situations. This allows them to withstand longer strikes, which weakens the power of unions.

Monopsony  A firm that is a monopolistic buyer of labour is called a monopsonist. This occurs when an industry, region, or town is dominated by a single, large employer.  The wage demands of unions in monopsonies are not offset by corresponding reductions in the demand for labour.  The conditions within which monopsonists operate give unions power to negotiate high wages for their members, which the employer can absorb.

Measuring the Union Impact Slide 14.5

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Separating Cause and Effect  When trying to determine the impact of unions on wages and fringe benefits problems arise with respect to causality. The question that arises is: which comes first, unionization or high wages, and how does this relate to quit or exit rates?  The conventional view is that unionization causes wages to increase, which in turn reduces quit rates, because high wages are an incentive for some workers to stay.  The alternate view is that causality runs the other way.

For example, workers who earn high wages to begin with, tend to stay and may feel the only way they can improve conditions and have a voice is by organizing. The voice gained by unionizing provides members with due process and job security.

What is known is that unions are associated with higher wages, job security, and due process at work.

Quality  In terms of the quality of workers, here too we find causality issues.  One would expect a firm which pays high union wages to have a large applicant pool to choose from and therefore have the opportunity to be highly selective in its hiring choices—“hiring the best from many.” So, high union wages lead to a high-quality workforce.  The opposite causality view is that high union wages cause lower quit rates which serve as a disincentive for marginal or poor-quality workers to leave. This in turn leads to a poor-quality workforce.  In the end, arguments could be made to support either direction of causality.

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Union Impact on Compensation Slides 14.6 and 14.7

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Impact on Wages and Wage Structures  It is generally accepted that unionized workers earn about 15% more in wages than identical workers who are not unionized. Other studies have found the difference to be in the range of 10% to 25%. This difference is called the union–non-union wage differential, or union wage impact.  Union wages are less affected by economic fluctuations, such as inflation and recession, than non-union wages.  The union–non-union wage differential is higher for bluecollar and less-skilled workers than for white-collar and more-skilled workers.  Within unionized workplaces, unions tend to affect the wage structure by reducing the wage differentials that reflect factors like skill, education, and experience.  In Canada, the union–non-union wage differential is higher for women than for men.  The wage differential is higher in decentralized structures than in centralized structures.

The wage differential is smaller in highly competitive marketplaces than it is in regulated or monopolistic environments.

Studies show that in the early 1990s the union–non-union wage differential decreased to about 10%.

Impact on Non-union Wages  On the supply-side, unions impact wages of non-union workers by increasing the supply of non-union workers which in turn depresses wages. This occurs because as union wages increase, employers reduce the number of unionized workers they employ. These displaced, former union workers join the ranks of non-union job-seekers.  On the demand-side, unions can increase the demand for non-union workers which drives up non-union wages. This can happen when union wages become so expensive that employers are more willing to substitute union labour with non-union labour. Another way employers can reduce union labour is by contracting-out, shifting production, relocating production facilities, etc.  Unions also impact non-union wages when employers pay a premium to avoid unionization (union avoidance) and when they are successful at lobbying governments to increase minimum wage and pass other wage-fixing legislation.

Impact on Employee Fringe Benefits  According to empirical evidence, the union–non-union fringe benefit differential is even greater than the wage differential.  When union workers earn more, they also have the ability to forgo additional wage increases in exchange for better fringe benefits.  Fringe benefits in the form of deferred wages may be more widely found in unionized firms.

These may come in the form of pensions, vacation leaves, study leaves, etc.  Employees may be willing to accept deferred compensation when wages are high and they have sufficient guarantees the employers will pay them out. In unionized settings, such guarantees can be enshrined in the collective agreement. .

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Union Impact on Productivity, Profitability, Employment, and Investment Slides 14.8 and 14.9

Impact on Productivity and Profits  The long-held view of industrial relations analysts is that unions improve various aspects of productivity. Some studies support this view.  The direct effects of unions include lower quit rates and enhanced quality.  The net effect on productivity per worker is zero to slightly positive. In the public sector, most studies show zero net effect on productivity.  There is a relationship between labour climate and the productivity of union workers. Studies have found a negative productivity effect in cases where union– management relations were poor.  Unions likely decrease the profitability of firms.

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Impact on Employment  Classic labour economics predicts that as union wages increase, employers will demand less labour (reduce the number of workers to offset the additional cost).

This view fails to account for the fact that unions also bargain over employment levels. That is, the number of workers hired or retained. Therefore, a powerful union could increase both wages and employment levels.

The union’s preference for seeking both high wages and employment or trading one for the other is dictated by the preferences of the bargaining unit members.

Impact on Investment  Unions can impact investment decisions by encouraging firms and governments to invest in capital and labour. An example of this is social contracts in Quebec (see chapter 12).  On the other hand, the presence of unions can also discourage investors because of higher union costs.  Empirical studies generally indicate a negative union effect on investment.

Union Impact on Management of the Organization Slide 14.10

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Up to this point the focus has been on the economic impact of unions. However, the impact also extends to non-economic aspects of the union–management relations.  The presence of unions in the workplace is associated with improved due process and generally more democratic work rules (see chapter 11). As unions achieve their goals, management loses their ability to direct the workforce as they once did prior to unionization.

The presence of a union that bargains for provisions in a collective agreement serves to moderate if not restrict management’s unfettered right to control the workplace. .

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The argument can be made that unions impact organizations by providing a variety of incentives and disincentives which together encourage better management practices.

Restrictions on management rights can extend from the hiring stage to the exit stage and everything in between. Examples include closed-shop union security clauses, probationary status time limits, contracting-out, workloads, performance appraisals, layoffs, retirement provisions, etc.

Legislative Assistance  Another often overlooked impact of unions is the assistance they provide in reporting workrelated violations and the help they provide enforcing legislation.  Through a variety of means including grievance procedures, unions are able to enforce some existing legislation such as human rights, health and safety, etc.  Participating in joint health and safety committees at the workplace level provides a good example of how unions take an active role in the enforcement process.  Unions also impact management of organizations by lobbying governments and promoting improved work-related legislation, such as minimum employment standards, environmental laws, pay equity, employment equity, human rights, etc.

Some Unintended Side Effects  In some cases, provisions contained in the collective agreement like seniority clauses can impede initiatives such as employment equity and accommodations for the disabled.  Ratios for certain classes of workers (apprentices to journeymen) intended to protect jobs can also restrict job opportunities for some workers.  Provisions in the collective agreements meant to regulate the workplace, in order to make it more equitable for workers, may lead to an overregulated and rigid rules-based work culture.

Restriction in the Public Sector  Unions in the public sector do bargain over broader issues which tend to further limit managerial control and flexibility. This is especially the case with respect to unions that represent professionals who desire more autonomy and control over their own jobs.  In the case of public school teachers, one study concluded that negotiated items, such as pupil– teacher ratios, curriculum content, class sizes, etc., severely constrained the ability of school boards to initiate changes.  Another study found that active unions help supervisors be more aware of and use policies relating to equal employment opportunities and alcoholism.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. Define what social labels are and how their use is intended to increase product demand. (p. 384) 2. What is featherbedding? Provide an example of how it might be used in the workplace.

Featherbedding involves the use of restrictive work practices that have the effect of inflating the number of workers required to complete a work process. An example would be restrictions on who can do certain kinds of jobs in a plant. This prevents employers from redesigning jobs (job enlargement, job rotation) and using multi-skilled workers to reduce the labour force. (pp. 385, 390) 3. Which kind of union security provision is most likely to limit the use of substitute inputs an employer can use? A closed-shop provision. (p. 385) 4. Summarize the rationale given by the authors for why unions generally oppose workfare programs. (p. 385) 5. Provide an example of a monopsonist. (p. 387) 6. According to empirical studies, are union wage gains generally higher in regulated sectors or deregulated sectors? Regulated (p. 386) 7. Describe the forces that serve to depress or moderate union wages in the public sector. (p. 387) 8. The conventional view suggests the direction of causality begins with unionization, which raises wages and in turn reduces quit rates. What is the alternate view of causality supported by industrial relations analysts? That high wages result in reduced quit rates, which in turn encourage workers to seek “voice” through unionizations. (p. 388) 9. On average, how much more can a unionized worker expect to earn in wages compared to an identical, non-unionized worker? About 15%. (p. 389) 10. Are union wages more sensitive to economic fluctuations than non-union wages? If so, why; if no, why not? (p. 389) 11. According to your text, has the union–non-union wage differential been increasing or decreasing in the past few decades? Decreasing (p.389) 12. Describe how unions can negatively impact non-union wages. That is, how can unions reduce non-union wages? Classic labour economics holds that unionized wage gains lead to corresponding union job losses. This has the effect of swelling the ranks of non-union job seekers (non-union labour supply) which in turn depresses wages paid to non-union workers. (p. 390) Describe how increasing union wages can raise non-union wages. (p. 391) 13. Provide an example of employee benefits in the form of deferred compensation. In what way would the deferment benefit the employee? In what way would the deferment benefit the employer? (pp. 391–392) .

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14. According to research results, what is the net effect of unions on productivity? It is neutral to slightly positive. (pp. 392–393) Is the net effect different in the public sector and, if so, what is it? It is only slightly different at zero. (p. 393) 15. Describe how the labour-relations climate can affect productivity? Poor labour-relations climate has a negative effect on the productivity of union workers. (p. 393) 16. What is the research evidence linking unionization to the profitability of the firm? In other words, how do unions impact on profitability? We do not know for sure. (pp. 394–395) 17. Indicate how it is possible for unions to increase wages and level of employment at the same time. (p. 396) 18. How do unions provide legislative assistance to governments and society in general? (p.397) 19. Identify three work-related public policy initiatives that unions support. Human rights, health and safety, minimum employment standards, employment equity, and pay equity. (p. 397)

Beyond-the-text questions 20. Limiting the supply of labour is a long-established strategy practiced by unions which is also practiced by professional associations. Describe how the Canadian Institute of Chartered Accountants (CICA) limits the supply of chartered accountants (CAs).

21. Log on to www.corpwatch.org and choose one corporation which has been cited for contributing to poor working conditions in third-world labour markets and describe the circumstances that raised the concerns of CorpWatch.

Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

22. Please read Exhibit 14.1 on page 384 and answer the following question: Many leading cosmetic manufacturers include social labels on their products in the form of notices stating, “Not animal tested.” In your opinion, would it be similarly beneficial to provide social labels identifying products that were manufactured without the use of child labour?

Why or why not? What problems would you anticipate if the Canadian government decided to enact legislation making such child labour labelling mandatory? Which segment or group in Canadian society would most likely support such labelling? Which segment or group would likely disapprove?

23. It can be argued that the proposition contained in Exhibit 14.8 on page 395 is fundamentally flawed on several counts. Using the information provided in this chapter and previous chapters in the text, construct a cogent rebuttal to refute the claims made in Exhibit 14.8.

24. Discuss the merits of the following statement: Having a union in place provides a benefit to stockholders. A union shocks management and holds them to a higher standard of conduct. In other words, unions force management to engage in more equitable business practices to the benefit of everyone. .

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Chapter 15

Public-Sector Collective Bargaining Chapter Overview It is fitting that a chapter be devoted entirely to public-sector bargaining in the special topics section.

As the opening vignette illustrates, the interaction of the various actors and forces in the public-sector realm make bargaining and dispute resolution procedures quite unique.

To begin with, the chapter defines what the public sector comprises and its scope. The latest available data from government sources are used to show the importance of the public sector relative to the total economy. For example, in 2006, of the nearly 16.5 million Canadians in the workforce, almost 3.2 million (19.1%) work in the public sector. Next, the evolution from the association–consultation model to the more traditional form of unionism is examined.

The second part of the chapter focuses on highlighting the distinguishing features of public-sector collective bargaining that set it apart from the private sector. The various features are divided into three categories: 1) employer differences, 2) employee and union differences, and 3) policy and legislative distinctions. What follows is a review of the various strikes and dispute procedures used in the public sector, such as compulsory arbitration, the designation model, and emergency legislation.

The last part of chapter deals with issues relating to compensation in the public sector. Some long-held assumptions about wage differentials and cumulative wage increases are tested against results of empirical studies and government data. We learn there is no support for the notion that public-sector wage settlements have outpaced those in the private sector since 1979.

The chapter closes with a thorough discussion of public-sector wage controls during two distinct periods—the 1980s and 1990s. The results of a review of the impact of restraint programs in the 1980s are explored, as are those of another subsequent review of similar programs implemented during the 1990s. What is made clear is that such legislated solutions are no more successful at meeting fiscal goals than negotiated solutions.

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Lecture Outline and PowerPoint Slides Special Topics Section Slide 15.1

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Chapter 15: Public-Sector Collective Bargaining  It is not an exaggeration to say that public-sector collective bargaining is a world unto its own. The forces that come together and interact in this reality create a unique industrial-relations environment that is more complex and operates very differently than the private sector.  In the public sector, the government is the employer. That employer will negotiate with unions, but can also legislate its workers back to work, ban them from striking, and impose wage constraints such as freezes and rollbacks.

The government (as employer) is not driven by the profit motive and in most cases has no market share to protect. When strikes occur, public-sector employers save money, in contrast to private sector employers who usually lose money.

The public-sector employer is susceptible to the vagaries of politicians whose decisions and motives can be quite unlike those of managers in profit-seeking firms.

In the mid-1960s, Canadian public-sector employees began organizing at a rate unmatched since the 1930s and 1940s. By the late 1970s, most public-sector employees who could be were covered by collective agreements. Today, the public sector is much more heavily unionized than the private sector.

In the early 1980s, the government (as employer) initiated the first of many wage restraint programs aimed specifically at the public sector.

Since the 1980s, Canadians and the government itself have undergone a major shift in the way they view the role of government intervention, unions, taxation, and public spending. Since that time, new public policies have reflected so-called market forces.

Size and Scope of the Public Sector Slide 15.2

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The public sector comprises six sectors: 1) federal civil service, 2) provincial civil service, 3) municipalities, 4) government-owned enterprises, 5) education, and 6) health care.

In 2006, public-sector employment was about 3.1 million.

This accounted for about 22.5% of the total Canadian workforce.

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While the Canadian workforce grew by about 2.2% annually from 1994 to 2006, employment in the public sector declined 1.4%.

This flat growth rate suggests that government initiatives undertaken in the 1990s aimed at reducing the size of government relative to the total economy were successful.

The reversal in public sector proportion was achieved in three ways: 1) privatization, 2) contracting-out, and 3) reductions in the level of services provided.

Development of Public-Sector Collective Bargaining Slide 15.4

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Although widespread unionization of public-sector workers did not begin until after the mid-1960s, today more than 50% of all union members in Canada work in the public sector.

Presently, most public service employees are covered by collective agreements.

While there has been a decline in union density in all areas of the public sector, the density remains considerably higher than in the overall economy (29%) or in the private sector (18%).

Association–Consultation Model Slides 15.5 and 15.6

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Associations of public employees existed before 1900, but these were not unions. In fact, public employees preferred the association–consultation model over traditional unionism. These employee associations rejected many of the hardball union tactics and instead used a consultative process to influence the government on such matters as salaries and working conditions.

The transformation from the association–consultation model to the traditional form of unionization began in the 1950s and was virtually complete by the mid-1970s.

The impetus for the change was a growing disappointment with the limitations of the consultation process and the resulting outcome.

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Unions and Collective Bargaining Slide 15.7

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Some of the problems and limitations associated with consultation included: 1) the narrow range of issues that were open for consultation, 2) the absence of a mechanism to resolve differences, and 3) the unfettered authority of the employer to act unilaterally.  When public-sector employees realized the benefits of collective bargaining over the consultative approach, they began to organize along traditional union lines. This transformation was helped along by a shift in the legislative environment in the 1960s that supported collective bargaining in the public sector.

One of the most important turning points in the transition from association to union occurred in 1967 when the Public Service Staff Relations Act was enacted. This gave 100,000 federal employees the right to bargain collectively.

In 1965, the Quebec Labour Code provided all public employees the right to bargain collectively.

By 1975, nearly all public employees in Canada had been given the right to engage in collective bargaining and by the late 1970s most of the eligible public employees were covered by collective agreements.

Distinctive Features of Public-Sector Bargaining Slide 15.8

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Employer Differences  The distinctive nature of public-sector collective bargaining is rooted in the uniqueness of the employer.

This in turn creates an industrial relations environment quite unlike what is found in the private sector.  Public employers differ from their private-sector counterparts in several respects: 1) they have a more diffuse decision making and authority structure, 2) they have the ability to legislate, 3) bargaining disputes are more public and affect more people, and 4) there are political implications attached to the union–management relationship.

The most important distinguishing feature between public and private sector employers concerns profit motive. Whereas most public-sector employers and their managers are evaluated on the basis of the service they provide, how they manage public funds, or how they fulfill political considerations, private-sector employers and their managers answer to market considerations such as profit and market share.

The absence of profit motive affects many of the decisions that public-sector managers make.

For example, during strikes, the government (as employer) continues to collect the same level of revenues, yet reduces its payroll (save money).

On the other hand, the political implications, the inconvenience to the population, and the public nature of disputes limit the extent to which governments can benefit during strikes.

The political aspect of work stoppages in the public sector motivates both union and management to seek public support by promoting their own versions of events in the media.

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Public-sector employers in Canada continue to struggle in their quest to develop the ideal form for labour relations. At times, various provinces and municipal governments have adopted either centralized or decentralized bargaining structures to improve collective bargaining.

Ultimately, the power of provincial and federal governments to legislate trumps conventional forms of collective bargaining. The temptation to adjust the rules to suit their mandates proved too strong in the 1980s and 1990s as the federal and most provincial governments either rolled back or froze wages.

Employee and Union Differences     

The goals and needs of workers are essentially universal in nature, and so are the penalties associated with strike action. However, there are some demographic differences between public- and private-sector workers.

The public sector employs a higher proportion of women than the private sector (60% vs.

30%). This has significant implications for employment and pay equity issues.

The public sector also has a higher proportion of white-collar workers and professionals.

Since the bulk of workers employed in the public sector were hired during the 1960s and 1970s, there is now a “demographic bulge” that is aggravated by the limited hiring in the 1980s and 1990s.

The public-sector demographic bulge is sure to have labour-relations as well as humanresources implications in the future.

Policy and Legislative Distinctions Slide 15.9

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As is the case in the private sector, public-sector employees have the right to unionize and employers are compelled by law to recognize the union and engage in collective bargaining.  There is extensive diversity of collective bargaining legislation in the public sector which is due in part to its different origin. Whereas the modern-day system of collective bargaining legislation in the private sector was derived from a common origin (PC 1003), this was not the case in the public sector.

The extensive diversity of legislation and applicability to certain groups of public employees is illustrated in table 15.3.

