MY PAPER, 'THE FUTURE OF INDUSTRIAL RELATIONS' in Canada urges an increased federal role for labour...
Transcript of MY PAPER, 'THE FUTURE OF INDUSTRIAL RELATIONS' in Canada urges an increased federal role for labour...
The Futrrre of IndustrialRelations in Canada
James MatkinCanadian Public Policy / Analyse dePolitiques
Vol. 12, Supplement The Macdonald Report: TwelveReviews / Le Rapport Macdonald: Douze Analyses (Feb.,1986), pp. 127-132Published by: University of Toronto Press on behhlf ofCanadian Public PolicyDOI: 10.230713551299Stable U R L : http ://www.j stor. org/stable/3ss 1 299Page Count 6
THE FUTURE OF I]IDUSTRIALRELATIO]IS I]I CA}IADA
JAHES HATKIi{ Business Council of British Columbia
anada continues to suffer the disadvantages
of a poor reputation in its industrial relations
and unfortunalely there is little appetite to come
to grips with the problem. The British Columbia
economy illustrates the damage to investment op-
portunities caused by a poor reputation in industrial
relations as the province struggles to expand and
diversily its economy.lWhile the Macdonald Royal Commission is very
well-known for its bold support of freer trade with
the United States, by comparison the Beport's
lacklustre observations on labourlmanagement
relations were disappointing and have gone un-
noticed. Yet if we do not improve our industrial rela-
tions, the benefits of a closer economic relation-
ship with the United States will be lost.The Commission researched some of the key
causes of labour strite such as bad personal rela'
tions between employers and employees and thegrowth of unionization and the volatility of the
economic environment, but surprisingly they were
not convinced that the situation in Canada de-
manded any tough reform. The Report concludes:
Employer-employee relations in Canada
seem likely to be most responsive to improve'
ment at the level of individual firms, plants and
union locals. Overallsolutions proposed at theprovincial or national levelseem unlikely to be
as effective as local solutions.Commissioners therefore recommend that
governments support, on a local and voluntary
basis, such features as:
- Preventive mediation programs
- Quality-of-working-life programs
- Gains-sharing/compensation arrange'ments.
Therefore, no new idea or philosophy for in'
dustrial relations is recommended. The Commis'
sion concluded thai more of the same will be good
enough for Canada. C'est dommage.
Canada has a worse strike and lockout record
'than in any otherWestern nation'according to the
Report (Vol. Two, p.689)and after some discussion
of the meaning of these statistics the Commis'
sioners concluded 'that we Canadians are now
among the most dispute prone of the industrialized
nations'(Vol. Two, p.695)'lYet the Report opts for
the status quo recommending only 'greater c&operation and consultation' betvrreen labour and
management. ln light of our devastating record forlabour strife it is obvious that we need more co'
operation, butlhe real issue is hout do we achieve it.
'Glearly, ours is a system desperately in need
of revision'. The above sentiment is guoted from the
Report (Vol. Two, p.689)and is on target, particularly
when you consider our'system' of industrial rela-
tions. We need to chart a new course in Canada
where we conduct our work relations under a dif'ferent'system' or philosophy. The Macdonald Com'
missioners were right as far as they went that we
Canadian pubtic paticy - Analyse de Potitiques, Xll:supplemenltl27-1321986 Printed in Canada/lmprim6 au Canada
l'' must take some of the excessive strife out of thesystem and become less adversarial, but they didn'tgo far enough and present a realistic action plan
for a new system.Of course, this failure cannot be remedied by
this short piece, but it may be helpfu! to outline anew direction that could help Canada break away
from its illustrious strife-ridden past and embracea better system of industrial relations where there
is greater co-operation and consultation between
competing interests.
A New System ol Baqaining
There is an irnportant cause of labour strife in
Canada not emphasized in the Report and that isthe way that labour and management conduct theirnegotiations. My own experience in trouble shoot-
ing rnore than 100 labour disputes as Deputy Minis-
ter of Labour for British Columbia dudng nine years
suggests that the most frequent reason for thebreakdown and bitterness of collective bargaining
is the structure of negotiations where positional as
opposed to principled bargaining dominates and
corrodes the relationship between the parties.
