CHAPTER 4 Employment Relations in Canada Mark Thompson and Daphne G. Taras

1. CHAPTER 4 Employment Relations in Canada Mark Thompson and Daphne G. Taras

2. Lecture outline • Key themes • Historical, economic and political context • Unions • Management • The role of the state • Collective bargaining • Strikes • Dispute settlement • Public sector employment relations • Political role of the labour movement • Conclusions

3. Key themes • Strong legal protection for collective bargaining • A large portion of the labour force is subject to the influence of collective bargaining, either directly or indirectly • Traditions of adversarialism and moderate levels of strike activity • Structures of employment relations are less centralised than in other nations • Hybrid of US-style individualism and European traditions of collectivism

4. Historical context • Influence of French Canada – province of Quebec in particular has social, economic and legal traditions distinct from those of the rest of North America • High levels of immigrant workers – almost 20% of all Canadians are immigrants and immigrants have accounted for 80% of labour market growth in recent years • French influence, strong relationship and proximity to the US and high levels of immigration have led to a hybrid of US-style individualism and European traditions of collectivism in employment relations

5. Economic context • Canada depends heavily on the production and export of raw materials and semi-processed products – these markets do not generate substantial direct employment • Canada signed a Free Trade Agreement (FTA) with the US in 1988 and then the North American Free Trade Agreement (NAFTA) with Mexico and the United States in 1994 – the US now accounts for 78% of Canada’s exports • There is extensive US ownership in many primary and secondary industries

6. Political context • Canada’s federal system of government is decentralised – power is vested in ten Canadian provinces • All jurisdictions have similar labour legislation • Federal authority is limited to regulation of the federal civil services and national industries (e.g. inter-provincial transport) – amounting to approximately 8.4% of Canadian workers • Multi-party political system reflecting regional interests • Main political parties are the Liberal Party and the Conservative Party (currently in power) • Each province has a distinct political culture reflecting regional differences – none of the federal parties are strong in all of the provinces • The Charter of Rights and Freedoms in the Constitution had no effect on private sector employment for many years. However, a Supreme Court ruling in 2007 held that the Charter protected collective bargaining in institutions and that this right should be interpreted by international standards

7. Unions in Canada • Unionisation often occurs at the level of the workplace, reinforcing the decentralised nature of the Canadian system • The Federal government and provinces protect the right of most employees to form unions through laws that set out the procedure by which a union may demonstrate majority support from a group of employees to obtain the right of exclusive representation for them • Employers are then required to bargain by law with the certified union • The major function of all unions is collective bargaining, although some unions have recently taken on broader roles including supporting political parties and various social causes • The majority of Canadians that are represented by unions are required to pay union dues, whether they desire to be members of the union or not (this prevents ‘free riding’)

8. Union density • Approximately 29% of Canadian non-agricultural workers were unionised in 2008 • In 2007, 72% of the public sector was unionised and 17% of the private sector was unionised • Absolute numbers of unionised workers have continued to grow since 1984 but this growth has lagged behind increases in the size of the labour market, meaning that union density has declined moderately – this contradicts the experience of the US • There are approximately 250 unions in Canada, ranging in size from less than 100 members to almost half a million • The 15 largest unions contain 59% of all unionised workers

9. Peak union bodies in Canada • Two-thirds of all Canadian unions are affiliated with a national centre (peak union) • The most important central confederation is the Canadian Labour Congress (CLC) representing almost 72% of all union members • The CLC is the political voice of the Canadian labour movement but it has no involvement in bargaining or substantial control over its affiliates • The power of the CLC is limited by the constitutionally weak position of the federal government over industrial relations and the poor political record of the New Democratic Party (NDP) • The second largest peak union body is the Confederation of National Trade Unions (CNTU, or CSN in French) representing 6.4% of all workers, most of whom are located in Quebec. The CNTU is known to be the most radical and politicised labour organisation in North America

10. Management • Employers generally accept the role of unions in unionised firms, particularly where there is a long history of unionism • Non-unionised firms try to avoid unionisation by matching pay and conditions available in unionised workplaces, known as “union substitution policies” • Almost 20% of non-union workplaces have formal employee representation plans – thus whilst unionism is 29% of the Canadian workforce, collective employee representation is considerably higher • MNEs operating in unionised sectors in Canada generally do not import industrial relations practices from their home countries • Use of High Commitment Work Practices in unionised workplaces is limited but employers are seeking to move away from the traditional adversarial system • Employers generally prefer workers to be flexible, already trained and disposable – long term employment contracts are no longer the norm and pay systems increasingly focus on performance-based pay