Private- vs. Public-Sector Legislation Slide 15.10

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Even in cases where public-sector employees such as hospital workers fall under private-sector labour codes, there may be special provisions that restrict their rights compared to private-sector employees. For example, in Alberta, hospital workers are governed by the Alberta Labour Relations Code, but are prohibited from striking.

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In general, public-sector statutes differ from those found in the private sector in three areas: 1) less discretion is given to labour boards with respect to bargaining unit make-up, certification procedures, and eligibility of certain workers, 2) the scope of bargaining issues may be limited or constrained as in the case of unilaterally imposed wage-restraint programs, and 3) procedures for resolving disputes arising from collective bargaining may prohibit striking for certain employees.

Public-Sector Strikes Slides 15.11 and 15.12

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One of the major legislative differences between the public and private sectors relates to the treatment of strikes. In the private sector, workers have the right to strike after meeting certain conditions. However, this is not always the case for many public-sector workers.

The issue of whether public-sector workers should have the right to strike is contentious and replete with good arguments on both sides.

Those who oppose the right to strike argue that: 1) strikes inconvenience and may even pose a danger to the public, 2) the near-monopoly position of government services where substitutes are not available gives unions too much bargaining power during a strike, and 3) large-scale public-sector strikes have a destabilizing effect and can lead to confrontations.

The strongest argument favouring the right to strike is that the alternatives are worse because they weaken the collective bargaining process, damage union– management relations, and generally produce inferior contracts.

Public-Sector Strikes—Averages Slide 15.13

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Public-Sector Strike Record  According to the Table 15.4 (Slide 15.13), strike activity has been declining since 1984.  Between 1975 and 1984, the average person-days lost per year due to strike activity was about 1.8 million.  The frequency of strikes declined from a high average of 214 per year in the period between 1975 and 1979 to about 53 per year between 2005 and 2007.  The decline in both strike activity and person-days lost in the public sector is consistent with recent trends in the private sector.

However, amidst these encouraging trends is the well-founded concern that public-sector strikes increasingly account for a greater proportion of total person-days lost in the Canadian economy. In the years between 1975 and 1994, public-sector strikes accounted for less than 30% of total person-days lost. In comparison, between 1995 and 1999 that increased to 34% and between 2000 and 2004 increased even further to 39.4%. Since 2005, the percentage has decreased again to 32.5%. .

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Public-Sector Dispute Procedures Slide 15.14

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Compulsory Interest Arbitration  The most frequently used substitute for strikes in the public-sector is compulsory interest arbitration. In some cases, it is also used to resolve specific disputes.  Although unions oppose any strike bans, compulsory interest arbitration is viewed as more acceptable than legislated wage cuts or freezes, and back-to-work orders.  Compulsory interest arbitration involves a neutral third party (arbitrator) who hears and considers arguments from both union and management and renders a binding decision in the form of a new collective agreement.

The selection of arbitrator can be made by a labour board, mediation service, chief justice, or by the mutual consent of union and management.

Unions have objected when governments have imposed unacceptable and inexperienced arbitrators who were sympathetic to management. In one case involving the Ontario minister of labour, the Supreme Court of Canada ruled this practice unacceptable. The decision helps ensure that experienced, independent, and generally acceptable arbitrators are used for compulsory interest arbitrations.

Designation Model  The designation model was first introduced in the federal sector and has since been adopted in six provinces.  This approach allows the union to strike, but designates a percentage of bargaining unit members as essential. The designated essential workers are required to remain on the job to ensure the public interest is served. The percentage can be mutually agreed upon or decided by a labour relations tribunal.  Under the Public Service Staff Relations Act, (PSSRA) the percentage has fluctuated depending on the service being provided. For example, in the case of librarians, it has been as low as 2%, and for traffic controllers as high as 100%.  One problem with this model is determining what the correct percentage ought to be. Unions, understandably, prefer the lowest percentage whereas the employer favours the highest.

Negotiations over which percentage is acceptable can be difficult and long.  There is evidence to suggest that despite the process being frustrating at first, subsequent negotiations become easier as the parties gain experience.

Slide 15.15

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Emergency Legislation  The most objectionable dispute resolution procedure to public-sector unions is legislation that ends strikes or imposes contract terms.  As Slide 15.15 indicates (see also Table 15.5), 101 strikes were ended using back-to-work legislation between 1965 and 2007. Most of these laws were enacted in the province of Quebec (26).  The years between 1975 and 1984 mark a period when back-to-work legislation was used the most. After decreasing in subsequent decades, it has increased again in the period 2000 and 2004.

Some have expressed concerns that using this kind of special legislation may impede the maturation process of the parties in the public-sector industrial relations system. .

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Public–Private Wage Differentials Slide 15.16

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Almost from the onset of collective bargaining in the public sector, Canadians encouraged by business interests developed false perceptions of overpaid and overprivileged civil servants.  Private-sector employers have continued to complain about high wage settlements in the public sector that set unrealistic patterns they cannot match to stay competitive.

Neo-conservatives point to the high public payroll as one source responsible for high taxes.

Research suggests that wages are 5%–10% higher in the public sector, and that benefits are more extensive compared to the private sector. However, the cumulative wage increases between 1979 and 2007 have lagged behind the private sector.

Table 15.7 indicates that between 1979 and 2007 the cumulative wage increases in the public sector were 261.5%, whereas in the private sector it was 278.5%.

Public-Sector Wage Controls Slide 15.17

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The lagging wage increases in the public sector were the result of legislated wage controls in the 1980s and 1990s.  A review of 1980s restraint programs (the first period of controls lasting about three years) in British Columbia, Manitoba, Ontario, and New Brunswick found: 1) no direct relationship between provincial economic growth and the degree of restraint demanded by government, 2) wage increases varied considerably among different groups in each province, and 3) staff levels increased during the restraint period.

Collective bargaining resumed for a brief period after the first round of restraints in the 1980s, but it was followed by a second round in the early 1990s. The need to reduce government spending in order to tackle the public debt was cited as the rationale.

Starting in 1991, the federal government along with seven provinces either reduced or froze wages. None of the three western provinces passed wage control legislation during the 1990s.

Saskatchewan, Alberta, and British Columbia relied on negotiations to save payroll costs.

In Alberta, the government chose to reduce funding by 20% over a three-year span in the areas of healthcare, education and its own administration. At the same time, the government requested public-sector employees take a 5% wage cut.

In the 1990s, Ontario’s restraint program(s) were the most controversial. First, the NDP government asked that contracts be reopened so that previously negotiated wage increases could be rescinded. Most unions reluctantly re-negotiated, but it was under a governmentimposed deadline after which time the Social Contract Act containing the government’s contract objectives would go into effect.

Second, the newly-elected Conservative government in 1995 enacted other restraint-type legislation (removal of successor rights to facilitate privatization) and negotiated a four-year contract with no wage increases after a five-week strike In a review of the wage restraint programs in the 1990s, Swimmer concluded that, “Governments that achieved reductions through negotiations were just as successful at meeting their fiscal goals as governments that relied on legislated solutions.” .

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. According to your text, which areas of the Canadian economy constitute the public sector? The federal and provincial civil service, municipalities, health care, education, and governmentowned enterprises. (p. 406) 2. Which area within the public sector employs the greatest number of workers? Education (p. 407) 3. Public-sector employment accounts for approximately what proportion of Canada’s total workforce? 22.5% (p. 406) 4. The government has succeeded in reversing public-sector growth rates in the last decade. What three principle methods were used to achieve this? 1) Privatization, 2) contracting-out, and 3) reductions in services. ( pp. 407–408) 5. Provide an example for each of the following: a) privatization b) contracting-out 6. Which area of the public sector has the highest union density? Educational services at 72.4%. (p. 409) 7. Until the mid-1960s, most public-sector employees relied on an employer–employee approach referred to as association–consultation. Describe the features of this model. (pp. 409–411) According to the authors, what led employees to abandon this approach?

8. Explain why the Saskatchewan Trade Union Act passed in 1944 was so significant for publicsector workers in 1944 and again in the mid-1960s. (p. 411) 9. Which province was the first to extend bargaining rights to its civil service employees, and when? Saskatchewan in 1944. (p. 411) 10. When did most employees in the federal civil service win the right to bargain collectively?

Several years after 1963 [1967 to be precise]. (p. 411) 11. When did the province of Quebec extend bargaining rights to its public employees?

1965 (p. 411) 12. What is the most fundamental difference between public- and private-sector employers? Of the many differences listed in the text, students should focus on either the lack of profit motive or the ability to legislate. (pp. 411–412) 13. One of the distinguishing features of public sector bargaining which sets it apart from the private sector is its political element. How do political considerations affect the parties during the bargaining process? (p. 412)

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14. What are the demographic differences between public- and private-sector union members?

Public-sector union members are 60% female, mostly white collar workers, and professionals. (p. 413) 15. Define the term “demographic bulge.” (p. 413) 16. Why is the demographic bulge in the public sector more acute as compared to the privatesector? (p. 413) 17. What reasons do the authors give for the extensive diversity of public-sector collective bargaining legislation in Canada? (pp. 414–415) 18. In general, public-sector collective bargaining statutes differ from the private-sector model in four areas. List the areas and describe the differences found in each. (pp. 414–415) 19. “Public employees should have the right to strike.” Discuss. (pp. 416–422) 20. According to the authors, what is the strongest argument in favour of the right to strike in the public sector? The lack of acceptable substitutes for strikes. (p. 417) 21. One relatively new dispute resolution procedure is the designation model. Describe what it is and how it works. (pp. 418–420) 22. What are some of the operational problems associated with the designation model? (p. 421) 23. The notion that public-sector wage increases have outpaced private-sector increases is a myth.

Do you agree? If so, why; if no, why not? Based on available data this is a myth. From 1979 to 2007, public-sector workers won cumulative wage increases of 261.5% compared to 278.5% in the private sector. (p.425) 24. Do public-sector employees earn more than identical workers in the private sector?

Yes (pp. 423–424) 25. What is the amount (in percentage) of the public–private wage differential? About 5% to 10%. (p. 423) 26. Is the following statement true or false? According to a review of 1980 wage-restraint programs, it was found the number of provincial civil service workers rose during the restraint period. True. (p. 424) 27. Why was the introduction of Ontario’s Social Contract Act so objectionable to union leaders? (pp. 439–440) 28. In terms of the effectiveness of legislated solutions versus negotiations to achieve fiscal goals, what did a recent study conclude? Governments that relied on negotiated solutions were just as successful at achieving savings. (p. 426)

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Beyond-the-text questions 29. Read the opening vignette on pages 403–405 and answer the following question: What do you think contributed to the “high-integrity” labour relations environment that developed in this case? Do you believe that the outcomes would have been different if the employer in this case operated as a private-sector firm? Explain.

Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

30. Do you think it is wise for the government to impose legislation solutions when dealing with labour-relations disputes? Why or why not? What are the short-term implications of using legislated solutions? What are the long-term effects?

31. “The designation model for solving public-sector disputes is truly an absurd example of a Canadian-made industrial-relations solution.” Discuss.

32. In the 1990s, the Alberta government did not impose wage controls through legislation.

However, public employees were asked to accept a 5% wage rollback. In subsequent collective bargaining rounds most groups reluctantly agreed to take rollbacks. Why do you think they agreed?

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Chapter 16

Union–Management Relations in Quebec Chapter Overview The industrial-relations environment in Quebec is unique in many respects. This is due to its distinct origins and the culturally-based factors that continue to shape its evolution. The modern Quebec we have come to know did not progress gradually as was the case with other provinces. It was “shocked” into its present form by what is referred to as the Quiet Revolution (1960). Throughout this period of rapid change, Quebec maintained many longstanding socio-cultural artifacts that are evident today. To begin to understand how the industrial-relations system functions in Quebec, it is necessary to consider three key factors: 1) nationalism, 2) state intervention, and 3) the power and influence of unions.

Chapter 16 begins with a look at the social, political, and economic context within which union– management relations operate in Quebec. The influences of the Catholic Church and the government are discussed in order to establish the origins of government interventionism, unionism, and nationalism in Quebec. Having established the origins of these three key factors, the focus shifts to their evolution over a 100-year period. This is accomplished using a historical backdrop comprising six separate periods demarcated by the various government regimes.

The second part of the chapter deals with the evolution of trade-union pluralism in Quebec. The roots of various labour federations and their structures are explained. In this section, the influence of unions and the extent of their participation in the political process are illustrated along with descriptions of the many labour disputes that have taken place. The difficult relationship between provincial governments and public-sector unions is explored. We learn that, in Quebec, both the Liberals and the so-called labour-friendly Parti Québécois (PQ) governments experienced strained relations with public-sector unions.

The chapter concludes with a look at some distinguishing features of labour legislation in Quebec.

Interesting and unique provisions are explored in such statutes as: 1) the Labour Standards Act, 2) the Charter of Human rights and Freedoms, 3) the Act Respecting Equal Access to Employment in Public Bodies, and 4) the Pay Equity Act.

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Lecture Outline and PowerPoint Slide Special Topics Section Slide 16.1

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Chapter 16: Union–Management Relations in Quebec  If public-sector collective bargaining is a world unto its own, then this statement equally applies in the case of union–management relations in Quebec.  The socio-political and economic environment in Quebec is different than anywhere else in Canada. In short, Quebec is a distinct society and it is distinguished from the rest of Canada by more than mere linguistic differences.

These socio-political and economic differences define the contours of union–management relations, which in turn define Quebec society.

It is essential to consider three key concepts in order to fully grasp the functioning of union– management relations in Quebec: 1) nationalism, 2) government interventionism, and 3) the strength of the labour movement.

The Social, Political, and Economic Context Slides 16.2 and 16.3

Nationalism  Residents of Quebec share a unique sense of identity regarding their provincial citizenship that goes well beyond that which most other Canadians feel about their own provinces. Some would argue this nationalist sentiment predates the British conquest of Canada in 1759.  Nationalism has been encouraged by the political, religious and intellectual elite, and sustained to some degree by the language barrier.

Government Interventionism  The provincial government has always been active in every aspect of Quebecers’ lives. Philosophically, the government has always viewed its role as protector of Québécois values, which justifies its extensive (by comparison to other provinces) intervention in the economy and social activities.  The fact that government activities accounted for 54% of Quebec’s gross domestic product (GDP) in 1995 provides some indication of the extent of the government’s involvement in the provincial economy. By contrast, the Canadian figure in 1995 was 47.9%.

Strength of the Labour Movement  For the rest of Canada, there is a perception that British Columbia unions are very militant and influential in provincial affairs. However, some would classify them as docile or passive compared to Quebec unions. .

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The influence and power of organized labour is a by-product of state interventions. The government regularly includes labour leaders in summits meant to shape the fabric of Quebec society.

Some of the most labour-friendly (progressive) statutes are found in Quebec. This tends to add power to labour unions and federations.

The centralized nature of collective bargaining also contributes to union strength (see chapter 10).

Quebec Socio-political Eras Part 1 Slide 16.4

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Conservative Nationalism (1900–1960)  Until the early 1960s, the Catholic Church dominated nearly every aspect of Quebec’s socio-economic culture.

The church was very influential in shaping many Quebecers’ attitudes and behaviours about industrial relations.  Catholic leaders did not want Quebecers to join international unions because these organizations did not share the language or values of catholic workers.

The church’s fear of socialist values and Marxism among unionists led to the formation of “confessional unions.” These were labour unions dominated by the Catholic Church.

Between 1930 and 1960 confessional unions represented 20%–40% of the union members in Quebec.

In 1924, the Government passed the Professional Syndicates Act which gave workers the right to set up associations and sign legal contracts that could be enforced in courts.

In 1934, the Act Respecting Collective Agreement Decrees was passed. It allowed the minister of labour to give non-union workers the same benefits as unionized workers, provided they were employed in the same economic sector. The rationale for this legislation was to prevent employers from competing on the basis of wages and working conditions in low-wage sectors (see chapter 2).

The Free Trade Agreement, liberalized inter-provincial trade, and lobbying from the business sector has reduced the use of decrees. In 1990, 34 decrees covered 16,094 employers and 142,704 employees. In 2006, this had been reduced to 18 decrees covering 9,034 employers and 79,922 employees.

In 1934, the Liberal government enacted the Labour Relations Code, which gave workers the right to unionize and compelled employers to bargain collectively with certified unions.

However, the return to power of the Union Nationale regime from 1944 to 1960 continued to stifle union growth.

The Quiet Revolution: A Modernized Form of Nationalism (1960–1976)  The Quiet Revolution represented a sort of coming of age for Quebec. Its beginning was marked by the election of the Liberal party in 1960.  What started as a Liberal party election slogan, “Maîtres chez nous” quickly became an ideological mantra that resonated in the hearts and minds of Quebecers.  The modernization of Quebec institutions involved the following: 1) nationalization of hydroelectric companies into Hydro-Quebec in 1962, 2) a new Labour Code extending collective bargaining rights to all public-sector workers in 1965, 3) the establishment of the General Investment Corporation, and 4) creation of the Quebec Deposit and Investment Fund to manage Quebec’s pension plan. .

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Quebec unions experienced unprecedented growth as membership increased by 42.8% between 1963 and 1966. Union density went from 30.5% in 1960 to 35.7% in 1966.

The period between 1960 and 1976 marked a new era of increased government intervention designed to stimulate nearly every aspect of life in Quebec through massive public investments in education, health, road construction, hydroelectricity, and social programs.

Radicalization of the Labour Movement o The radical ideologies adopted by Quebec’s labour movement followed the rise of the separatist movement. o Many labour leaders in the 1970s supported the aims of the newly-formed Parti Québécois. o In the context of Quebec’s social and economic upheavals of the 1970s, numerous labour conflicts took place in the construction and public sectors. o In 1972, labour organizations representing public-sector workers formed the Common Front and staged an 11-day general strike. The government responded with special legislation.

The Quiet Revolution Rekindled: The First PQ Mandate (1976–1985)  In 1976, the newly-elected Parti Québécois renewed the goal of economic nationalism and selfsufficiency.  Measures undertaken included: 1) the nationalization of US-owned Asbestos Corporation, 2) the creation of the Quebec Development Corporation, and 3) the Worker’s Solidarity Fund (see Exhibit 16.2).  Socio-economic summits were held to establish a dialogue between employer organizations, unions, the co-op movement, and community groups.  Soon after being elected, the PQ government demonstrated its commitment to the labour movement by making amendments to the Labour Code. The most significant changes were the inclusion of “anti-scab” provisions (see exhibit 16.3) and first contract arbitration procedures.  Despite these and other attempts, the relationship between the government and public-sector unions continued to be difficult. In the 1979–1980 round of bargaining, the government used special legislation to end a labour dispute.  Following its second election victory in 1981, the PQ government faced a severe economic recession. The necessary fiscal restraints put additional strains on its relationship with publicsector unions. Again, several legislative solutions were used.  The PQ’s use of legislated solutions caused the Quebec Federation of Labour (QFL) to withdraw its endorsement of the government in the 1985 election campaign. Many analysts claim this lack of support contributed to the PQ’s electoral defeat.