Collective bargaining is more often an experi'ence in position bashing than problem solving, re'
sulting in a failure to separate the relationship from
the problem, ignoring alternatives to the rigid posi'
tions taken and chilling effective communicationbecause the processes of inventing options and
making commitments are comingled.Roger Fisher of the Harvard Law School and
Director of the Harvard Negotiation Proiect is one
of the most persuasive critics of our toxic habit ofpositional bargaining. He explains:
When negotiators bargain over positions,
they tend to lock themselves into those posi'
tions. The more you clarify your position and de'fend it against attack, the more committed you
become to it. The more you try to convince the
other side of the impossibility of changing your
opening position, the moredifficult it becomes
to do so. Yourego becomes identified with your
position. You now have a new interest in 'sav-
ing face' * in reconciling future action with pastpositions - making it less and less likely thatany agreement will wisely reconcile the parties'
original interests. (Fisher and Ury, 1981:5.)
128 James Matkin
Bad labour disputes almost always exhibit thisrigidity and 'saving face'dilemma in my experience.
Regarding the conduct of negotiations, the Mac-
donald Commission did endor$e pre-negotiation
review or preventive mediation as it is commonlychlled- The Commission judged 'that preventive
mediation programs can contribute to improved
labour/management relations and can help toreduce collective bargaining disputes'.
The advantage of the pre-negotiation review is
that it will help the parties to get off to a better start
by early identification of the major issues that need
to be addressed. The reviews will give the parties
the opportunity to develop a problem solving ap-
proach as opposed to the toxic experience of posi-
tion bashing.Preventive mediation is a valuable beginning for
a new direction but it is certainly not enough! For
example, the existing voluntary program in Ontario
has been in place for several years but only a small
number of bargaining parties take advantage of the
service. lf we accept the challenge of creating a
new system vvhere a key obiective is to change the
adversarial attitudes of employers and employees
towards each other, then we must influence a large
part of the workforce.The basic problem with greater co'operation
between labour and management in the private sec-
tor is the attitude of botft sides. Employers have
been hurt in the past by union militancy and opposi'
tion to the market values that are at the core of in'dustrial success in our economy. The result is thatemployers are increasingly convinced that the on'ly hope is to operate'non-union'. This employer at'titude is reinforced by the experience in the United
States where unionization has fallen to a mere 18
per cent of the paid wbrkforce and the non'uniongrowth industries like the hlgh tech companies are
viewed as the wave of the future.Two models of a new system for Canada are
available from comparative experience - first,there is the non-union model of the United $tateswhere fewer and fewer employees in the private
sector workforce belong to unions and the resultis a much more productive and flexible industrywhere lahur strife is non-existent. But Canadians
will find it very difficult to opt for the non'unionmodel because of our hislory, values and political
culture and the greater unionization of our primary
industries.
aThe other model is Japan where there is a
rnarvellously co-operative attitude among both
employers and workers. Of course many distinctive
cultural factors make the Japanese experience uni'que and of little comparative value to Ganada, but
some basic concepts certainly are transferable. For
example, the Commission evaluated the applicabili'ty of 'Japanese-Style Human Resource and Man-
agement Practices'and concluded in favourol iointconsultation and the enormous value of lhe Japan
Productivity Centre.
Canada and Japan share a highly unionized
work force where the union leaders usually do not
share the free enterprise philosophy. (Ihis fact also
separates our country from the United States be-
cause their unions seem much more $upportive of
the market economic system.)
The Report also notes that in Japan enterprise
unions rather than trade unions prevail. This sub-
ject deserves much more carefulattention by North
Americans who have too guickly dismissed enter'prise unions as ineflective, and dominated by
management. As a background paper for the Com'
mission explains:
Perhaps the key merit of enterprise unionism
is the fact that the union tends to be solidly sup-
portive of the interest of raising the efficiency
in its own plant. Since the elected union officers
are also employees of the enterprise, they are
more familiar with the history, personalities,
operations and future prospects of the company.
This contributes to a more informed input into
the various union-management consultative for'
ums which operate on a frequent, regular basis
in many enterprises. The net effect of this struc'
ture is that union representatives play a far more
active role in the management of the enterprise
than do their Western counterparts. {Weiler,n.d.)2
It is indeed remarkable that in Canada, Japan'
ese style enterprise unions are illegal because our
laws prohibit a company from interfering with
unions, which includes helping them by providing
benefits. As George Adams explains, employersupport for a trade union 'is fatal to an application for
certification or the recognition of an agreement'.