11. The role of the state • The Canadian government is a major employer, employing 19% of the labour force, directly and indirectly • Each province, as well as the Federal government, sets industrial relations law and employment standards in the industries under its jurisdiction – employees have not had their statutory rights increased for over a decade • Employment standards usually set minima in areas of pay and holidays – often not enforced • Extensive government regulation of union-management relations • Often combines many features of the US National Labour Relations Act (Wagner Act) and the older Canadian pattern of reliance on conciliation of labour disputes • Legislation imposes few requirements on the substance of a collective agreement – yet the exceptions to this are significant and expanding • Separate legislation exists federally and in most provinces for the public sector

12. Collective bargaining • Collective bargaining in Canada is decentralised • The most common level of negotiation is the single workplace/single union model – followed by multi-employer/single union (together these models cover over 80% of all workers) • Company-wide bargaining is common in the federal level and in provincially regulated industries concentrated in a single province • Bargaining often follows regional, not national, patterns • Issues include pay, union security, hours and holidays, promotion and layoff provisions and fringe benefits • Often supplementary agreements exist for specific situations or work areas • Most collective agreements include binding arbitration clauses • Litigation is frequent and legalistic

13. Future of collective bargaining in Canada • Decentralised nature of Canadian collective bargaining structures responded well to economic deregulation of the 1980s and 1990s • Yet, as in other DMEs, the future of collective bargaining is uncertain as debate focuses on the ability of unions to expand beyond their traditional membership bases • Canadian unions have faced difficulty replicating membership successes of the heavy industry and blue-collar occupations in the service sector and technologically advanced industries • Sharp decline in manufacturing during the 2008 Global Financial Crisis exacerbated this challenge • Immediate future of collective bargaining will be a function of the actions of governments and employers in the face of union economic and political power – federal and provincial governments are unlikely to adjust union power beyond moderate reductions in their legal position

14. Management and collective bargaining • In response to the increased economic competition and deregulation of the 1980s and 1990s, Canadian employers initiated layoffs and increased their use of part-time and casual labour • There was no general movement to escape unionism due to traditionalism and legal forces • Most employer associations advocate cooperation with unions and have not publicly called for deregulation of labour markets • It is unclear whether this support would continue in the absence of a protective legal framework

15. Strikes • Canadian law prohibits strikes during the operation of a collective agreement • Canada has relatively high levels of working days lost due to strikes compared with other DMEs • From 1986-1995, Canada’s strike rate was about 2.5 times higher than the OECD average • The decentralised structure of collective bargaining and reductions in manufacturing employment virtually eliminated private sector strikes in the 1980s • Canadian strikes steadily declined during the 1990s but remained above the OECD average • Worker involvement in Canadian strikes is usually medium to low (3-10% of union members) and the size of the strikes is not particularly large. In recent years, the average duration has been 12-15 days • Most large strikes in the 1990s and after 2000 occurred in the public sector

16. Dispute settlement methods • Public policies to reduce industrial disputes usually fall into two models and are closely linked to the political orientation of the government: • Mandated consultation and/or tripartite committees • Legislative controls on the exercise of union power • Currently, settlement of disputes is usually by way of mediation (no report is issued) or conciliation (a tripartite board issues a public report) – more than half of all collective agreements are achieved with an element of third-party intervention • Compulsory arbitration of interest disputes is rare – generally limited to disputes in the public sector or essential services

17. Public sector employment relations • This is the area of Canadian employment relations most subject to change • It is often subject to severe bargaining restrictions and/or the imposition of unilateral bargaining outcomes in the form of legislation • Unions have vigorously protested these measures but with little success • However, in 2007 the health care unions litigated a similar measure under the Charter of Rights and Freedoms • The Canadian Supreme Court found the measures violated the collective bargaining protections when interpreted by ILO standards • The full implications of this decision are yet to be seen, but it is clear that Canadian governments are barred from passing severe legislation affecting collective bargaining in the public sector

18. Political role of the labour movement • Officially the CLC supports the NDP but this alliance has presented problems at the federal level • The NDP has not had success at the federal level of politics • The union movement has not been able to deliver large blocs of votes to federal NDP • After electoral finance reforms in 2003 and 2005, unions and corporations are now no longer able to fund political campaigns • Labour's political alliance with the NDP has been more successful in the provinces yet runs the risk of politicising the union movement • The Social Contract in Ontario (an NDP government’s attempt to negotiate substantial reductions in compensation with public sector bargaining agents) demonstrated the NDP’s ability to undermine the labour movement, yet withdrawing political support for the NDP meant that an even more conservative political party came to power

19. Conclusions • Decentralised structure of the collective bargaining system has allowed Canada to respond well to changes in economic conditions • The labour movement currently enjoys traditional and legal legitimacy • Absolute union membership numbers are increasing but density rates are declining • A major change in the trajectory of Canadian employment relations in the near future is unlikely