Economic Nationalism, Social Contacts, and the Recession (1985–1994)  Following in the path of the defeated PQ, the newly elected Liberals pursued union– management dialogue to improve the competitiveness of private-sector firms.  The minister of labour, who believed in union involvement in the operation of firms, introduced several innovative initiatives such as: 1) amendments to the Labour Code to promote social contacts, 2) the establishment of a program to help the development of work– shareholder co-ops, and 3) tax deductions for employees and employers involved in profitsharing plans.  The Public Sector’s Financial Crisis o The relative goodwill the government established with private-sector unions was not replicated in the public sector. o In 1985, when hospital unions threatened job actions, the government enacted legislation which imposed harsh penalties for doing so (see Exhibit 16.5). These same provisions were used again in 1989 against nurses and hospital workers, who struck illegally. .

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o The recession of 1990 created additional pressures on the government to cut spending. At the time, public-sector compensation accounted for 50% of the provincial budget. o The government was successful in getting unions to prolong their existing contracts by another 30 months, in exchange for a 4% wage increase during that period. However, in the 25th month (January 1993) the government enacted legislation to freeze wages for an additional 2 years and gave employers the right to reduce wages by 1% annually. o These restraint measures were followed by additional legislation to reduce various categories of staff in the public sector between 1993 to1998. However, in the wake of a looming election, the staff reduction plan was abandoned in 1994.

Quebec Socio-political Eras Part 2 Slide 16.5

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The Carrot and Stick Approach and the PQ’s Political Agenda (1994–1998)  The PQ government came to power in the fall of 1994.

One year later, it dealt with the renegotiation of publicsector contracts involving approximately 450,000 workers.  A month before the October 1995 referendum, the government reached an accord with public-sector unions which raised wages and provided additional money for an early retirement program.

After the referendum was lost, the government organized an economic summit with labour and business leaders to obtain a consensus on its objective for a zero deficit. Following the summit, the government announced a restraint program.

When unions refused to accept a 6% wage reduction, the government decided to rely on its voluntary retirement program. Only health and education workers were forced by legislation to accept the wage reduction.

The voluntary retirement program was so appealing 37,000 workers accepted instead of the anticipated 15,000, leading to shortages in certain services.

The Next PQ Mandate (1998–2003)  Quebec’s economy improved in 1998 and, with many contracts expiring in June 1998, publicsector worker expectations ran high. They hoped to recoup the purchasing power they had lost over the past 10 years.  In the summer of 1999, the nurses engaged in a 23-day illegal strike and won some concessions.  Negotiations concluded with all public-sector workers (including nurses) just before Christmas. The agreement included wage increases of 9% over a four-year period ending in 2002.  With an election on the horizon, the PQ persuaded unions to extend their collective agreements an additional year to 2003.

Consolidation and Restructuring (2003–2007)  The Liberals came to power in 2003 with a promise to reduce the role of government.  Grants and subsidies were reduced by 25%, and amendments were introduced in the Labour Code which made it easier to subcontract work.  The most prominent legislative changes were made in the health-care sector. Bargaining units were merged without union consent and decentralized bargaining on various issues was mandated. .

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The Modernization Plan called for a 20% reduction in the size of the public service and the merger of many government services.

Not unexpectedly, the labour movement reacted. This took two forms. First, a show of unity in support of public-sector bargaining was mobilized in hopes of forestalling the government’s agenda. Second, public-sector unions resisted the government’s request for common bargaining approaches by implementing temporary half- and full-day strikes.

While the unions were able to claim some success, the government remained firm and imposed a settlement that looked similar to its opening proposals.

Employer and Employee Organizations Labour Market and Workforce Characteristics  In 2006, 65.5% of Quebecers over 15 years old participated in the workforce and 8% were unemployed. This compared to Canadian rates of 67.2% and 6.3% respectively.  The workforce continues to age with workers over age 55 holding the highest employment rates.  Part-time work increased faster than full-time work.

Trade Union Structure and Membership Slide 16.6

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The Quebec Federation of Labour (QFL)  The QFL is the largest central federation in Quebec. In 2007, it represented 500,000 mostly private-sector workers who accounted for about 43% of all unionized workers.  Currently, its percentage of Canadian Labour Congress (CLC) union affiliates is nearly 100%.  Unlike other provincially based federations in the rest of Canada that enjoy near-monopoly status, the QFL competes with three other major federations (CSN, CSQ, and CSD).

In 1974, the QFL sought and won additional autonomy from the CLC giving them special status. Later, in 1994, the QFL signed an agreement with the CLC establishing sovereigntyassociation. This had the effect of making the QFL an equal partner with the CLC.

Slide 16.7

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The Condéfération des syndicats nationaux (CSN)  The CSN is the second-largest federation in Quebec. In 2006, it represented about 285,000 workers, 50% of which are employed in the public sector.  The CSN was first formed in 1921 as a confederation of Catholic unions. Prior to the name change in 1960, it was called the Confédération des travailleurs catholiques du Canada (CTCC).  The CSN grew rapidly during the Quiet Revolution after collective bargaining rights were extended to public-sector employees in 1965.

During the 1970s, the CSN embraced a more radical ideology which led to a split and the eventual formation of three competing federations.

In 1972 and 1973, three groups pulled away from the CSN to form: 1) the Centrale des syndicats démocratiques (CSD), 2) an independent labour federation, and 3) the Fédération des .

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syndicats du secteur aluminium.

The shift from the quasi-Marxist ideology that characterized the CSN in the 1960s and 1970s to a more pragmatic approach in the mid-1980s was signaled by the CSN’s involvement in the establishment of social contract with SAMMI-Atlas (aluminum plant) and the creation of a worker’s solidarity fund (Fondaction).

Centrale des syndicats démocratiques (CSD)  In 2006, the CSD represented approximately 60,000 workers.  This central labour organization was formed in 1972 when it broke away from the CSN.  Its constitution prohibits affiliation or endorsement of any political party.

The Centrale des syndicats du Quebec (CSQ)  The CSQ represents all categories of workers in the education field, from caretakers to teachers employed at the primary, secondary, and postsecondary levels. In 2006, it represented about 124,000 workers.  The roots of the CSQ stretch back to 1946. It was the first provincial federation under the confessional name Corporation des instituteurs et institutrices catholiques du Canada.  In 1967, it became known as the Corporation des enseignants du Québec (CEQ). In that same year it experienced the first confrontation with the government leading to the first use of special legislation to end a succession of teachers’ strikes.  In the 1970s, the CEQ adopted a more radical orientation and changed its organization from a corporation to a genuine labour organization (the word corporation was replaced with centrale).

Independent Labour Unions  Almost 25% of unionized workers are unaffiliated with any labour federations.  The largest unaffiliated unions include the Syndicat de la function publique du Québec (Civil Service Union) and the various nurses’ associations.

Employer Organizations  There are many employer organizations in Quebec, especially in sectors where decrees exist. In addition, there are Quebec branches of the Canadian Federation of Independent Business (CFIB) and the Canadian Manufacturers and Exporters.  The largest and most influential employer organization is the Conseil du Patronat du Québec (CPQ) formed in 1969.  The CPQ consists of a group of associations and not individual companies. It represents directly or indirectly a collection of companies that employ nearly 70% of Quebec’s labour force. It is the main lobby group for employers in Quebec.

Public Policy on Work Slide 16.8

Labour Standards  Universal minimum wage provisions were first enacted in Quebec’s Fair Wage Act of 1937. In 1940, it was amended and renamed the Minimum Wage Act. Subsequent amendments were made throughout the period between 1940 and 1979.  In 1979, the act was renamed the Quebec Labour Standards Act. .

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This act shares many of the same features found in other provinces, except that it provides protection for workers against unjust dismissal, as do the Manitoba and the federal Labour Codes. In such cases, the Labour Relations Commission renders final decisions and not the Labour Standards Commission.

Amendments made in 1990, 1999, and 2002 have expanded the scope of protection for workers. Some of the more progressive improvements include: 1) various family-related leaves, 2) prohibitions against certain kinds of grandfathering clauses in collective agreements, and 3) protection against psychological harassment.

Pay and Employment Equity  Two common problems with pay discrimination against women stem from inherent flaws in the salary structure and occupational segregation (the pink ghetto phenomenon). Since each aspect is different they require different policy responses.  In the first instance, the problem requires a mechanism to provide equal pay for work of equal value (pay equity). In the second instance, attention needs to be focused on providing equal opportunity.  There are three statutes in Quebec to deal with each form of discrimination: 1) the Quebec Charter of Human Rights and Freedoms(1975), 2) the Act Respecting Equal Access to Employment in Public Bodies (2001), and 3) The Pay Equity Act (1996).  The Charter of Human Rights and Freedoms o This human rights statute is unique in that it defines what constitutes discrimination and identifies two types: direct and systemic. In other provinces these have been determined through a series of challenges and jurisprudence. o As is the case in other provinces, a commission is responsible for overseeing the provisions of the act. o Although the Charter of Human Rights and Freedoms recognized the principle of equality of opportunity when enacted in 1975, it was amended to include a section relating to equal access programs effective in 1985. o Equal access programs remain voluntary for the private-sector employer.  The Act Respecting Equal Access to Employment in Public Bodies o This came into effect in 2001. It covers public-sector employers with over 100 employees. o The Act provides special hiring initiative for members of designated groups and is enforced by the Quebec Human Rights Commission. o Presently, it is too soon to assess the impact of this legislation.  The Pay Equity Act o This came into effect in 1996 and a Pay Equity Commission was created in 1997 to oversee its administration. Enforcement of the act is provided by the minister of labour and appeals are heard by the Labour Relations Board. o Since this legislation was put into effect, significant changes have not occurred.

Occupational Health and Safety  There are two laws that govern health and safety in Quebec; the Occupational Health and Safety Act (1979) and the Worker’s Compensation Act (1985).  Both of these statutes are regulated by the Occupational Health and Safety Commission (CSST).  The workers’ compensation system in Quebec operates much like it does in other provinces (see chapter 9).  The CSST has recognized, in certain circumstances, new forms of workplace hazards such as burnout, stress, and overwork.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. What three key factors need to be considered for one to understand the unique functioning of labour management relations in Quebec? 1) Nationalism, 2) state interventionism, and 3) the political strength of unions. (p. 431) 2. According to the authors, what contributes to Quebecers’ strong sense of nationalism? They are linguistically isolated and Quebec’s political, religious, and intellectual leaders have always encouraged a strong sense of survival among the population.(p. 432) 3. When did government interventionism begin to gain real momentum in Quebec? At the beginning of the Quiet Revolution in the 1960s. (p. 432) 4. Explain why the Catholic Church set up confessional unions. (p. 433) 5. Why were Catholic leaders opposed to Quebecers joining international unions? They feared losing control of schools, hospitals, and the welfare system. Furthermore, they viewed internationals as being sympathetic to Marxist ideology. (p. 433) 6. What were two main goals for establishing the Decree System in 1934? 1) To give non-union members the same benefits and working conditions as unionized workers and 2) to eliminate employers from competing on the basis of wages and working conditions in low-wage sectors. (p. 433) 7. Identify the factors that have contributed to the decline of decrees in the 1990s. (p. 433) 8. Is the following statement true or false? Prior to the 1960s, the Catholic Church discouraged Quebecers from engaging in commercial enterprises because they considered the accumulation of wealth to be sinful. True. (p. 432) 9. When did the Quiet Revolution begin in Quebec? 1960 (p. 434) 10. Explain the socio-economic significance of the slogan, “Maître chez nous.” (p. 434) 11. The goal of “economic liberation” of Quebec was an important component of the Quiet Revolution. What was the first initiative undertaken by the Liberal government that demonstrated a commitment to achieve this goal? The nationalization and consolidation of private hydroelectric companies into Hydro- Quebec in 1962. (p. 434) 12. Why did the government create the Quebec Deposit and Investment Fund? To manage the Quebec Pension Plan. (p. 434) 13. What is the position of most of the major central labour organizations with respect to Quebec’s future place in Canada? They support sovereignty-association. (pp.434–444) 14. The PQ introduced amendments to the Labour Code in the mid-1970s that included antistrikebreaking provisions (“anti-scab”). Under these provisions, is it legal for employers to use existing management personnel to perform the work of striking workers? No (p. 437) .

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15. In the mid-1980s the minister of labour in the Liberal government promoted the practice of “social contracts.” How do these differ from traditional collective agreements? (p.439) 16. What unintended problems did the PQ program of voluntary retirements in the public sector cause in 1996–1997? (p. 441) 17. What is the largest central labour organization in Quebec? The Quebec Federation of Labour (QFL). (p. 445) 18. Discuss the present relationship that exists between the CLC and QFL. (p. 446) 19. What factors led to the ideological transformation within the CSN during the 1980s? (p. 447) 20. Which of the four major Quebec labour federations is officially apolitical? The CSD. (p. 447) 21. The most influential employer organization in Quebec represents directly or indirectly firms that employ about 70% of the Quebec labour force. What is the name of this organization? The Conseil du Patronat du Québec (CPQ). (p. 448) 22. Describe the distinguishing features of Quebec’s Labour Standards Act that set it apart from similar minimum standards statutes in other provinces. (p. 449) 23. In what ways is Quebec’s Charter of Human Rights and Freedoms different from other provincial human rights acts? (pp. 450–451) 24. Explain the principle of pay equity. (pp. 452–453) 25. According to the authors, what has been the effect of pay equity legislation in Quebec? Since its inception in 1996, significant changes have yet to occur. (p. 454) 26. Describe the purpose and scope of Quebec’s Act Respecting Equal Access to Employment in Public Bodies enacted in 2001. (p. 455)

Beyond-the-text questions 27. Please read the opening vignette at the beginning of the chapter on pages 414–416 and answer the following question: In 1972, public-sector unions staged an 11-day general work stoppage to pressure the Liberal government to meet their monetary demands. They also formed what was known as the Common Front. Which central labour organizations were members of the Common Front?

28. Following the federal election, it was suggested by some English-Canadian pundits the Alliance party might join the Block Québécois party to form the next government since the Liberals lacked a majority of seats. Aside from the obvious fact that the Alliance party is viewed as supporting confederation and the Block Québécois party supports sovereigntyassociation, explain what factors would preclude such a merger.

29. The Parti Québécois benefited from the support of big labour at least in the 1970s, and is generally perceived as more sympathetic to unions than the Liberal party. How many times has the PQ used special legislation to solve labour disputes compared to the Liberal party? .

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Challenge Questions The following questions are meant to stimulate debate and critical thinking. As such, they are purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

30. “The Decree System in Quebec is unfair to employers, workers, and unions and should be abolished.” Discuss.

31. Please read Exhibit 16.2 and answer the following question: Do you believe it is discriminatory for the government of Quebec to establish or help establish, using taxes and other incentives, a fund such as The Quebec Federation of Labour’s Workers Solidarity Fund to assist only firms controlled by French-speaking executives? If so, why; if no, why not?

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Chapter 17

Trade Unions and Labour Relations Regimes: International Perspectives in a Globalizing World Chapter Overview A profound shift in the world’s economy has taken place in the last 30 years. This has resulted in fundamental changes in government regulations in the labour market in high-wage countries. The forces of globalization are triggering a shift in attitudes about what the role of government ought to be in regards to economic and social policy. In some countries, the transformation in the role of government has been dramatic resulting in a weakening of national labour-relations systems, while in other countries these systems have remained relatively unchanged. In this chapter we ask: How have various national labourrelations systems responded to the challenges posed by globalization and why have labour movements in some countries done better than others?

The chapter begins by exploring the four major patterns of national labour-relations systems found in highwage countries. The characteristics of each type are provided and international examples are given. In each instance, the evolution or impact of the system on the actors (union, government, workers, and employers) is discussed.

The second part of the chapter deals with the impact of globalization on union density in various highwage countries. This highlights the fact that there is tremendous diversity in the ways that sovereign governments and national labour movements have chosen to respond to pressures such as: 1) international economic integration, 2) corporate mergers, 3) decentralization of collective bargaining, 4) government deregulation of working conditions, and 5) deindustrialization. What follows is a description of the various forms of transnational economic rapprochement such as the European Union and the North American Free Trade Agreement (NAFTA), and the impact each agreement has had on member countries.

The final part of the chapter puts all the pieces together as we look at how globalization has impacted labour. The lessons drawn from other countries are clarified in order to provide a prognosis for Canada.

Having surveyed the patterns of national labour-relations systems in high-wage, developed countries and tracked their evolution in the last 25 to 30 years to determine which ones were weakened, it is possible to glean certain useful lessons for the Canadian labour movement, government, and workers. The comparative analysis of labour-relations systems in the chapter makes it possible to provide four important lessons for Canada.

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Lecture Outline and PowerPoint Slides Special Topics Section Slide 17.1

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Chapter 17: Trade Unions and Labour Relations Regimes: International Perspectives in a Globalizing World  There are considerable differences between national labour-relations systems found throughout the world, despite the economic links between various countries.  A profound transformation of the world economy and nature of work has occurred in the last 30 years, beginning with the corporate mergers of the 1970s.  The forces of globalization have created: 1) transnational convergence in human resources management, 2) government deregulation of the labour market and general economy, and 3) shifts in political attitudes towards the role of government in society.

The impact of globalization has weakened trade unionism in most developed countries and made high-wage markets dependent on low-wage markets and vice versa.

In regards to the pressures of globalization in the last 30 years, this chapter seeks to find out: 1) how national labour-relations systems responded to globalization, 2) why some trade unions fared better in some countries compared to others, and 3) how Canada’s unions and labourrelations system compare to those found in other countries.

Labour Relations in Advanced Industrial Countries: Post-War Patterns Slide 17.2

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A particular country’s labour-relations system is a reflection of its national or regional culture as it has evolved over time.  All national labour-relations systems in developed countries acknowledge and make a place for trade unions.

Some also make space for other organizations that represent unorganized workers.  The end of World War II (1945) ushered in the era of modern welfare and labour-relations systems in Canada.

Sweden, the US, and UK began to develop their system in response to the Great Depression (1929), whereas Germany and New Zealand began in the last decade of the 19th century.

Countries such as Germany, Italy, Japan, and Austria reconstructed their systems under the auspices of the US following World War II. Unions and employer associations predate many national labour-relations systems (see chapter 3).

Four Types of National Labour-Relations Systems  There are many commonalities between various labour-relations systems in developed countries. These may be categorized on the basis of how centralized or decentralized collective bargaining is and the extent of state interventionism in the economy and labour relations.  National labour-relations systems may be classified into four types: 1) corporatism, 2) decentralized marketism, 3) statist micro-corporatism, and 4) regional concentration. .