(Adams, 1985:a98.)
Unlike Japan our law prohibits a close relation-
ship between employers and unions even when thepurpose is to assist the unions. The result of thisphilosophy is to strengthen the adversarial nature
of our system of industrial relations thereby dis-
couraging the parlies from sharing a common in-
terest in the success of the enterprise. Union and
management play the game in Canada like the of-
fence and delence of opposing football teams.
Ol course, studying the Japanese productivity
miracle is au fait and there is much more that can
be applied in Canada than the sceptics believe
{witness the implementation of Japanese practices
in US joint venture plants).
How do we change our system to create a dis-
tinctive Canadian modelthat incorporates the best
of the Japanese and United States experience?
Proposal 1
ln order to bring our best resources to bear in the
improvement of our industrial relations climate,
consideration should be given to the creation of a
national dispute resolution centre that would offera variety of services related to conflict management
and industrial relations. There arc a number ofmodels for such a centre in the United States -from the long-established American Arbitration
Association to the most recent Dispute Resolution
Centre established at the Will iamette School of Law
in Oregon providing avariety of services including
training, mediation, arbitration and research. Ourpoor reputation for conflict resolution in labour/
management relations is the justification for thisproposed centre.
According to Thomas Peters and Robert Water'
man, Jr., authors ol ln Searctt of Excellence, suc'
cess in excellent companies comes from the recog'
nition that people make business successful
through their productivity. A dispute resolution cen-
tre could help industry and labour to apply this prin-
ciple to the very important subiect of conflictresolution. Support for the centre could come {rom
a blend of inputs from both the federal and provin'
cial governments recognizing the divided character
of constitutional law over industrial relations inCanada.
Canada is the only country in the world where
the primary responsibility for industrial relations
does not fall under the wing of the federal or
The Future of lndustrial Relations 129
national goyernment. ls it mere coincidence thatwe are also unique among nations in our poor
record of labour strife? I believe there is a connec'tion between our uneven record in labour manage'
ment relations and our decentralized responsibili'ty or jurisdiction.
The Heport does identify the evolution of labour
legislation into different phases in accordance with
constitutional development. For example the R+port states that 'Until 1925, iurisdiction over labour'
relations matters was assumed to rest with the
federal government . . . The Snider case (Toronto
Electric Commissioners v. Snidel of 1925 chang-
ed this presumed division of powers. Labour rela'
tions, the Privy Councildecided, fell under proper'
ty and civil rights, and thus under provincialjurisdic'
tion.'{Vol. Two, p.672). Yet, the history shours thatwhen the constitution was first addressed, the
Canadian courts viewed 'the social facts of in-
dustrial relations disputes to be of such national
irnportance that the (Federat) legislation was
upheld as being of national concern by a judicial
headcount of ten to two. ln 1925 the Privy Council
disagreed.' (Dorsey, 1 98il:72.)
ln the Report the discussion of collective bar'gaining begins appropriately with the topic of'jurisdiction' and Canada is compared with the
United States whose record in industrial relations
is much better, particularly during the last 20 years.
The history of constitutional law development bet'
ween Canada and the United States is certainly one
subject that is worth further examination.
The allocation of government responsibilitygoes to the heart of our system of industrial rela'
tions. The result of our constitutional law in Canada
is that even major export industries like lumber,
mining and steel fall under the provincial labour
power in Ganada.
By contrast, the constitulional iurisdiction over
labour management relations in the United States
had the opposite history with the courts first de'
ciding in favour of state power and then changing
their minds in favour of federal dominance over
labour/management re lations. National power h as
had a very positive effect in the US, while the
dominance of provincialjurisdiction in Canada has
resulted in a more politically charged climate with
more bitter disputes lasting longer because of the
closeness of the provinces to the participants and
130 James Matkin
the political partisanship that this engenders. This
conclusion is more apt for BG and Quebec than itis for some of the other provinces.
My experience working in British Columbia sug'gests that the federal government is more suc'cessful in reducing the polarization that exists be-
tween labour and management, largely because
there are fewer partisan influences at play. Anotherproblem with provinciat jurisdiction is the fragmen-
tation of policy and administration.3We are not helplessly committed to the status
quo because the power of reform lies with ourjudiciary. When Alex Smith completed his thesiscomparing the constitutional law in the two coun'
tries he concluded 'ln Canada the federal com'
merce power has not been as broad as the
economic needs of the nation'. (Smith, 1963:180.)