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Corporatism Labour-Relations System Slide 17.3

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This pattern is found in countries that have multi-party consultative or decision-making institutions to govern labour relations.

It is characterized by a bargaining structure that is centralized, with a government that is active (interventionist) in the economy and labour relations.

This system is found in Germany, Australia (1983-1996), and in Scandinavia. It is also associated with high wages and extensive welfare provisions.

Macro-corporatism  Corporatist systems working at the national level can be bi-partite or tri-partite. A government working with employer associations and unions is an example of a tri-partite structure.  The power of unions and employer associations tends to be centralized at the national level.  This system was used in Australia from 1983 to 1996 under the Australian Labour Party (ALP). However, in the 1990s, the ALP began to liberalize trade, weaken the arbitration system, and decentralize collective bargaining. By 1996, union density had declined from about 56% to less than 30%. Today, it is at 19%.

Meso-corporatism  For this pattern, collective bargaining is centralized at the sector level, while economic planning is done at the state level (macro-corporatism).  The German version uses a “dual system” whereby collective bargaining is carried out at the sectoral level, but works councils and local management deal with daily issues.  In the German model, strikes can occur at the sectoral level, but they are prohibited in the exercise of co-determination. Secondly, unions and management have to represent all constituents whether they are members or not.  Since the reunification in the 1990s, Germany has experienced pressure from the business community which is urging a move away from meso-corporatism.

Decentralized Marketism Labour-Relations System Slide 17.4

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In this labour-relations system, the government plays a minimal role in labour-market regulation and economic policy-making, and unions are rarely if ever given a formal role in the process.  Collective bargaining is decentralized, leaving individual firms and unions free to negotiate relatively unencumbered by the government.  Union affiliation with political parties capable of gaining power is weak, as is union density.

Wages can vary widely between sectors and between union and non-union workers.

Decentralized marketism is found in the US and Canada. It was also prevalent during the Thatcher years (1979–1990) in the UK. .

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Statist Micro-Corporatism Slide 17.5

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This approach is typified by the Japanese system in which the state works closely with industry to find new markets, reduce competition among Japanese companies abroad, and regulate currency. However, labour is not included in the decision-making process at the state level.  The government is involved with workplace-based regulations and companies are organized sectorally.  Core (permanent) workers are organized into company unions that operate at the level of the workplace.

Japanese unions are absent at the national level and are weak at the sectoral level.

Recent economic strains and layoffs have caused some to question the overall effectiveness of Japanese unions.

Although union density has declined, mergers of federations have taken place which could improve their power and influence.

Regional Concentration Slide 17.6

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The last type of labour-relations system is found in France and Italy.  This system allows local or regional municipalities to take control of their economic development with assistance from national governments, who encourage local growth.  Local unions, local employer associations, and local governments collaborate to develop any number of initiatives to benefit their communities.

In Italy, this form has attracted involvement from socialist and communist unions.

Emergence of a New International Work Order   

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The transformation in world economic and political organization that began in the mid-1970s with corporate mergers seems to be leading to an end to the post-World War II pattern of national labour-relations systems.

Increased international economic integration (an element of globalization) has caused manufacturing production to relocate to low-wage regions and governments to reduce involvement in determining labour standards and labour relations.

As corporations continue to shift production to the lowest-wage and least-regulated regions of the world, governments compete for corporate investments by reducing work- and employment-related regulations, making it increasingly difficult for trade unions to organize new members and preserve what they have achieved for exiting ones.

In contrast to manufacturing, the service sector continues to grow in developed countries.

However, the growth is not uniform. While private-services sector jobs grow, employment in the public-services sector (unionized high-paying jobs) declines.

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   

As private-services sector employment increases, corporate reorganization and calls for increased labour market “flexibility” mean there is a proliferation of “non-standard” employment and casualization with less job security.

The spread of “non-standard” employment tenure may contribute to the feminization of employment as the participation rate of women in the workforce has increased while the rate for men has decreased.

Weakened government labour-market regulation, deindustrialization, and casualization of work have been important factors leading to the decline of union membership since the 1980s.

While governments of developed countries have had to face the realities and pressures of globalization, some countries have not moved away from their post-war systems. For example, trade unionism in Scandinavia has not been significantly weakened.

Globalization, Regionalities, and National Labour-Relations Regimes 

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Globalization involves the integration of national economies into common international economic organizations and structures. Globalization is aided by the creation of regional trading blocks, such as the North American Free Trade Agreement (NAFTA), the European Union (EU), or global organizations such as the World Trade Organization (WTO).

Globalization puts direct and indirect pressures on national labour-relations systems and economic systems.

Globalization also refers to the growing influence of transnational corporations on regional and national governments, and the increasing role of non-governmental and non-corporate actors who advocate social justice. Such advocates include the International Trade Secretariats and the international Labour Organization (ILO).

Prior to 1970, national labour-relations systems operated relatively independently in developed countries. National autonomy was supported by international consensus.

After 1970, challenges posed by globalization resulted in the emergence of various arrangements to facilitate the trend toward transnational economic rapprochement.

Patterns of Economic Regionalism Slide 17.7

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The European Union (EU)  The EU represents the oldest and most ambitious system of regional integration.  From its inception, this system of regional integration sought to increase labour mobility and liberalized trade to improve the exchange of products and services.  The EU has concentrated on achieving economic integration over harmonizing social issues. However, it has developed a Social Charter that outlines labour standards and has made some improvements to protect workers.

Although a regional industrial-relations system does not yet exist, over 90 cross-border agreements bring the possibility of Europe-wide collective bargaining closer to reality .

The North American Free Trade Agreement (NAFTA)  Signed in 1992, the signatories to this agreement are Canada, the US, and Mexico.  In contrast to the EU, NAFTA does not include provisions for a common currency or harmonization of economic and social policies. .

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

   

At the insistence of organized labour, a side agreement called the North American Agreement for Labour Cooperation (NAALC) was signed. This agreement includes formal protection for workers and the right to bargain collectively. However, each country is given considerable leeway in observing the regulations.

NAFTA has resulted in a relocation of manufacturing jobs from the US and Canada to Mexico. Moreover, since many of these jobs were unionized, it can be said that NAFTA has impacted the national labour-relations systems of each country.

In Mexico, unions have been struggling to reinstate democratic processes in union practices.

In Canada, NAFTA caused divisions between Quebec unions (who cautiously supported globalization) and their English-Canadian counterparts.

In the US, the agreement pitted the AFL-CIO against the Clinton administration (Democrats), highlighting the lack of influence of the labour movement in the political process.

Trade and Bilateral Accords  The third pattern of transnationalism is characterized by trade agreements and bilateral accords that do not include institutional integration between partners.  An example includes the General Agreement on Tariffs and Trade (GATT).  Such agreements have been the source of much debate and protest by the anti-globalization movement in Europe, North America, Australia, and low-wage countries.  Protesters seek to raise the level of discourse regarding worker rights and the social impact of these agreements.

Globalization and Labour Slide 17.8

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Union Presence  Post-war patterns for union membership may be divided into two periods: from 1950 to the mid-1970s and after the mid-1970s.  During the 1950s to mid-1970s, unions experienced a growth period followed by a period of decline in union density. This decline became more noticeable after 1985.  Countries such as the US, Austria, Australia, France, and the UK experienced the greatest decline in union density (see Table 17.1). In contrast, Scandinavian countries such as Denmark, Sweden, and Norway have either maintained or increased their high union density since the 1980s.

In Canada’s case, union density has remained relatively stable at about 30% for nearly 30 years. This pattern is attributed to the strong growth in public-sector unionization.

Union Influence  The map of emerging labour markets indicates job growth in casual and non-standard employment and the private-services sector—areas where union influence is weakest. At the same time, traditionally highly unionized jobs in manufacturing and in the public-sector are disappearing.  Double polarization is characterized by a decline in the unionized workforce while there is a corresponding increase in casual and non-standard employment. This causes competition between workers in high- and low-wage countries.  There is also a generational divide occurring in high-wage countries where young workers increasingly believe job security is a thing of the past. They are responding to the labour market through alienation, individualism, and cynicism. .

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    

A strong union presence with influence is found in countries where labour has some control of social resources and employers seek to co-opt unions rather than confront them.

The structure of national labour relations allows national union movements to withstand the pressures of globalization, not union ideologies or strategies.

Countries with corporatist-type labour-relations systems experienced the least decline in union density during the 1980s and 1990s.

Countries such as the US, Japan, and France, which have decentralized bargaining, little state intervention, and weak central labour bodies have seen drastic declines in union density.

These trends suggest that globalization weakens national states and laws that regulate labour markets.

Conclusion: Canadian Labour and International Patterns Slide 17.9

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Four conclusions can be drawn from reviewing the international experience: 1. Countries that experienced the greatest decline in union density had labour-relations systems that were similar to Canada. That is, countries with systems characterized by decentralized bargaining, relatively little state intervention, and competing unions were less likely to withstand the pressures of globalization.

2. The direction that Canadian unions are taking is likely to weaken them in the face of globalization. Canadian unions should stop competing among themselves and coordinate their efforts to form a stronger central labour body.

3. Globalization and the influence of transnational corporations weaken national labourrelations systems, but Canadian unions can maintain relevance by focusing on member involvement and making strategic choices.

4. Broad global issues like climate change provide unions with an opportunity to engage communities and citizens in developing and realizing socially equitable climate change.

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Test Items and Class Activities Suggested answers and/or page references are italicized below each question.

Within-the-text questions 1. Define what a national labour-relations system consists of. (p. 461) 2. Labour-relations systems are categorized according to what two dimensions? The centralized or decentralized nature of collective bargaining and the level of state intervention. (p. 462) 3. What are the four major patterns of national labour-relations systems? 1) corporatism, 2) meso-corporatism, 3) decentralized marketism, and 4) regional concentration. (p. 462) 4. Describe the two forms of corporatist labour-relations systems. (pp. 462–463) 5. Describe the characteristics of the decentralized marketism pattern of labour-relations system. In which countries would you find this type of system? The US and Canada (pp. 464– 465) 6. What are the characteristics of the statist micro-corporatism pattern of labour-relations? (p. 465) Which country has this type of system? Japan (pp. 465–466) 7. Describe the regional concentration labour-relations system. (p. 466) 8. In which sector of the economy has the greatest job growth taken place? Private-service sector. (p. 467) 9. What factors have lead to the decline in manufacturing jobs in high-wage countries? (pp. 466– 467) 10. Explain the term “feminization of employment.” (p. 467) 11. Define “globalization.” (p. 468) 12. Discuss the impact of the European Union on national labour-relations systems of member countries. (pp. 469–470) 13. In what ways is NAFTA different in scope and impact from the European Union? (pp. 470– 471) 14. What is the North America Agreement for Labour Cooperation (NAALC) and what purpose does it serve? (p. 470) 15. Why did NAFTA create a rift between Quebec unions and the English-Canadian counterparts? (p. 471) 16. In what way has NAFTA impacted the labour-relations systems of Canada, the US, and Mexico? (p. 471) 17. Define the term “double polarization.” (p. 473) .

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18. What role does the ideology or strategy of unions play in the ability of national union movements to withstand the pressures and effects of globalization? Relatively little; this ability is more dependent upon the structure of national labour relations. (p. 474) 19. According to the author, what is the impact of globalization on union density? (pp. 473–475) 20. Which countries experienced the greatest decline in union density between 1970 and 2003?

Australia, Austria, and the UK (pp. 473–474) 21. In which counties have union densities remained relatively stable? Scandinavian countries and Canada (p. 474) 22. What reasons does the author provide to explain why Canada’s union density has remained relatively stable? (p. 475)

Beyond-the-text questions 23. The author describes how the Thatcher government (1979–1990) was successful in moving Britain from its postwar form of weak corporatism to decentralized marketism through a series of initiatives. This undoubtedly contributed to the globalization movement. In what way did the Reagan government in the US also contribute to increased globalization?

24. Globalization is detrimental to unionism in high-wage countries where the national labourrelations system is not structured in such a way as to resist the pressures of economic convergence and a weakening of government regulations. If this is so, why then did Quebec unions support NAFTA while their English-Canadian counterparts and the AFL-CIO in the US were opposed?

Challenge Question The following question is meant to stimulate debate and critical thinking. As such, it is purposely provocative in nature. The value of the answers by students lies in the way they frame their arguments and positions.

25. “The notion that, once weakened by globalization, national labour-relations systems ought to then be replaced with international or regional labour-relations systems is naïve because it fails to consider the nature of globalization itself. The point of globalization is to remove barriers and regulations that hinder transnationals from thriving. Therefore, successful globalization entails no replacement for weakened or dismantled labour-relations systems.” Discuss.

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Appendix A Fine Family Foods Bargaining Simulation The Fine Family Foods bargaining simulation was developed and used at University of Calgary, Haskayne School of Business, for all incoming management students. It is reproduced with permission of Allen Ponak and Daphne Taras, and it has benefited from the ongoing improvements made by many instructors over the 15 years of its use. It takes about three hours of simulation time in total. We recommend two blocks of 1.5 hours each to give students time to catch their breath and regain a sense of their objectives between bargaining rounds. The retail food industry setting is a real advantage for classroom use, as many students have worked in the grocery industry and have a natural curiosity about its workings. The simulation is easily modified to suit individual instructor's preferences about the work setting, the union, and the specific bargaining issues.

I. FINE FAMILY FOODS: Brief Summary of Exercise • Students are divided into groups of three to five. An equal number of groups are arbitrarily chosen to be either union or management.

• It takes students about two weeks to prepare for the simulation. As soon as groups are formed, students should exchange phone numbers or e-mails, and set up a meeting schedule leading into the week of the simulation.

• Students prepare "Form A" and hand it in to the instructor at the start of the simulation. There is one "Form A" per group. Form A is based on the bargaining zone model.

• Students hand in "Form B", a collective agreement draft, at the end of the simulation. There is one "Form B" per union-management bargaining groups dyad.

• In addition, students may, individually or in groups (at the discretion of the instructor) prepare an essay on the bargaining process, incorporating the text readings with "real-life" experience during the simulation.

• The simulation is also useful in final exam questions. We ask students to discuss as point in the text (e.g. mutual gains bargaining) and use appropriate examples from the collective bargaining simulation to illustrate points.

• The entire exercise follows on the next pages, which we hand out to students two weeks in advance of the exercise.

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FINE FAMILY FOODS COLLECTIVE BARGAINING SIMULATION ADVANCE PREPARATION: Read the background information and the negotiation issues. Familiarize yourself with Steps 1 through 7. Chapters 10 and 11 the Gunderson/Taras text (Sixth Edition) are the most relevant readings on the topic of negotiation and the collective agreement.

INTRODUCTION AND PURPOSE: In this exercise, you will experience some of the dynamics of collective bargaining. The class will be divided into a number of small teams, each representing either the union or management position.

After reviewing the background information, read the role position for your own team and prepare for negotiations. Finally, you will be given the opportunity to actually negotiate a contract settlement with representatives of another team.

In this exercise, you will also be able to observe several things. First, you will be able to understand how members of a negotiating team interact and the problems that they might encounter in working together and how they resolve disagreements amongst themselves. Second, you will experience the process of developing and executing a negotiation strategy in order to achieve your objectives. Third, you will be able to observe how individual differences in negotiation style can affect final outcomes.

Finally, you will be able to comprehend the type of problems and difficulties frequently encountered by union and management groups in their efforts to resolve disputes and establish mutually satisfactory working relationships.

This negotiation will necessarily compress the planning and negotiation periods into an abnormally short time frame. As a result, it cannot encompass an entire contract package, but must only include a few issues. Bargaining is limited to those items on the list of negotiation issues provided below.

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GRADING: A.

Groups: 1. Forms A and B (worth ____ %of your final grade; 50% of this exercise).

Teams will be graded on: i) the quality of their bargaining objectives – are they realistic, well thought-out and clearly written in Form A? ii) the priority given to each issue on Form A – does the priority reflect the fact situation and the objectives of your stakeholders? iii) The quality of the rationales given on Form A to justify the negotiating positions and priorities; iv) The success of their bargaining outcome in Form B; and, v) The quality of the wording in their settlement (Form B). There must not be ambiguities in the writing that would cause the parties to misunderstand the agreement in future. For example, specify whether you mean hourly, monthly, or yearly. When does the year start and end? Do you mean calendar days or working days?

2. Analysis of Outcomes Essay (worth ____% of your final grade; 50% of this exercise).

Note: One essay per team; length of five (5) pages double-spaced, minimum font size = 10pt., plus any financial/ budget/wage appendices.

Teams will be graded on how well they analyze what happened and why in the negotiations. We are not looking for a detailed description or narration of the negotiations themselves. We are looking for an assessment of the outcomes (i.e., what you achieved in the final contract).

Your essay must include the following components: a) objective achieved and not achieved and why; b) i) for management teams – a cost analysis of the settlement on overall wage and other costs before and after settlement of the contract; ii) for union teams – a wage analysis of the monthly or annual change in earnings for all categories—casual, regular part-time and full-time; and, c) expected impact of contract on the union or management (union teams provide impact on the union, management teams assess impact on management) and on the union/ management relationships. Union teams, be sure to assess whether the agreement is likely to be ratified by the majority of the membership.

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B.

Taking into Account Individual Effort and Initiative: 1. Each member of the group will receive the grade assigned to the project, multiplied by the peer evaluation weight given by the group as indicated on the peer evaluation form (last page).

C.

Penalties: 1. Late papers will be penalized.

2. Papers which exceed the specified length of five (5) double-spaced pages (minimum font size = 10pt) will be penalized.

3. Unprofessional papers (containing organizational flaws, spelling mistakes, grammatical errors, etc.) will be penalized.

4. Groups which fail to reach an agreement either because of a 'strike' or 'lockout' will have to write an additional two (2) page letter explaining the reason for the impasse to their natural constituency: the union team will write a letter to the membership; the management team will write a letter to the company President and Board of Directors.

This letter will substitute for the completed Form B. The letter will be graded according to the professionalism, clear communication, and ability to articulate a bargaining strategy.

PROCEDURE: Step 1 The instructor will divide the class into teams of union and management representatives. You will be assigned to a specific breakout room where all bargaining sessions will take place.

Step 2 Once your team has been assigned and you have grouped together to begin planning, review the background information and the negotiation issues. Make sure that you understand all the facts and information presented.

Step 3 Meet with the other members of your union or management team. Plan to do the following steps: 1. Make sure that you understand each of the issues that will be negotiated. If you have any questions, ask the instructor.

2. Select one person to be the spokesperson for the group. Other members of the team may be asked to be a recorder or a spokesperson on a specific issue or play some other role in the strategy and tactics of the team. Try to avoid having the team splinter into multiple spokespersons during the negotiation, as this leads to poor bargaining discipline. It you must communicate during negotiations, use written messages to the spokesperson, or ask for a caucus.

3. Clarify your objectives on each issue. Define for your own team a) the counter-proposal that you will make on each issue ("opening"); .

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b) the point where you would like to settle on each issue ("settlement"); and, c) the point at which you will go no further' on each issue ("resistance"). Prioritize the issues in order of importance. NOTE: There are nine (9) issues to be dealt with.

4. Plan any other strategy or tactics you will use in the negotiation.

Step 4 Give your team's bargaining objectives on each issue to the instructor. These bargaining objectives must be presented on Form A and must indicate the priority of each issue, as well as: 1. your opening position – these will be the opening positions listed in the materials (the "Negotiation Issues").

2. the point on each issue where you would like to settle ("settlement"); 3. the point at which you will go no further – your group's "resistance" point; and, 4. a rationale for why you have chosen these points and why you have given each issue the priority you have.

FORM A MUST BE TURNED IN TO YOUR INSTRUCTOR JUST PRIOR TO THE START OF THE NEGOTIATIONS. Step 5 Meet with the management or union team with which you have been paired. Attempt to arrive at a settlement by the end of the time available.

Use your time wisely. Remember that your team is allowed to call a caucus at any point and may use the second of the assigned rooms in which to meet.

A strike/lock-out deadline for the negotiations is set for __________________________. This may not be extended. Teams failing to turn in an agreement signed by both teams by this time will be asked to submit an additional two-page paper (instead of Form B), explaining to their side (senior management or union membership as the case may be) why a strike/lock-out occurred, their strategy (if any) in going on strike or responding to a lock-out (union) or taking a strike or creating a lock-out (management) and the implications of the strike/lock-out. Teams will still submit an Analysis of Outcomes Essay (see section A.2 above), but this essay will now be based on final positions before the work stoppage or, if available, agreement on issues reached prior to the stoppage.

Step 6 At the end of the negotiation, submit to the instructor the terms of your agreement on Form B using precise language, fully written out and signed by both teams.

If you are in a strike or lock-out position, advise your instructor at the end of negotiations.

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Step 7 By the beginning of the first class following the negotiations, each team must submit: 1. A five page (5) double-spaced (minimum font size = 10pt) summary of their negotiations, briefly outlining what happened and why (using the points in the Grading section of this handout as a guideline for their report).

2. Striking or lock-out teams, must also submit a two-page (2) report (as described in Step 5 above), explaining why the strike/lock-out occurred.

3. Each team must complete and submit to the instructor the peer evaluation form (where applicable).

This form is to be completed and agreed upon by the team.

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FINE FAMILY FOODS: BACKGROUND INFORMATION Fine Family Foods (FFF) is a privately-owned chain of medium size retail food stores. Based in Burnaby, BC, the company operates twenty-three stores in Western Canada. The typical store has about half the floor space of a Safeway, IGA or Loblaws, and no deli, pharmacy or own-label goods.

Each store is run by an owner-manager who has made a significant financial investment in the store.

This manager receives a modest base salary, a share of the profits from his own store and a portion of FFF's overall profits taken in the form of corporate debentures.

In terms of business strategy, FFF concentrates on the high end of the market, placing special emphasis on its meat department, fresh produce and gourmet frozen foods. For example, it guarantees fresh strawberries every day of the year and has the largest selection of Haagen Dazs ice cream in Western Canada. Its employees, most of whom are part-time or casual, are also given an unusual amount of training so that they can serve customers reliably. This training is an important element in the competitive advantage of FFF. The stores are open Monday to Friday from 9:00am to 9:00pm and Saturday, Sunday and holidays from 9:00am to 6:00pm. Christmas is the only day of the year on which the stores are closed.

FFF's business strategy has apparently paid off as the company has shown consistent profits for the past several years, generally about twenty percent (20%) higher than the industry average.

Profitability can vary substantially from one store to another, however, in any given year.

There are six stores in Alberta, four in Calgary and two in Edmonton. Both Edmonton stores and one of the Calgary stores (the South West store) are unionized. The dominant union in the industry is the United Food and Commercial Workers (UFCW) and it represents the great majority of FFF's employees (including the two Edmonton stores). However, the unionized employees in Calgary are represented by an independent local union, namely the society of Associated FFF Employees (SAFFFE).

SAFFFE was initially formed with the blessing of management at about the same time as the UFCW was organizing the Edmonton stores. An organizing campaign was launched by the UFCW in Calgary and it appeared to be attracting support in the South West store, but not in the other Calgary stores. A group of store employees was opposed to the idea of unionism and believed that an independent association would be preferable to an outside union. They ultimately convinced a majority of their coworkers of the benefits of this approach and, with management's tacit approval (compared to strong opposition to the UFCW), SAFFFE was certified by the Alberta Labour Relations Board. This occurred in 1981.

Over the years, SAFFFE has negotiated collective agreements that have mirrored the ones in the unionized Edmonton stores in terms of wages and benefits, but have tended to give management much greater flexibility in operational matters. For example, seniority is not a factor in promotion decisions in the Calgary store, employee schedules can be changed on very short notice, there are fewer job classifications and casual employees have no contract rights at all beyond specification of their wages. On the other hand, SAFFFE dues are only one-quarter of UFCW dues, there has never been a strike (there have been two strikes at the Edmonton stores) and grievances have always been resolved short of arbitration.

Two factors have begun to affect relationships at the South West store. First, FFF has found itself under increasing pressure from a number of large Safeway stores in the area, such as Westhills and .

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Glenmore Landing. These stores have begun stocking more upscale products, competing directly with FFF on price and product. This has forced the South West store to try to reduce all costs, including labour costs, in order to keep their prices competitive. Further price cuts are anticipated. Because of its emphasis on service, management does not believe it has to have lower prices than Safeway, but it knows its prices must be reasonably close or sales will decline. In the past two years the South West store has shown virtually no profit, but it has not lost money either.

Second, there is a renewed raiding campaign on the part of the UFCW, aimed at convincing employees that they would be better off being represented by the UFCW than by SAFFFE. The main pitch of the UFCW organizers is the superior working rights at their stores and their successful resistance to management's demands for reductions in wages and benefits. On the first issue, the UFCW points out, for example, that casual employees achieve regular status after a certain amount of time worked; schedules, once set, cannot be changed unless there is an emergency; employees are paid during training; and, the probationary period is only two months (versus six months under the SAFFFE contract).

On the compensation issue, the UFCW resisted the general round of wage and benefit reductions that swept the industry, arguing successfully that FFF already paid employees less than Safeway or CoOp. A ninety-seven percent (97%) strike vote at the Edmonton stores also helped the union in its negotiations (a strike was averted with a settlement just prior to the strike deadline).

The current leadership of SAFFFE is under great pressure from its members to improve the collective agreement and resist concessions. The leaders have said that if they are unable to do so, they will take a strike vote and, if necessary, accept assistance from the UFCW. The effect of this, in all likelihood, would be to have SAFFFE become part of the UFCW. Management at the South West store would greatly prefer to have its employees stay out of the UFCW as the current arrangement does provide more operational flexibility. However, they are also under great pressure to cut compensation costs as failure to do so would force a rise in prices, making the store uncompetitive. Reducing costs through layoffs or simply not hiring replacements due to attrition (5% per year among regular employees) are not preferred strategies either as a major business advantage lies in the level of service they are able to provide to their customers. One option being seriously considered is a buy-out package through which higher earning senior employees would be provided incentives to leave. They would be replaced by junior employees at lower wage rates. Thus, management's goals in this set of negotiations are to 1) resist SAFFFE demands for contract changes that reduce managerial flexibility; 2) reduce wage and benefit costs by ten percent (10%) while maintaining the same level of staffing; and, 3) avoid antagonizing employees, thus motivating them to join the UFCW. The union's goals, on the other hand, are for a wage increase and substantial changes in contract language to ensure better protection of what they view as employee rights. Failure to achieve these objectives will likely lead to a merger with the UFCW and perhaps a work stoppage. The union leadership wants all employees to join the union as a condition of employment.

The union and the employer have already exchanged their initial proposals. These are provided in Appendix "A". It can be assumed that all other clauses in the contract will remain unchanged.

Information on employment, wages and benefits of those employees covered by the contract are provided in Appendix "B".

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APPENDIX 'A' Initial SAFFFE Bargaining Proposals [Negotiation Issues] 1. Salary Grid New Level Add an additional salary level after 7500 hours for courtesy clerks, general clerks and cashiers; and, after 9000 hours for meat and produce clerks (the salary attached to this new level will be developed through negotiations).

2. Union Membership All employees shall as a condition of employment be required to join SAFFFE and pay dues.

Currently, employees must pay dues but are not required to join SAFFFE. 3. Work Schedule Introduce a new clause that states: "Schedules of work shall be posted by management not later than Saturday noon to cover the following two-week period. The schedule, once posted, shall not be changed."

4. Promotions Replace the current promotion clause as follows: "Promotions into higher paying categories shall be based on seniority, with the most senior employee capable of performing the job receiving the promotion." The current clause states: "Promotions are the exclusive right of management; however, this right will be exercised in good faith."

5. Express Check-Outs Introduce a new clause to read: "Express check-out duties will be rotated, unless otherwise mutually agreed, so that no cashier will be required to serve more than four (4) hours per day in such duties." Currently, there are no restrictions.

6. Training Introduce a new clause as follows: "Training, where provided, shall be at the full applicable pay rate." Currently, new employees undergo three (3) days of unpaid training (8 hours per day) prior to starting and all employees receive one weekend a year of training without pay at a Banff location. However, the company covers all expenses for the Banff training (eg., meals, accommodation, which is approximately $200 per employee per weekend).

7. Wage Adjustment A general wage increase to be divulged in negotiations [please provide %s or #s on your Form A]

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Initial Management Bargaining Proposals [Negotiation Issues] 1. Wage Adjustment A general wage decrease over two years of five percent (5%) in the first year and three and half percent (3.5%) in the second year.

2. Salary Grid (hours) A doubling in the amount of hours necessary for an employee to move from one level to the next level on the salary grid (e.g., 3000 hours would be needed before a new employee would receive a raise; the next increase would then come at 6000 hours, etc.).

3. Voluntary Buy-out A voluntary buy-out package of one week's pay per year of service for employees with twelve (12) years or more of service (25 full-time and 12 part-time employees are eligible; ¾ of fulltime and ¼ of part-time eligible employees are meat or produce clerks; average seniority of those eligible for buy-out is 15 years).

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APPENDIX 'B' Cumulative Hours

Hourly Pay

0 – 1500 1501 – 3000 3001 – 4500 4501 – 6000 6001 upwards

7.00 7.75 8.25 8.75 10.00

0 – 1500 1501 – 3000 3001 – 4500 4501 – 6000 6001 upwards

7.50 9.50 10.75 13.75 16.25

0 – 1500 1501 – 3000 3001 – 4500 4501 – 6000 6001 – 7500 7501 upwards

10.00 10.70 12.09 13.59 16.00 18.00

Casual EEs

Avg. Reg. P-T Avg. Hrs EEs Hrs COURTESY CLERKS 40 600 5 700 20 2100 10 1600 0 5 3500 0 0 0 0 GENERAL CLERKS/CASHIERS 20 600 10 800 20 1600 15 1600 0 20 3500 0 15 4700 0 10 7500 MEAT/PRODUCE CLERKS 5 500 5 900 5 1600 0 0 5 3600 0 5 4800 0 5 7000 0 5 10000

Reg. F-T EEs

Avg. Hrs

0 0 0 0 0 0 0 5 5 10

4200 5000 18000

0 0 0 10 5 20

5000 7000 18000

NOTES: 1. Regular full-time employees work forty (40) hours per week; regular part-time (P-T) employees work twenty (20) hours per week; and, casual employees work an average of eight (8) hours per week, but have no guarantees of minimum hours. It can be assumed for casual employees that the work is spread evenly through the various salary levels (based on 52 weeks per year).

2. Courtesy clerks are restricted to the following duties: a) handling shopping carts; b) bagging and sacking; c) general clean up; d) merchandise returns; e) price checks; and, f) take-out service to customers. General clerks perform all other clerk duties except in the meat and produce departments.

3. Based on industry averages, it is estimated that between half and two-thirds of employees eligible for buy-outs (see Management Proposal #3) would accept a buy-out package.

4. The 'Average Hours' column in the chart above represents the average cumulative employment history total for the employees in that category.

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FORM A Collective Bargaining Simulation Bargaining Objectives for Team Number __________ Mgmt

Union (Circle one)

Team Members: _____________________________________________ ___________________________________________________________ For each of the following issues, indicate your OPENING DEMAND, your desired SETTLEMENT POINT and your RESISTANCE POINT. As well, provide a rationale for your objectives and the priority you have given each issue.

Issue: Salary Grid (New Level)

Priority: ________

Opening: Settlement: Resistance: Rationale: Issue: Union Membership

Priority: _________

Opening: Settlement: Resistance: Rationale: Issue: Work Schedules

Priority: ________

Opening: Settlement: Resistance: Rationale:

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Issue: Promotion

Priority: ________

Opening: Settlement: Resistance: Rationale: Issue: Express Check-out

Priority: _________

Opening: Settlement: Resistance: Rationale: Issue: Paid Training

Priority: ________

Opening: Settlement: Resistance: Rationale: Issue: Wage Adjustment

Priority: ________

Opening: Settlement: Resistance: Rationale: Issue: Salary Grid (Hours)

Priority: ________

Opening: Settlement: Resistance: Rationale: .

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Issue: Voluntary Buy-out

Priority: ________

Opening: Settlement: Resistance: Rationale:

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FORM B Collective Bargaining Simulation Collective Agreement Reporting Form Labour Team Number: ______________________ Management Team Number: _________________ For each of the following issues, provide a written description of where you settled (i.e., what the terms of the collective agreement between labour and management will be for the next term of the collective agreement). Write the clause using contract language (i.e., clear, specific, fully-written, etc.).

Issue: Salary Grid (New Level)

Issue: Union Membership

Issue: Work Schedules

Issue: Promotion

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Issue: Express Check-out

Issue: Paid Training

Issue: Wage Adjustment

Issue: Salary Grid (Hours)

Issue: Voluntary Buyout

___________________________ Signed on Behalf of Management

_________________________ Signed on Behalf of Labour

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PEER EVALUATION Each group may submit one (1) peer evaluation. This evaluation is designed to serve as an incentive for all group members to contribute equally to the final product. All contributing group members are required to sign the evaluation. If no peer evaluation is provided, it will be assumed that each member of the group contributed equally.

E.g.

Contribution Member #1 Member #2 Member #3 Member #4 TOTAL

110 95 95 100 400 Points

Group Grade x Contribution 80% x 110% 80% x 95% 80% x 95% 80% x 100%

Individual Grade 88% 76% 76% 80%

PLEASE NOTE: 1. The maximum allowable contribution for any one group member is fixed at 110%.

2. The minimum allowable contribution for any one group member is fixed at 80%.

3. A group of three (3) contributing members must distribute 300 points amongst themselves.

A group of four (4) contributing members must distribute 400 points amongst themselves.

A group of five (5) contributing members must distribute 500 points amongst themselves.

4. If one group member contributes nothing, he/she will receive "0" and the group must adjust its total allotted points to reflect a lower number of members.

GROUP SIGNATURES:

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Appendix B Arbitration Cases and Simulations Suggestions for Using Arbitration Cases Some instructors may wish to add arbitration cases to supplement learning.

1. Students could be asked to read a case and discuss it in class. The different treatment of union and nonunion employees could be highlighted in class discussions. In addition, students could practice issue identification.

2. Students could take advocacy positions in class. We found that 10 minutes per side (union or management), followed by a 5 minute rebuttal during which each side can rebut the argument of the other side (without repeating any of the main arguments they raised in the 10 minutes -- this "no repetition" rule is difficult, but worthwhile). The class then votes on which side wins, with a discussion of rationales.

3. Students could write papers on the cases. An example is offered for Case 5 ("The Straw that Broke the Camel's Back”). The instructor can devise a series of questions for students to answer in analysing the case. One of the most helpful directions of an instructor is the insistence that students devise a timeline of incidents. This adds greater discipline to their subsequent analysis of the case.

4. In more advanced courses, or courses with a stronger focus on arbitration, we have held "mock arbitrations" and had students present cases before a panel of actual arbitrators, who score the presentation on selected criteria (logic of arguments, use of similar cases based on research, advocacy skills, ability to rebut other side, etc.) and then issue their award.

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Cases 1 & 2: "Christmas Greeting" and "Arnold Long" [Cases 1 & 2 were developed by Allen Ponak, University of Calgary]

Teaching Notes: Both cases involve the unauthorized removal of materials from the worksite.

Appropriate Use of these Cases for Teaching These cases were designed for general in-class discussion. They can be read in five minutes during class, or in advance of the class. They can be studied separately, or as a set of two cases involving similar fact situations.

Issues for Class Discussion •

The role of the specific industry in ascertaining the seriousness of the offence. In the retail grocery industry, there generally is a strict policy against theft. Theft of any amount (even a few cherry tomatoes or a snack bar or an old muffin) results in dismissal. The standard might be different for damaged materials at a construction site.

• Is the employee aware of the company policy on theft? Has it been communicated clearly and consistently? Have all employees been treated in a fair and even-handed way?

• Employee surveillance and compulsory inspection. Can the company insist on inspecting her purse? Is she aware that she is under surveillance?

• The importance of a union shop steward in disciplinary interviews. Can the company interview Grovchuk or Long without union representation?

• Credibility issues. Grovchuk might have been credible without the "PAID" stickers. Even with the "PAID" stickers, she might be credible if she can demonstrate a convincing reason to have the stickers. Long's theft was at the behest of a friend.

• The role of years of seniority: If she has 22 years of service, will this be treated as more or less serious than if she has only 2 years of service?

• The role or prior performance records: If she has 22 years of outstanding service, will this be treated as more or less serious than if she has 22 years of checkered performance including a prior disciplinary record involving theft.

• What are the next steps?

• Can the union grieve the discipline and possible dismissal? What are the grounds? In a case of this nature, the union usually takes the following approach: (1) There was not just case for the dismissal; (2) Even if there was just cause for discipline, dismissal was too harsh under the circumstances and the arbitrator should substitute a lesser penalty; (3) The grievor has learned her lesson and will never do it again. There are mitigating circumstances that the arbitrator should consider (e.g. many years of seniority, prior excellent performance, remorse and confession, significant stress due to personal life, and so on).

Arbitrator's Decisions In both cases, the grievors' dismissals were upheld. Ms. Grovchuk was not credible in her explanations. Mr. Long's act was premeditated.

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Case 1: Christmas Greeting Sally Grovchuk has worked for a large national grocery chain in Newfoundland for 22 years with a clean work record. She is a general clerk whose job is to stack shelves and assist customers.