Proposal 2Canada should revisit its constitutional law regard'
ing industrial relations. The Canadian courts could
follow the lead of the United States Supreme Court
and update the interpretation of the trade and com-
merce clause under Section 91(2) of the BrifisfiNorth America Act The US situation paralleled ours
untilthe Supreme Court changed its mind in 1936.4
The most straightfonrvard approach is for argument
to be made before the Supreme Court of Canada
to revise the earlier incorrect constitutional deci'
sions of the Privy Council that the lion's share oflabourlmanagement relati ons fal I u nder provi nc ial
iurisdiction.Whether our constitutional law is changed or
not the nationalgovernment must assume greater
responsibility for the improvement of our poor
record of collective balgaining. At least the federal
spending power offers plenty of scope to influence
the situation.
The Public Sector
The Commission dlso tackled the subiect of 'Public
Sector Labour Relations' and correctly concluded
that the'central issue' is whether a major change
in policy is warranted regarding the right of public
sectoremployees to strike. Again lhe Commission
faltered in making any clear recommendation for
reform. The Beport does conclude that'The right
to strike or lock out must be rationally limited by
the need to maintain the health and safety of thepublic'.
The Commission documented the problems
with fullcollective bargaining rights in the public
sector, including the high level of settlementsresulting from 'the overly permissive environment
surroundlng public sector-wage determination in
the past two decades'. A further problem is the
significant cost of strikes and lockouts being borne
by innocent third parties, who are often customers
or suppliers. The devastating impact of a postal
dispute on small businesses offers vivid evidence
of this problem. Also, disputes in Canada last too
long, particularly in the public sector.
These significant problems deserve some policy
changes.
Proposal 3The right to strike in the public sector of Canada
should be curtailed and a system of 'med-arb' in'
troduced to govern collective bargaining. Med'arb
is a combination of mediation and arbitration per'
formed by the same tribunal thereby placing more
emphasis on negotiation than on adiudication. The
right to strike is not essential to healthy collective
bargaining in the public sector if there is some
pressure on both parties to require them to nego-
tiate instead of relying on binding arbitration to'getthem off the hook'. When the med'arb alternative
is administered by an impartial agency then the par'
ties must genuinely negotiate before they can
receive any third party assistance.
Strikes of essential workers, like firefighters or
nurses, are too damaging to the public who are
seriously threatened and, as a result, these dis'putes distort the balance of power in collective
bargaining. The alternative of compulsory arbitra'
tion is increasingly unattractive to both sides
because of the poor quality of lhe decisions. Col-
lective bargaining negotiations are the preferred
method of resolving conflicts with a strike disincen-
tive added in order to create a better balance ofpower between the parties.
The experience of New York City proves that the
med-arb alternative preserves negotiations as theprimary method of dispute resolution. For more
than a decadeover2OO,$0city employees have had
a successfulexperience with med'arb. The grava'
men of their success has been the insistence of the
board that adrninisters the program that binding ar'
bitration is not available untilthe parties have ex-
hausted the possibilities of negotiation. Therefore,
collective bargaining has not been chilled in New
York City by the lack of the right to strike and in-
deed over 90 per cent of the contracts have been
negotiated without an arbitrator. (Anderson, 1982.)
Conclusion
We should strive to achieve in Canada a new reality
reg ard i n g labou rlmanagement relati on s by ch an g-
ing our system away from the adversarial model
and introducing a more principled approach in the
conduct of negotiations. The establishment of a na'
tional dispute resolution centre may help us tocreate a new system. Also, a major shift is needed
in favour of greater federal jurisdiction over our ma'jor industries. Our success in industrial relations
is a national problem that requires national con-
stitutional responsibility.The introduction of a new system of public sec'
tor collective bargaining based upon med-arb and
the protection of innocent third parties preserves
collective bargaining without the damage of public
sector strikes. lt is important to emphasize that the
New York City system worked because all of theparties participated in the reform and wanted it towork and any reform in Canada should follow thisconsultative approach.
The gradual evolution toward stronger enter-
prise unionism in Canada could be the most signifi'cant change we make to improve the future of our
labour management relations. This reform would
encourage a more co'operative relationship in the
work place, with management and unions treating
each other like the offence and defence of the same
football team instead of opposing teams.