On the day in question, Grovchuk was near the end of her shift. She went to the gift section and picked out a Christmas card and some wrapping paper. The total cost of these items was $5.00. With the items in hand she went upstairs to the employee locker room, collected her purse and other personal items and went back downstairs. She was holding the card and wrapping paper. She then walked out of the store without stopping to pay for the items, going by a dozen check out counters in the process.

Unknown to Grovchuk, she had been observed by an undercover security officer. He watched her take the card and wrapping paper from the shelf and walk out of the store. He followed her to her car.

As she got in, he tapped on the window, identified himself as a store security officer, and asked Grovchuk to come back into the store with him. He said that Grovchuk looked frightened, averted her eyes, and didn't say anything, but she followed him into the store.

After returning to the store Grovchuk was interviewed by the store manager and the security officer.

She seemed to regain her composure and explained that she had been in a hurry and had simply forgotten to pay for the items. She asked, "Haven't you ever forgotten to pay for something? Is it a crime to be forgetful?"

Grovchuk was asked to empty her purse. Inside was a role of bright red store stickers with the word "PAID" on each sticker. These stickers are used to mark items that customers bring into the store from the outside to indicate that they have already been paid for. The stickers are kept at the customer service desk; Grovchuk did not use them in her own work. She swore that she had no idea how they had gotten in her purse and denied that they belonged to her. She began to weep.

The store manager ended the interview at this point. He confiscated the gift wrap, Christmas card, and role of stickers and told Grovchuk he would contact her after he had considered all the facts.

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Case 2: Arnold Long Arnold Long is a municipal employee. He drives a sewage truck and has worked for the municipality for two years. On the day in question he is assigned to an excavation site. Upon arrival, he parks his truck near to the equipment trailer. While the rest of the employees are on a break, Long enters the equipment trailer and removes three pieces of plastic pipe worth approximately $50.00 when new.

He walks from the equipment trailer to his truck and places the pipe in the back of the truck.

Unknown to Long, he is observed by another employee. Long is not authorized to be in the equipment trailer and has absolutely no use for the plastic pipe in his own work. After placing the pipe in his truck, Long drives to another part of the excavation site where his sewage truck will actually be used.

The employee who observed Long reports what he saw to the site foreman. About 15 minutes later the foreman walks over to Long's truck and asks Long whether he "has anything for him". Long reaches into the back of the truck and says, "Oh, you mean these" and hands the 3 pieces of plastic pipe to the foreman. Long admits taking them without authorization stating "I didn't think anyone would mind". Long admits he intended to use the pipes to help a friend do work on his house. The friend had asked him to find and take the pipes from work.

The foreman reports the incident immediately to his supervisor.

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Case 3: The Man from Nair Teaching Notes This case involves a grocery store employee who substitutes the contents of a bottle of children’s' shampoo with Nair hair remover.

Appropriate Use of this Case for Teaching This case is suitable for mock arbitration hearings in which students must take an advocacy position before an arbitration panel (or professor). It is a relatively simple case in which the students' ability to craft persuasive arguments will carry the day. The case is dramatic, and compelling. It is also based on a real case.

Main Points The two main teaching points deal with (1) whether dismissal is too harsh, and (2) whether there are sufficient mitigating factors that would persuade an arbitrator to substitute a lesser penalty. Clearly management has just cause for some form of discipline. For students who take the Union position, it is important to admit the seriousness of the offence, but to argue for reinstatement. It would be unwise for the Union team to argue that the behaviour was not culpable.

Employer Argument The employee's action was tantamount to sabotage, involved the destruction of company product, had the potential of placing customers at serious risk and opened the company to liability and loss of consumer confidence. The trust inherent in an employment relationship has been irreparably breeched.

Union Argument The Union acknowledges that the Grievor's actions were foolish, but takes the position that there was no malicious intent, the Grievor never concealed his actions and the act itself was a momentary aberration; thus, dismissal was too harsh a penalty in the circumstances. The Grievor was not irredeemable. The misconduct was not sabotage, but rather, horseplay. The Union urges the arbitrator to consider mitigating factors: sixteen years of service, good record, financial hardship of his loss of work. The Union asks the arbitrator to reinstate the Grievor, conceding even a period of suspension might be warranted.

Arbitrator's Award This is an actual 1997 case issued by Ponak. The case is unreported, and because of the grievor's likely desire for confidentiality, we prefer not to give the citation. The decision follows: "It is my decision to reinstate the Grievor in his employment effective the date of this award, but without compensation. This means that the Grievor will have served a suspension without pay in excess of one year.

In reaching this decision, I have rejected the Employer's argument that the Grievor engaged in actions that constitute sabotage. I find no evidence to support the notion that the Grievor deliberately set out to harm the Employer or the public. There was an absence of malicious intent… Rather, I conclude that the .

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Grievor's actions were an impulsive response to a suggestion raised by a co-worker. This is not meant to downplay the gravity of what the Grievor did. His actions were incredibly foolish to say the least… and unacceptable no matter what the intention. In the final analysis, we are left with an impulsive, extremely ill-conceived act that fortunately did little real harm. It resulted in the destruction of two bottles of company product of relatively minor monetary value. The company rightly views destruction of its product as a serious matter. The act created a potential of public risk, but I have concluded that the risk was remote. The Grievor, after some initial evasiveness, admitted what he had done. He has sixteen years of service in which this incident appears as a momentary lapse. In view of all the circumstances, it is my conclusion that discharge would be too harsh a penalty. [Mitigating] factors are present in the current case and support my decision to reinstate.

Finally, in reinstating the Grievor, I am satisfied that the lengthy suspension (over one year) will send a strong message of deterrence to the Grievor and to other employees. The kind of conduct in which the Grievor engaged is totally inappropriate; employees who engage in such conduct are risking their employment.

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Case 3: The Man from Nair [This case was developed by Allen Ponak, University of Calgary] Bill Bloggs, age 34, has been working in the warehouse of the well-known supermarket chain for 16 years. During this period he has been disciplined one time, 14 years ago, for failing to call in when absent due to illness. On that occasion he had in fact been out partying and had stayed home with a severe hangover. He received a one-day suspension without pay for that incident. Since then he has had a clean work record and is considered an average employee. Bloggs is married and has two young children. His wife stays home and cares for their children. He has a high school education, the warehouse is unionized, and he earns $16.00/hour.

Bloggs' duties involve preparing small containers of goods for delivery to supermarket shelves. He works in a crew with four other employees, often on the night shift where there is little supervision.

Crew members work in close proximity of each other. Since the work is straightforward, the night crew is given the responsibility by management to get the job done right.

One night the crew was preparing a number of containers of personal products (e.g. deodorant, shaving cream) for delivery to the supermarket the next day. As was often the case, crew members, including Bloggs, were discussing various matters as they worked. One of Bloggs' co-workers told a story he had heard about how a warehouse worker in another company had been upset with management and to get back at the company had secretly mixed hair remover with shampoo. The coworker didn't know what had happened or even if the contaminated product has actually gone out to the supermarket.

Upon hearing that story, Bloggs chuckled and said, "let's see how it's done". He grabbed a bottle of Nair hair remover from the shelf next to him and then walked down the aisle until he came to the shampoo section. He then poured out some of the shampoo, replaced it with Nair, put the cap back on, and placed it in the container of one of his co-workers. Bloggs was laughing out loud the whole time. He then turned his back and went back to work, chuckling to himself.

His co-workers were not amused, especially since the bottle that Bloggs had grabbed turned out to be children's shampoo. They discussed the incident among themselves and one of the employees volunteered to get rid of the contaminated bottle. He took the bottle to the back of the warehouse and threw it into a dumpster. He also disposed of the opened Nair bottle. One of Bloggs' co-workers then went to him and told him what he had done was incredibly stupid, considering the damage if the contaminated shampoo had ever actually reached a supermarket shelf. Bloggs didn't say anything, he just kept on working.

One member of the night crew was very upset about the whole affair and reported what had happened to management the next day. Bloggs was called into the manager's office that night and asked what had happened. At first, he denied doing anything, but when told that a co-worker had reported the matter, he admitted what he had done, saying it was a dumb thing to do and only meant as a joke. He offered to pay for the ruined bottles and apologized. The manager suspended Bloggs without pay, pending investigation.

Bloggs' employment was terminated, and the union grieves the dismissal. The matter goes before an arbitrator.

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Case 4: Acme Distribution Ltd. & United Moving Workers (UMW) The Tom Yancey Grievance [This case was developed by David McPhillips, University of British Columbia]

Teaching Notes This is a more complex case involving the interpretation of contract language. Students should carefully set out the facts in terms of the number of hours of seniority of both Yancey and Petersen.

This case may particularly appeal to accounting students.

Acme Distribution's distribution centre (17 employees) was certified by the United Moving Workers (UMW) on January 31st. After a lengthy period of bargaining, the parties signed their first collective agreement on August 1st. The Agreement was made retroactive to February 1st and is in effect for three years. The relevant provisions of the contract are attached in Appendix 1.

Tom Yancey began his employment with the Company on February 1st of this year. From that period to the present, Mr. Yancey has worked as a 'casual' driver. On September 30th, the company posted the casual seniority list as required under Article 6.01.3 of the Collective Agreement. The list stated TomYancey Mary Petersen Bill Korbin

741.5 hours 740.0 hours 615.0 hours

On October 1st, Mr. Yancey was called in to replace Jacques Toupin who was the regular driver on Route 21. However, after the shift had started, three of the four customers cancelled their orders and, as a result, the work was completed in about three hours. Mr. Yancey returned the truck to the depot and asked for instructions. The Company indicated to Mr. Yancey that he should go home and he would be paid for four hours according to Article 8.02.2 and he was credited four hours for his seniority. On that day, Mary Petersen, who had begun Company employment on February 15th, had also been called in to work and replaced Karen Souls en Route #33. That day, Ms. Petersen worked a full 7-1/2 hour shift.

On the evening of October 1st, a full-time driver, Max Thomas, was killed in a car accident away from work. The Company posted a vacancy for his full-time position the next day at 8:00am. On October 2nd, Ms. Petersen was called in as a casual to replace Mr. Thomas for his full shift. She became quite ill over the weekend and on Sunday, October 4th, she called the Dispatcher to indicate that she could not work the next two days. On October 5th and 6th, Mr. Yancey was called in to replace Mr. Thomas. At the end of the shift on October 6th, Mr. Yancey submitted his application for the posting as he was going on vacation beginning the next day. The vacation had been scheduled for months and the Company had been advised. Ms. Petersen replaced Mr. Thomas on October 7th and submitted her application for the job at the beginning of her shift that day.

On October 9th, the posting for the full-time position was taken down and there were only the two applicants, Ms. Petersen and Mr. Yancey. As both drivers were considered competent to perform the work, the Company posted a notice on October 13th, indicating that "As Mary Petersen was the most senior casual employee, she was the successful applicant for the new full-time position."

The Company has records that indicate that casuals who replaced workers on full-time routes had been sent home early with four hours pay due to cancellations on six occasions in the last year, specifically February 10th, February 27th, April 9th, August 4th, September 10th and September .

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23rd. The Union executive has indicated it was unaware of those facts. The Company claims the Union should have known from general discussions in such a small workplace and, in any event, the Union receives the work records along with the Union dues each month.

Mr. Yancey filed his grievance on October 15th, claiming that "I was the most senior employee at the time of my application. Further, I was improperly denied four hours of seniority on October 1st.

Therefore, I should have been awarded the full-time position."

The Union has taken both grievances to arbitration and claims Mr. Yancey should have been given the full-time position.

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APPENDIX 1 RELEVANT PROVISIONS OF THE COLLECTIVE AGREEMENT ARTICLE 6.00 – SENIORITY 6.01

SENIORITY DEFINED

6.01.2

Seniority for full-time employees will be calculated from the first day of employment with the Employer as a full-time employee. Full-time employees shall be senior to casual employees.

6.01.2

Full-time employees shall be those employees who work thirty-seven and one-half (371/2) hours per week on a full-time basis.

6.01.3

Seniority for casual employees shall be determined on the basis of total hours worked from their date of hire. If two or more employees have an equal number of hours, the employee with the earliest date of hire shall be deemed to be the senior employee. The Employer agrees to post the casual seniority list with total hours worked for each employee on the Union Bulletin Board on a quarterly basis.

6.01.4

Casual employees shall be those employees who work less than thirty-seven and one-half (37-1/2) hours per week.

6.01.5

For the purpose of call-in, casual employees shall be offered work on the basis of their seniority. When there are two or more employees on probation, the Employer reserves the right to call in employees outside of their seniority in order to determine suitability.

6.01.6

Casual employees shall accrue seniority for a period of one (1) year while off work due to compensable injury. For this purpose, hours worked shall be calculated as the average hours worked per day in the month preceding the work related injury.

6.02

SENIORITY LISTS

6.02.1

The Employer shall maintain two (2) separate seniority lists showing the date each employee commenced employment with the Employer. The two separate seniority lists shall be as follows: 1. Full-time employees 2. Casual employees.

An up-to-date seniority list shall be sent to the Union office in January of each year which shall include employees' names, addresses, telephone numbers and dates of hire.

6.03

ASSIGNMENT TO WORK – CASUAL EMPLOYEES.

6.03.1

The assignment of casual work shall be assigned on the basis of seniority to casual employees subject to the employee's availability and ability to perform the work.

6.03.2

In order to maintain seniority, a casual employee must not refuse work on more than five (5) separate occasions in one month. By mutual agreement between the Employer and the Union, this provision may be waived in special circumstances. .

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6.04

PROBATION FOR NEWLY HIRED EMPLOYEES

6.04.1

New employees shall be subject to a sixty-six (66) working-day probationary period. The probationary period may be extended by mutual agreement between the Employer and the Union, but in no circumstances shall the total probationary period exceed one hundred thirty-two (132) working days or six calendar months, whichever comes first.

6.04.2

Probationary employees subject to this Article shall have full rights to the grievance procedure set out in this Agreement.

6.05

LOSS OF SENIORITY

6.05.1

An employee shall lose seniority in the event the employee a) is discharged for just cause; b) voluntarily terminates; c) is absent from work in excess of five (5) working days without acceptable cause to the Employer; d) is on lay-off for more than twelve (12) months.

ARTICLE 7.00 – LAYOFF AND RECALL 7.01

In the event of layoffs, such layoffs shall be in reverse order of seniority. An employee with greater seniority shall have the right to displace an employee with less seniority providing the employee is capable of performing the work. Casual employees at the bottom of the seniority list will be laid off first. Full-time employees shall be given fifteen (15) working days notice of layoff or pay in lieu of notice. Full-time employees shall have the option to accept the layoff or revert to the most senior position on the casual seniority list. They shall retain their seniority and be eligible for recall as follows.

7.02

RECALL

7.02.1

Employees on layoff shall be recalled in order of seniority.

7.02.2

NOTICE OF RECALL Notice of recall shall be made by telephone or, if unsuccessful, by double registered mail to the last address of the employee known by the Employer. Such notice shall be deemed to have been received within five (5) working days of double registered mail delivery and on such recall, the employee shall contact the Employer immediately receiving such notice from the Employer.

If an employee does not contact or accept the recall within the time limits provided the Employer will view the position vacant.

7.02.3

CURRENT ADDRESS It shall be the responsibility of the employee on the recall list to keep the Employer informed of the employee's current address. .

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ARTICLE 8.00 – HOURS OF WORK 8.01

REGULAR WORK WEEK

8.01.1

The regular work week for full-time employees shall consist of five (5) consecutive days worked followed by two (2) days of rest.

8.01.2

Casual employees shall not be required to work more than five (5) days in any seven (7) day period.

8.02

REGULAR WORK DAY

8.02.1

The regular work day for full-time employees shall be seven and one-half (7-1/2) consecutive hours per day with an additional one-half hour unpaid lunch period.

8.02.2

Casual employees shall not work less than four (4) hours per day.

8.03

PRE-TRIP INSPECTION

8.03.1

In addition to travel time to first pick-up, drivers shall be allowed time required to complete the pre-trip inspection, pick-up trip sheets and discuss any changes with dispatch.

8.04

SCHEDULING OF HOURS

8.04.1

The regular work day shall not commence prior to 6:00am. All regular shifts will finish by 12 midnight. Each full-time shift shall have established start and finish times and will only be adjusted by mutual agreement between the Employer and the Union.

8.05

REST PERIODS

8.05.1

All employees shall receive a fifteen (15) minute paid rest period within each four (4) hours, or major portion of, on a shift.

8.06

MEAL PERIOD

8.06.1

Meal periods shall be provided as close as possible to the middle of the shift. The length of the meal period shall not exceed thirty (30) minutes.

8.07

REPORTING OF INABILITY TO WORK

8.07.1

If an employee is unable to report to work due to illness, the employee must notify the Transit Manager by telephone, prior to the start of the working day.

8.08

SELECTION OF SHIFTS

8.08.1

All full-time drivers' shifts shall be posted for a period of ten (10) working days prior to March 1st and September 1st each year. Drivers will exercise their seniority in choosing whatever shifts are available. Unless there is an emergency, no position changes will be allowed other than on March 1st and September 1st.

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If a shift becomes vacant between sign-ups, the provisions of Article 14.00 (Promotions and Transfers) will apply.

8.09

INCLEMENT WEATHER

8.09.1

If the Employer notifies the employees of cancellation of work due to adverse weather conditions, all full-time employees shall be granted full pay for time lost.

ARTICLE 13.00 – PROMOTIONS AND TRANSFERS 13.01

POSTINGS

13.01.1

In the event that a full-time vacancy occurs, the position will be posted for one week.

13.02

SELECTION OF EMPLOYEES

13.02.1

When selecting a full-time employee, the Employer will choose the casual with the most seniority, provided the employee is able to perform the work in a competent manner.

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Case 5: The Straw that Broke the Camel's Back Teaching Notes This is a more complex case involving the interaction between a grievor with an alleged "attitude problem" and her workplace, including customers, co-workers and supervisors. The intriguing element in this case is that the grievor's actual work performance in the essential duties of her job was not particularly problematic.

The main facts of the case are drawn from an unpublished 1995 arbitration award issued by Ponak, with some minor embellishment to make the case slightly more readable and interesting to students.

Because the case includes sensitive information, we do not give the citation. The case was decided by a three-person arbitration board.

How to Use this Case It is a good idea to have students draw a time-line of incidents in order to organize their thoughts.

Students generally need to be prompted to do this type of analysis, and it usually pays off in a higher quality, more disciplined and better argued analysis.

Note that there are "red herrings" in the embellished case pointing to human rights issues, but there are no significant human rights considerations.

A suggested assignment is offered on page x, with a structured question and answer format provided for students. Alternatively, this case could be used to create written assignments in which students practice constructing a union or employer written submission to an arbitrator, or in drafting an arbitrator's award. We find it a bit too complex for use in "mock arbitration" proceedings.

Possible Union Arguments • Termination letter refers to June 7th incident only.

• No culminating incident if June 7 incident non-culpable.

• Lack of discipline means behaviour condoned.

• Management "boot strapped" the employment history by arguing that there was a culminating incident. Management tried to enter the total employment record to make the grievor look bad, when in fact, the grievor's work history was quite strong based on actual performance of the essential functions of the job.

• Lack of progressive discipline.

• No opportunity for grievor and union to challenge allegations, because no discipline was taken prior to the dismissal.

• Grievor received award and commendations. These sent a conflicting message that was confusing to the grievor.

• The grievor's behaviour during the grievance meeting was not relevant.

• Ordering EAP attendance was inappropriate.

• The grievor could have benefited from counselling, but was never given a chance.

• Psychologist recommended a transfer, not dismissal.

• Investigation was made without the grievor's knowledge.

Possible Employer Arguments • Persistently inappropriate behaviour. .

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• Previous incidents form a pattern of behaviour.

• Grievor continues to deny the problems, and a change of behaviour is unlikely.

• The pattern of behaviour was unchanged, and the grievor's response was quite retaliatory.

• Counselling, meetings and letters clearly indicated problems and expectations which the grievor rejected.

• The attitude problems reflected in "a lot of little things" which together make it difficult for customers, co-workers and supervisors. Some of these "little things" go to the heart of the job duties.

Arbitrators' Decision Students are anxious to learn what happened in the actual case. This case could have gone either way —it is one of those cases over which arbitrators really agonize. When this case was given out in an MBA program, most students reinstated the grievor. There is no right answer. Rather, it is a question of anticipating and constructing lucid arguments.

One of the critical features of the case is the conduct of the Grievor at the arbitration hearing, something that students could not experience, and it may affect their tendency to decide to reinstate the Grievor.

The actual arbitration decision held that: "I am more persuaded by the version of events provided by the various Employer witnesses rather than that offered by the Grievor [because she was unable to recall events that were contrary to her interests, the compelling evidence of the written exhibits, detailed management notes, and so on.]

Accordingly, it is my finding that: 1. The Grievor engaged in culpable conduct on June 7, 1994 when she grunted at her manager in response to a normal greeting.

2. The Grievor engaged in culpable conduct on June 1, 1994 when she asked her supervisor whether he expected her to "stand up and salute" (while the Grievor said she was joking, she did not present herself as a jocular individual; rather she had a demonstrated tendency towards sarcasm.)

3. The Grievor engaged in culpable conduct on May 25, 1994 when she ignored her supervisor as he was leaving and responded to him abruptly when he requested an acknowledgement.

4. The Grievor was uncooperative and negative towards co-workers over an extended period of time.

Her behaviour provoked anxiety among fellow employees and created stress in the department.

She received counselling, but no discipline, for this behaviour.

5. The Grievor was insolent, rude and sarcastic towards her supervisors over an extended period of time. She received counselling, but no discipline, for this behaviour (until the incidents of May 25th, June 1st, and June 7th).

6. The Grievor was rude on the telephone to at least two members of the public, for which she was disciplined on February 16, 1994. Previous accusations of similar behaviour attracted counselling, but no discipline.

I conclude that [the Grievor's actions on June 7th], even if standing alone, can be advanced as a culminating incident… a culminating incident case makes it appropriate to consider the Grievor's previous record to determine if discharge was justified.

[The arbitrator deals with each of the Union's arguments and concludes that] The final Union argument is, in my view, by far the most compelling. It concerns the absence, except for one letter of warning, of a prior disciplinary record for the Grievor. For an employee with fourteen (14) years of .

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service, one single written warning is not the kind of record which normally justifies termination on the basis of a culminating incident. This is especially true if the culminating events themselves, as in the current case, are relatively trivial in nature.

The Union argued strongly that the failure of the Employer to discipline the Grievor for perceived past misconduct, when such misconduct was known to management, means that these prior events ought to be give little, if any, weight in the current proceedings. The Union's rationale is that it is not fair to rely on allegations of past indiscretions which, because they were never formalized as discipline, were immune to challenge by the Grievor through the grievance procedure. This is a position adopted in a number of cases [which are discussed in the award].

The question over which I have struggled (and the decisive issue in this case in my view) is whether the failure of the Employer to earlier discipline the Grievor should result in an overturning of the discharge. After much contemplation, I have concluded that in all the circumstances of this case, the discharge is justified and should stand.

First, it cannot be said that the Grievor was lulled into a false sense of security by the absence of discipline… Not only did the Grievor ignore [management's] efforts to induce a change in her behaviour, she lased out at those proffering the advice and blamed others for any workplace problems.

Second, I accept that management is entitled to some leeway in working with employees with attitude problems. Attitude problems are difficult because they essentially involve an employee's personality. Misconduct often takes the form of a lot of little things which are impossible to address each and every time they occur. A counselling approach, rather than a disciplinary one, usually makes sense in this context. The difficulty arises in recognizing when counselling should give way to discipline and how to distinguish the relatively trivial kinds of misconduct from the more serious occurrences.

Notwithstanding the above conclusions [that the Grievor was a difficult person to deal with in most respects], I still would have been prepared to consider reinstatement had there been evidence of genuine change on the part of the Grievor at the arbitration hearing. The third reason for not overturning the discharge, despite the relative absence of previous discipline, is that I am unconvinced that even a year after being discharged, the Grievor recognizes that she -- not her coworkers, no management -- is the problem. It is this reason that ultimately tips the balance in this case. … For all the above reasons, the grievance is denied.

Note that the decision could have upheld the grievance had the case been argued differently, or had there been a different arbitrator. Students' work should not be graded according to how accurately they matched the final arbitration award.

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Discipline & Discharge Case Analysis: "The Straw that Broke the Camel's Back" For Professor: ____________________________ Due: _____________________________ 10 page absolute maximum (including all appendices and exhibits). Double-spaced with 1" margins and reasonable fonts. May be done individually or in groups of two or three.

Suggested grading: Review Chapter 13 (Thornicroft) of the Gunderson, Ponak and Taras text, and the following supplementary reading: Donald Brown and David M. Beatty. Canadian Labour Arbitration. Canada Law Book. Most recent edition. Note that Brown and Beatty usually is on reserve in Law Libraries and also is available in a CD-Rom version. See the relevant sections in Chapter 7 of Brown and Beatty.

Research beyond the preparatory readings is not required (but is welcomed). You must reference your work fully and properly.

Your case analysis must include answers to each of the following six questions. Organize your analysis in whatever order best presents answers to the six questions.

1. In a one page appendix to the paper, summarize the main time lines and critical incidents that occurred in this case. You may choose to use a table to present these facts. Do not make any inferences as to causes of these incidents; rather, consider yourselves attorneys who are getting the facts straight before preparing any sort of argument.

2. What are the top three reasons for the performance problems experienced in the case? For each reason, analyse whether the problems can be attributed to Ms. Norman, company management, the pressures of the business external to either Norman or the company, or other factors. Be as specific as possible.

3. Are there any significant human rights issues in this case?

4. With reference to the case, describe the difference between management's disciplinary acts and its non-disciplinary interventions?

5. Would progressive discipline, positive discipline or coaching have worked? Why/why not for each type of discipline?

6. Review management's and union's main arguments. What do you think will be the decision of a labour arbitrator, and why?

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Case 5: The Straw that Broke the Camel's Back [This case was developed by Allen Ponak and Daphne Taras, University of Calgary.

It is loosely based on actual events described in a Canadian grievance arbitration. The dates, employer, and names of the main parties have been changed.]

Background This situation occurs in a unionized worksite. This means that management must demonstrate "just cause" for dismissal. The third-party neutral arbitrator who hears this case must determine whether to uphold the dismissal, or to substitute a lesser penalty, or decide that the parties take whatever steps are necessary in the circumstances. Arbitrators must live within the "four corners of the collective agreement." Unionized employees may be reinstated to their jobs by an arbitrator, in contrast to the nonunion setting in which reinstatement is not usually available as a remedy.

Summary The issue in this case concerns the dismissal of Ms. Jean Norman, a clerical employee in the City's Municipal Tax Assessment Department with a seniority date of June 1980. The Employer dismissed Ms. Norman following several incidents in May and June 1994 that occurred against a background of frequent warnings, mostly-non-disciplinary, regarding expected standards of behaviour toward coworkers, supervisors and department clients. The Employer argued that Ms. Norman's failure to improve her behaviour justified its decision to terminate her employment. There was a clear pattern of behaviour with little reason for optimism in any prognosis for future performance.

The Union took the position that the specific events that triggered the dismissal should not have been the subject of any discipline and, therefore, there was no culminating incident on which the dismissal could be based. Alternatively, the Union submitted that if the Arbitrator concluded that Ms. Norman's behaviour in June 1994 was subject to discipline, she should not have been discharged given that the only previous discipline on her file was a letter of warning. The Employer had not established just cause for dismissal.

Collective Agreement The Collective Agreement states that: "When an employee is disciplined and the discipline is to be a matter of record, the employee shall be given written particulars stating the reasons for the action and outlining the terms of the penalty . . .

It is further agreed that after one (1) year's time any disciplinary documents will be removed from an employee's personal record . . . and not held against the employee or management in any way . . ."

Case Facts 1. Culminating Incidents Ms. Norman was fired by the City on June 7, 1994 for "actions on the morning of June 7, taken in context with all that has happened over recent months" (according to the letter of termination). The actions of June 7th, to which the letter of termination refers, consisted of an alleged grunt by Ms. Norman in response to an early morning greeting by Mr. Fraser, her Department manager. When

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called into Mr. Fraser's office a few minutes later, Ms. Norman indicated that she did not understand what Mr. Fraser expected from her, and when leaving the office, she allegedly glared at Mr. Fraser.

Ms. Norman testified that she was very busy at the time of Mr. Fraser's greeting and that she believed she gave a quick "good morning" in response as she was moving down the corridor. She stated she truly did not understand the problem at the subsequent meeting and denied glaring at Mr. Fraser as she left the office.

In addition to the specific events of June 7th, the Employer also relied on two proximate events in deciding to dismiss Ms. Norman. On May 25th, according to the evidence of her immediate supervisor, Mr. Moriarty, he verbally advised Ms. Norman that he was leaving the office and she just kept on working without any acknowledgement. Only after he spoke to her again did she indicate that she had heard him and she did so in an abrupt manner. He stated he reported the matter to Mr. Fraser the same day or the day after.

Ms. Norman testified that she was busy and nodded and said "okay" to Mr. Moriarty's first comment that he was leaving. She recalled him asking if she had heard him and she recalled responding that she had indeed heard him. Ms. Norman stated that, at the time, the incident did not seem to be a matter of concern.

On June 1st, a staff meeting was held regarding office procedures. At the conclusion of the meeting, Mr. Moriarty raised the issue of Ms. Norman's acknowledgement of May 25th. Ms. Norman stated that she responded jokingly with the comment "Would you like me to stand up and salute" and that at the time Mr. Moriarty took no offence. Mr. Moriarty, on the other hand, described the comment as sarcastic and indicated that he reported the exchange to Mr. Fraser the next day. Ms. Norman testified that the comment was not meant to be sarcastic.

Mr. Fraser made the decision to terminate Ms. Norman in consultation with the City's Labour Relations Department. He stated that following the May 25th, June 1st, and June 7th events, he concluded that Ms. Norman was behaving in a totally inappropriate manner, that she was unable to understand the effects of her behaviour on others, that she did not acknowledge that she had a problem and that efforts to assist her had not been successful.

Ms. Bell, an HR manager, participated in the decision to terminate Ms. Norman and helped draft the letter. She stated that in reaching the decision to terminate Ms. Norman, her full employment history, including non-disciplinary meetings and letters, was considered. Ms. Bell agreed that a number of potentially disciplinable incidents of misconduct on the part of Ms. Norman dating back to 1987, had been dealt with through counselling, not discipline. Both Ms. Bell and Mr. Fraser explained that the two approaches had been followed with respect to Ms. Norman -- a counselling stream and a disciplinary process.

Previous Discipline Prior to her dismissal, Ms. Norman had been disciplined on one (1) occasion. She received a letter of warning on February 16, 1994 stemming from complaints received from members of the public. The letter of warning, written by Mr. Moriarty, is reproduced below: Dear Jean: Re: WRITTEN WARNING

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You are being disciplined for unacceptable behaviour in your dealings with the public. On February 8, 1994 complaints were received from two individuals regarding telephone contacts with you. One citizen characterized your behaviour as "down-right rude, snappy and arrogant" and gave examples of recent conversations where that had been the case. The other citizen talked about an incident on February 2nd when you denied having the ability to provide assistance that other Clerks provided under similar circumstances.

You were specifically spoken to about this type of behaviour on January 13, 1994.

Employees are expected to deal with the public in a manner that is courteous, patient and tactful -- anything less in unacceptable. Further incidents of unsatisfactory work performance will result in more severe disciplinary action up to and including dismissal.

Two employees of a local real estate company, who had written letters of complaint about Ms. Norman in February 1994 testified about their complaints. Mr. Abbas described Ms. Norman as rude, "very short" and unhelpful. He stated that his job required him to call the City Assessment Department almost every day, but he found his interactions with Ms. Norman so uncomfortable that he would hang up the telephone if Ms. Norman answered. Mr. Koski works with Mr. Abbas. Mr. Koski testified about a specific occasion when Ms. Norman had been particularly unhelpful. Mr. Koski stated that he wrote a letter of complaint because of previous similar responses from Ms. Norman. Both Mr. Abbas and Mr. Koski indicated that Ms. Norman's poor telephone etiquette and lack of helpfulness contrasted sharply to that of the other employees in the Assessment Department.

Ms. Norman could not recall the specifics of her interactions with either Mr. Abbas or Mr. Koski and stated that she was not shown their letters of complaint during grievance discussions following receipt of her written warning. However, Ms. Norman was adamant that she could not possibly have made the rude and unhelpful comments attributed to her. She agreed that answering the telephone is an important part of her job, accounting for about thirty percent (30%) of her time, and crucial to the function of her department.

Finally, Ms. Norman testified that she was not quite sure about the implications of the warning letter at the time she received it. She stated that she was unsure how many such letters she would have to receive "before I could be fired." However, she acknowledged that by March 1994, she was aware that her job might be in jeopardy.

Relations with Co-Workers Four of Ms. Norman's co-workers gave evidence about what they characterized as Ms. Norman's uncooperative and nasty behaviour toward them. All four described Ms. Norman as a loner who did not interact socially with other employees. They described her as fat, depressed looking at the best of times, petty and occasionally vicious. They were unanimous that they would feel uncomfortable if she was reinstated in the Department.

Ms. Kaplan testified that she and Ms. Norman had difficulties with respect to switchboard relief and scheduling of days off for flex days. She stated that Ms. Norman was rude and abrupt toward her, would stare at her in a nasty way, mimicked her, called her a "bleeding heart wimp" during a meeting, and referred to her and other co-workers as "it." She agreed, however, that she and Ms. Norman had worked well together when they had both been assigned to another office three years earlier.

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Mr. Kutryk also indicated that there were problems between her and Ms. Norman regarding switchboard relief. He testified that Ms. Norman was not always available when she was supposed to be on the switchboard. He sent two memos outlining the problems in August 1993 to Mr. Fraser and Mr. Metcalfe. As well, he sent an e-mail message to Ms. Norman in an effort to clarify the relief schedule. He described Ms. Norman as "nasty . . . whenever I encountered her" and stated that she would make hateful faces when passing his work area. Mr. Kutryk did not report the "hateful faces" to management.

Ms. Murphy worked with Ms. Norman until 1990. She testified that Ms. Norman had made faces at her at work and once on the public bus. She described the faces as those a young child would make.

Ms. Murphy stated that Ms. Norman had encounters with everybody, but that she did not report Ms. Norman's behaviour to management.

Ms. Wexler testified that there always was a confrontation with Ms. Norman when the switchboard relief schedule was set. Unlike other employees, Ms. Norman resisted working switchboard relief.

Ms. Wexler also stated that Ms. Norman had problems with mail pick-up and that she had a tendency to forward her telephone calls to the switchboard without first advising the receptionist. Ms. Wexler related an incident where Ms. Norman stuck out her tongue and made a face towards her. According to Ms. Wexler, Ms. Norman has been known as a difficult person for as long as she could recall.

In her evidence, Ms. Norman said that her difficulties with Ms. Murphy had occurred in 1987 and that Ms. Murphy had directed some very derogatory remarks toward her. Ms. Norman was attending "Spa Lady" fitness classes at the time, and she overheard Ms. Murphy ridiculing her attempts to lose weight. Ms. Norman agreed that she had had difficulties with some co-workers over scheduling and relief duties during part of 1993, but stated that things had improved after an October meeting with Mr. Moriarty. According to Mr. Moriarty, switchboard relief ceased to be an issue after 1993 because the switchboard was moved to another department.

With respect to Mr. Kutryk, Ms. Norman did not like the fact that Mr. Kutryk kept "sending me memos about my reception responsibilities and how I should conduct myself." She believed that Mr. Kutryk was in fact the person receiving special privileges and wrote a memo to that effect on October 25, 1993 about the use of a casual employee. The second paragraph of this memo reads: "Please advise if this is a privilege only Robert Kutryk is allowed or if the other clerks will also be permitted this exclusion from their duty."

Ms. Norman also believed that Ms. Kaplan was receiving special treatment and wrote a memorandum to that effect to Mr. Moriarty on October 21, 1993, outlining several occasions where, in her view, Ms. Kaplan was allowed unwarranted time off. In particular, Ms. Kaplan was granted leave to attend Jewish high holiday services, or prepare festive meals. Ms. Norman inquired as to whether Ms. Norman could have a day off for Halloween, to prepare her costume and make candy apples. In the same memo, Ms. Norman took exception to a reference to Ms. Kaplan's spouse: "You also refer to 'her spouse'—she is not married." In Ms. Norman's view, Ms. Kaplan's boyfriend should not be referred to as a spouse.

Ms. Norman denied making a statement attributed to her during a January 23, 1992 meeting with Mr. Moriarty to the effect "I don't like them and I don't have to be nice to them" (in reference to fellow employees). This statement was recorded in Mr. Moriarty's written notes of the meeting. However, a week later, Ms. Norman accepted a temporary position in another department and wrote a letter stating that the department "thrives on gossip, rumours, and innuendo" and criticizing those who approached her to ask about the temporary position because it was a "private and confidential matter." Ms. Norman also denied making similar negative statements about her colleagues, also recorded in notes, in a meeting with Mr. Fraser on October 27, 1993. Ms. Norman did agree that in .

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the October 27th meeting she believed that the situation with co-workers could be resolved if staff members apologized to her.