Notes
'l Unpublished report to BC governrnent prepared byPublic Affairs lnternational, from Washington, DC,
1985).2 See also Brody (1985).
3 See Scott (1960).
4 See N.L.R.B. v. Jones and Laughlin Stee/ Gorp. 301
u.s. 1 {1934.
The Future of lndustrial Relations 131
Adams, George (1985) 'Canadian Labour Law,'Canada Law Book.
Anderson, Arvid (1S?'lnterest Arbltration in NewYork Gity,' The Arbitration Joumal, 37:16.
Brody, Mlchael (1985)'British Unions Go Japanese,'Fortune, Dec. 9.
Dorsey, James E. {198li) Canada Labour RelationsBoard (Carswell).
Fisher, Roger and William Ury (19S1) Getti ng fo Yes;Negotiating Without Qiving ln (Boston: Hough.ton, Mifflin)
Peters, Thomas and RobertWaterman, Jr. (1982) tnSearch of Excellence (New York: Harper &Rowe).
scott, F.R. t1$0)'Federat Jurisdiction over LabourRelations - A New Look,' McGill Law Journal6:153.
Smith, Alex (1963) The @mmerce Power in Canadaand the United Sfabs (foronto: Buttenrvorths).
Weiler, Joe (n.d.)'The Japanese Labour RetationsSystem; Lessons tor Canada,' unpublished.
The power of Canada's unions: ALabour
i-:i',, Tasha Kheiriddin : .l
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Perlsions
Ullorkens,NOT
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Wo*enNOr
Canadian unions are living a paradox. For the past decade, theirmembership has remained relatively flat, at between 30 and 31 percent of non-agricultural workers, after dropping from a high of 34.6%in 1997. The decline in manufacturing jobs, the rise of temporary and
2A14. They claim it will hurt the Canadian auto industry by removingtariffs and thus decreasing the price of European imports. But thedeal would also vastly increase the number of cars Canada exports tothe EU, and provide a boon to the auto parts trade - and Canadianmanufacturing iobs. As the next federal vote looms ever closer,Canadians can expect the war of words between labour's defendersand critics to intensify. For the Tories and the NDP, maintaining thecurrent political polarization in the House serves both their interests,but with the Liberals on the ascendancy, it is unlikely that it will be assharp. But whether as a wedge issue or an organizational boost, therole of labour in federal politics hasn't been this important in decades.It promises not only to influence the campaigns, but to openopportunities to more fully debate issues such as right to work laws,trade, and pensions, from all sides of the political spectrum.Tasha Kheiriddin is a political writer and broadcaster who frequentlycomments in both English and French.
James Matkin a year agoWe are witnessing a long term decline in trade union influence andmembership everywhere including my province of British Columbiawhere a few decades ago strong and militant unions ruled the day.What changed? The economy and public opinion. The private sectorhad to hunker down in the new global economy and be competitivenotwithstanding a high wage and benefit worldorce. How? Theanswer unequivocally was technolory. The BC forest industry aresuper efficient with super machines and few employees. But thisadvance decimated union membership so that Jack Munro'sinfamous IWA went from being the largest union in the seventies tofall so low it no longer exists and was swallowed up in union mergers.But unions continued to flourish in the public sector but not withvoter approval as the election of Bill Bennett defeating Dave Barretton a public restraint campaign proved. After the turmoil of inflationand public sector restraint provoking a one day general strike in r9B3things settled down in BC. Collective bargaining moved away fromwage conflicts and focused mostly on job security. Now three decades
4
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later it is "deja vu e all over again" as Yogi Berra put it. I stronglydisagree with the thrust of Tasha Ktreiriddin's opinion. Big laborshould not pick one federal party or another to follow. They shouldsupport the issues that advance the interests of their members -workers - as should big business and both labor and business shouldnot bring party politics to the workplace. Parties will make mistakeswhether they think they are friends of the left or right. Canada isunique as the only Western democracy that has not federallized ormodernized labor relations. The Canadian constitutional law in thisarea is governed by the r9z5 Privy Council decision Snider findingthat labour relations is exclusively a matter of "properby and civilrights" and not as in all other federal countries a matter of "trade andcommerce". Therefore only 6 % af workers in Canada come under theCanada Labour Code. The situation is dramatically different in the USand Australia for example. This weak federal constitutional presencefor labor further underscores the ill wisdom of Tasha's advice onfederal politics.