In her evidence, Ms. Norman acknowledged that her blunt, direct approach put a strain on others and indicated that there was "a need for myself to change my behaviour." She stated that she now understood that "I probably came on too strong" with co-workers, that any conflict "was more my fault" and that "I didn't know any better."

Interaction with Supervisors There was both written and oral evidence from Mr. Moriarty and Mr. Faser regarding Ms. Norman's attitude and behaviour toward management. Mr. Moriarty stated that Ms. Norman had a problem with greetings, often not responding to his simple "good morning" to her. He also made notes of a series of telephone interactions during December 1991 in which he characterized Ms. Norman's manner as abrupt, discourteous and deliberately sarcastic toward him. In a meeting held on January 24, 1992, to discuss Ms. Norman's telephone manner, Mr. Moriarty's notes showed that Ms. Norman stated that she did not like or respect him and felt the same about a number of other managers. The notes also show Ms. Norman saying "You only have a small file on me. I have one at home where I have notes about you and all of them."

On October 1993, Mr. Moriarty met with Ms. Norman and also sent her a performance expectation letter in which he indicated, among other things, that Ms. Norman's behaviour was "unbusiness-like and shows little professionalism." In reply, Mr. Norman wrote a letter to Mr. Moriarty that ended with the following paragraph: I was not informed of your absence from the office today or when you planned to return. It would be greatly appreciated if you could advice me of your absence and return in the future to promote professionalism, teamwork and a business-like atmosphere.

Mr. Fraser became Department Manager in July 1993. He testified that Ms. Norman displayed an inability to deal appropriately with people whether they were co-workers, management or the public.

He stated that as a result of staff complaints, he reviewed documentation on Ms. Norman in October 1993. On the basis of his review, he concluded that Ms. Norman was insolent, sarcastic and disdainful. Although he found her physically "repulsive" this fact did not, he claims, affect his evaluation of her job performance. He cited Ms. Norman's letter to Mr. Moriary on October 21, 1993 (reproduced above) as insubordinate, the equivalent of saying "up yours."

On a first-hand basis, Mr. Fraser made notes of an incident in January 1994 in which he described Ms. Norman as impertinent, rude and curt in response to his informal enquiries as to "how things were going." He also described a grievance meeting in May 1994 in which Ms. Norman grimaced, rolled her eyes, made faces at him and grunted.

Ms. Norman had a different view of her relationship with management. Notwithstanding the notes taken at various meetings by both Mr. Fraser and Mr. Moriarty, she denied making statements attributed to her about disliking or keeping a file on Mr. Moriarty. Ms. Norman stated that the notes must be incorrect and suggested on two occasions in her testimony that Mr. Moriarty might have had a hidden agenda when he made his notes. She did acknowledge that Mr. Moriarty had referred her to the Employee Assistance Programme in 1987 and stated that Mr. Fraser was not supportive and did not understand her needs.

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With respect to her letter of October 21st to Mr. Moriarty, Ms. Norman indicated that she thought Mr. Moriarty was "not being fair to me" and had been selective in his comments in his earlier letter to her. She denied, however, that she was suggesting in her letter that Mr. Moriarty was unprofessional or unbusiness-like, stating "that's my personality." She agreed that the tone of her letter was not appropriate.

Ms. Norman described three meetings between herself and Mr. Fraser. At the first meeting, on October 27, 1993, she characterized Mr. Fraser as relaxed and overly-friendly. He made inquiries about her use of the Employee Assistance Programme and her attempts to "better herself" by exercise. She told him that she considered these questions to be invasive of her privacy, and felt that other employees had been talking about her "behind my back." At the next meeting, according to Ms. Norman, he became flustered and agitated. She stated that Mr. Fraser lost credibility with her at that point because, though he was sending her for counselling, it was Mr. Fraser "who was coming unglued." Ms. Norman stated that Mr. Fraser, not her, was the one who needed counselling after the January meeting.

At a grievance meeting in May, Ms. Norman testified that Mr. Fraser became flushed and angry, got out of his chair, banged on the desk in front of her and berated her for being insolent and impertinent.

Mr. Thomas, the union steward who attended the May meeting, corroborated Ms. Norman's description, though he stated that from where he was sitting he could not tell if she had done something to provoke the outburst. Mr. Moriarty also attended the May meeting. He stated that Ms. Norman was grinning, grimacing and contorting her face throughout the meeting and that Mr. Fraser confronted her over this behaviour.

Ms. Norman agreed that in a February 1994 psychological assessment she indicated that one possible solution to any workplace problems would be for her supervisors to give her a letter of apology. At the arbitration hearing, she stated that she now realized that "this was not the right take."

Non-Disciplinary Communication and Commendations At least five (5) meetings were held with Ms. Norman between January 1992 and January 1994 to discuss her behaviour and attitude. Management considered all five meetings, and the letters that flowed from three of them, non-disciplinary.

On January 23, 1992, Mr. Moriarty met with Ms. Norman to discuss complaints about the way she answered the telephone. According to Mr. Moriarty's notes and his testimony, he told Ms. Norman that her telephone manner was not acceptable and must, therefore, improve, and also that she must be polite and courteous to co-workers. The meeting was followed up with a letter titled "Work Performance Expectations." Several paragraphs from the letter are excerpted below: I have received a number of complaints regarding your handling of customer enquiries. These have come from fellow employees and from the public. I also have talked to you and found you to be abrupt, impolite and discourteous.

All Assessment Department employees have attended the Creating Satisfied Citizens and Customers course, yourself included, and you are aware of what is expected of you.

At our meeting, I asked if you are going to improve your telephone manner. Your answer of "maybe" is not acceptable. I expect you to improve your manner immediately. .

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Mr. Moriarty was not optimistic about the likely success of the meeting and letter. He wrote in his notes that "I don't expect any changes"; "it appears Jean Norman does not care"; "it appears Jean Norman does not like her fellow employees"; "she does not like/has no respect for me."

Two weeks later, a follow-up meeting was held with Ms. Norman, Mr. Moriarty and a Union representative. Mr. Moriarty made notes of the meeting. At this meeting, the notes of the January 23rd meeting were reviewed. Ms. Norman had just accepted a six-month temporary transfer to another department; thus, it was agreed that no further action was warranted. According to the notes, Mr. Moriarty emphasized that upon her return, Ms. Norman must adhere to expectations set out in the January 23rd meeting and letter. To this, the Union representative indicated to Ms. Norman that "what Jack is asking for is quite reasonable."

Ms. Norman worked in another department from February to August 1992 and then returned to the Assessment Department. Friction developed between Ms. Norman and co-workers over telephone relief scheduling and days off. On October 18, 1993, a meeting was initiated by Mr. Moriarty to discuss these matters. A letter titled "Work Performance Expectations" was given to Ms. Norman a day after the meeting. Portions of the letter are reproduced below: You have indicated to me on numerous occasions that you would like to be relieved of these relief duties. As it is part of the clerks' duties, the present policy will not change.

For the past two weeks your actions of refusing to talk and/or communicate with the clerks and other staff members is very unbusiness-like and shows little professionalism.

The Assessment Department is expected to operate in an atmosphere of cooperation, not confrontation. We are expected to work as a "team", and recently there has been very little teamwork.

In the immediate future, I expect the working relationships between you and your coworkers to improve. If this fails to occur, I will re-assess the situation on November 26, 1993.

Ms. Norman responded to this letter with a letter to Mr. Moriarty in which she accused him of being "quite selective in your facts and details" and chastised him regarding "professionalism, teamwork and businesslike atmosphere."

Mr. Fraser became involved at this juncture. He stated that based on discussions with Mr. Moriarty, employee complaints and a review of Ms. Norman's record, he was concerned that Ms. Norman was showing no willingness to change. Mr. Fraser met with Ms. Norman on October 27, 1993 and made notes of the meeting the following day. Though there was some disagreement in the evidence as to what precisely was said at the meeting, the testimony of both Ms. Norman and Mr. Fraser, plus the notes of the meeting, show the following topics were discussed: issues of friction between Ms. Norman and co-workers; the need for cooperative relations among staff; suggestions from Ms. Norman for ways to resolve any problems; the possibility of a conflict resolution process with follow-up; and, consequences for employees who failed to improve. In Mr. Fraser's opinion, Ms. Norman seemed to believe that everyone else was out of step and had to change; her only suggestion was that other staff apologize to her. There was no follow-up letter from this meeting.

Following the October 27 meeting, Ms. Norman received two memos from Mr. Fraser commending her work, and received one city-wide award. On November 15, 1993, Mr. Moriarty sent a note .

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thanking Ms. Norman for her contributions to the department's effectiveness on a particularly busy day. On November 30, 1993, Mr. Moriarty sent her the following memo: At our meeting yesterday, we discussed the letter I send you on 93/10/19. In that letter I said I would assess the working relationships in our Department on 93/11/26 to see if any improvements had occurred.

It appears that an improvement has occurred, and at the present time I am satisfied with the way the section is functioning. I would like to see this atmosphere of cooperation continue into the future. If you have any questions or concerns, please come see me.

Mr. Moriarty commented about these memos. He testified that he had discussed the situation with Mr. Fraser and they had agreed that any improvement at all in Ms. Norman's behaviour should be recognized in order to encourage her to continue to improve. He felt that positive reinforcement was an important part of employee coaching.

On December 14, 1993, Ms. Norman received an award certificate plus a cheque for sixty dollars ($60) from the City. The award was for Ms. Norman's suggestion that changes in municipal assessments be handled by Fax whenever possible, in order to speed up the processing of paperwork.

She also was commended in writing for her "exemplary productivity based on file clearance rates."

After his meeting with Ms. Norman on October 27th, Mr. Fraser initiated an investigation by Ms. Ina Paul, a Human Resource officer. Ms. Paul interviewed most of the staff in the department regarding their concerns. Ms. Norman was neither interviewed nor advised of the investigation. Ms. Paul gave a verbal report to Mr. Fraser early in January 1994 and, based on this information, Mr. Fraser arranged a meeting with Ms. Norman on January 13th. Mr. Fraser prepared a letter in advance of the meeting and reviewed the letter with her. The letter, titled "Work Expectations" and dated 13 January 1994, is presented below: Re: WORK EXPECTATIONS Since my meeting with you last fall before you went on vacation, I had an investigation undertaken pertaining to concerns discussed with you at that meeting.

Examined were matters such as your interactions with co-workers and handling of workplace procedures and policies.

The findings of this investigation have been reviewed by myself and cause me grave concern which I have relayed to you. Accordingly, the decision has been taken to issue the following directives to you: 1. You will attend an appointment with Jacqueline Dalton on Tuesday, January 18, 1994 at 9:30 am. She is located on the south end of the 3rd floor of the Building, in the Employee Assistance Program offices.

2. You will be required to follow all directions received from her regarding assessment and treatment, including the monitoring of same.

3. Specific instructions will be issued to you in the near future regarding scheduling of vacations, lunch breaks, and various relief duties. Upon review of the instructions and confirmation that they are understood, you will be required to follow them.

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I plan to closely monitor this situation and can not emphasize strongly enough the importance of the attention that you must give to these matters.

I will give you any assistance possible in meeting expectations as they have been outlined to you today, but due diligence and effort on your part must be in evidence.

I will address any questions you may have about the above to ensure that my expectations are clearly understood.

In addition to the letter prepared in advance, Mr. Fraser also prepared in advance an outline of issues he planned to raise in the January 13th meeting. Ms. Norman reviewed this outline during her testimony and agreed that most of the contents were discussed with her. The outline included the following statements: "Conduct and behaviour is not what expected or accepted by Employer or me … Change is expected." Specific items listed in the notes included: "abusive attitude to employees and public"; "some people have felt intimidated"; "inconsiderate and impatient"; "disruptive"; "inflexible." As well, Mr. Fraser stated that he told Ms. Norman that she must follow the instructions in the Work Expectations letter, especially as it related to the Employee Assistance Program, if she wished to continue her employment.

In her evidence, Ms. Norman commented on her reactions to these non-disciplinary meetings and letters. With respect to the January 1992 meeting and letter from Mr. Moriarty, Ms. Norman testified that she did not realize at the time that she had a problem -- "I’d been like that for forty years." Ms. Norman also did not believe that Mr. Moriarty was either fair or correct in his assessment of the situation in his letter of October 19, 1993. She testified that, in her view, the letter was "just a letter," not counselling. Ms. Norman further noted that, contrary to what was stated in the letter and notwithstanding Mr. Moriarty's memo of November 30th, there was no reassessment of the situation in November 1993.

Ms. Norman indicated that the October 27, 1993 meeting with Mr. Fraser, coming so soon on the heels of the meeting with Mr. Moriarty, was confusing. She stated that she "didn't know what was happening" as Mr. Moriarty was "coming at me from one side and Mr. Fraser from the other." She pointed out that there was no follow-up, as Mr. Fraser had suggested, and that no conflict resolution process was put into place.

Ms. Norman testified that she was also confused by the meeting of January 13, 1993 with Mr. Fraser.

She stated that she was unaware of the investigation being carried out by Ms. Paul and that she had received two commendations and an award since her last meeting in October with Mr. Fraser. She indicated that prior to the meeting she had thought that things were all right. She was "horrified" to learn of an investigation going on without her knowledge and felt "incredibly betrayed." After January 13th, "I didn't know where I stood," "I was totally stunned," and "I felt like a deer caught in the headlights."

Despite her confusion, Ms. Norman agreed that she had understood the contents of the January 13th letter and the instructions set out in the letter, that she was aware that Mr. Fraser had serious concerns about her and that she was aware that she was being asked to change her behaviour.

Psychological Counselling Evidence was provided regarding Ms. Norman's experience with psychological counselling. In 1987, Ms. Norman was referred to the City's Employee Assistance Program (EAP) after experiencing friction with her co-workers. She stated that she met twice with a psychologist, but considered it a .

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"waste of time" as "all we did was talk." She recalled that the psychologist "told me how to be 'nicey nice'."

Ms. Norman later elaborated that "nicey nice" meant learning how to say good morning and to be more presentable, and that she had not intended her use of that phrase to indicate a contempt for counselling. When asked her opinion about what psychological counselling involved, Ms. Norman stated that "it's about shock treatment and lying on a couch and telling about dreams." Ms. Norman majored in psychology as part of her Bachelor of Education Degree, a four-year program offered at York University.

There was no evidence that Ms. Norman received any psychological counselling between 1987 and 1994. She agreed that after 1987, the availability of EAP assistance had been brought to her attention in January 1992, October 1993, and again in January 1994. Ms. Norman testified that she did not believe in mental health professionals at the time, but now feels differently.

The January 1994 letter directed (rather than suggested) that Ms. Norman see an EAP counsellor; as a result, she met with Jacqueline Dalton on January 18th. Ms. Norman testified that no counselling took place at this meeting, but that she was advised by Ms. Dalton that an external psychologist would be doing an assessment. An appointment was subsequently arranged for Ms. Norman to see Dr. Steven Hargrove, a Clinical Psychologist. Dr. Hargrove met with Ms. Norman on February 23, 1994, and sent a three-page psychological assessment to Ms. Dalton.

Ms. Norman met with Ms. Dalton again on March 11, 1994. She was provided with a copy of only the third page of the psychological assessment that contained a summary and recommendations. Ms. Norman testified that she asked Ms. Dalton for clearer guidance as to "what was expected of me" and requested counselling options. According to Ms. Norman, Ms. Dalton advised her that EAP was not required but only optional and gave her the name of an outside psychologist who might be of help.

Ms. Norman stated that Ms. Dalton told her that she would follow-up, but no follow-up took place.

In late March, Ms. Norman telephoned one of the psychologists recommended by Ms. Dalton and was advised that an appointment could be made within a few days. Ms. Norman decided to wait, however, until mid-June for an appointment. She explained that she had a lot on her plate at the time, including planning for her parents' 50th wedding anniversary at the end of July and a house move on April 1st. She stated that her new house required a great deal of painting, cleaning, repairs and yard work. Ms. Norman acknowledged that she delayed beginning counselling even though she recognized that her job was in jeopardy. She stated that she waited until June because "I wanted to give it my full attention."

Dr. Hargrove testified as an expert witness and his psychological assessment of Ms. Norman was made part of the record. His summary and recommendations are set out below: Ms. Jean Norman is a 49-year-old single woman experiencing interpersonal conflict in her work environment. Although she describes this as longstanding there has been an escalation in recent years. In understanding this problem I believe that some of her personality traits suggest a preference of individual rather than group efforts. She also has some rigid viewpoints and feels that to show flexibility may be interpreted by others as a sign of weakness. On the other hand fellow employees may also misinterpret Ms. Norman's lack of desire to affiliate socially. An entrenchment of opposing viewpoints has occurred making compromise difficult. I reviewed with her a range of possible solutions. She began by saying that she wanted to confront her superiors behind closed doors and receive a letter of apology from them. She recognized that the former would not ultimately solve any problems and the latter .

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would be next to impossible to obtain. She is fully aware of the fiscal crisis facing public institutions and fears for her job as she is completely independent. She was able to acknowledge some lack of manners in her interactions with co-workers and suggested that she does not internalize stress but rather externalizes it in the form of social barrages.

While Ms. Norman does not present a formal diagnosis of mental disorder she does have some rather rigid viewpoints. While holding opinions is a civil right, the expression of these in the workplace may be unwise and ultimately self-defeating.

Ms. Norman may benefit from counselling to gain insight into the consequences of her behaviour and its effects on others. She certainly has the intelligence for this task but breaking her understandable bunker mentality will be a necessary first step.

Because of the protracted conflict with the members of her work group it may be prudent to consider an alternate employment placement within the organization. It seems from her history and testing results that a position of some independence would be ideal for her.

In his testimony, Dr. Hargrove elaborated on certain aspects of his assessment. He stated that without counselling, Ms. Norman's work problems were likely to recur, but that she has a "lower than average" probability of change through counselling because she tended to see the need for change in others rather than in herself. Her resistance to counselling combined with the longstanding nature of her personality characteristics would pose problems, according to Dr. Hargrove. However, he emphasized that it would be difficult to predict the success of counselling without a trial period of treatment and that resistance to counselling may dissipate after therapy beings.

Dr. Hargrove suggested that Ms. Norman would function best in a work environment that involved less interaction with others. He believed that a lateral move would provide a fresh start and would be beneficial. Mr. Fraser commented in his testimony about whether a solution lay in the transfer of Ms. Norman. He stated that it is the policy of the City not to transfer problems from one department to another. He acknowledged that there have been occasional exceptions to this policy, particularly in seeking the accommodation of disabled employees.

At the time of the arbitration, Ms. Norman had reviewed the full report prepared by Dr. Hargrove and was present for his testimony. She stated that his assessment was "right on" and indicated "she was really impressed." Based on Dr. Hargrove's assessment, Ms. Norman indicated that she now understood that she needed counselling in order to change her behaviour.

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