QUFA UPDATE: News That Matters

No agreement at Queen’s
From the Kingston Whig Standard, Friday July 10th, 2009.

Queen’s University and the association representing many of its support staff are at a stalemate over a new one-year agreement.
The university, which is facing a ballooning deficit, and the Queen’s University Staff Association, a non-unionized group representing support staff, have apparently failed to reach a new deal on salaries and benefits.
The university says it has made an offer to the association that includes a 1.25% salary hike and improvements to benefits that is “reasonable in the current economic climate.”
The head of the association says it will be presented to the membership but that the deal would not be recommended for adoption.
The university took the rare step of issuing a news release announcing its offer to the association two weeks before members of the group, which represents about a third of the support staff at the school, will get a chance to vote on it.
Rod Morrison, Queen’s vice-principal of human resources, said the university wanted to publicize its offer to prevent “miscommunication” being spread, although the full text of the proposal has been posted on the association’s website.
Members of the association, who pay $6.50 a month to belong, are scheduled to vote on it during two sessions later this month.
“This is a really challenging financial time at Queen’s,” Morrison said, noting the school, like other universities in Ontario, faces a multi-million dollar deficit that officials have blamed on the slumping economy, rising costs and government grants that have not kept up with enrolment.
He called the offer, which also includes improvements to the medical, dental and tuition plans, “fair” given the school’s financial situation.
Spring Forsberg, the head of the association, said that the university’s offer would be presented to the membership but that “for the first time in a long time,” the association would not endorse the administration’s offer.
“We have in the past had a collegial and communicative agreement to work with the university in the best interests of both parties, and while we do recognize the fiscal constraints and the difficult financial position the university is in, this proposed agreement does not meet the standards of our association.”
Lacking from the proposal is an idea floated by principal Tom Williams earlier this year that staff should take as much as a week off without pay to reduce the university’s deficit.
The school says 70% of its bud – get goes to employee salaries and benefits and it would save $700,000 a day if workers agreed to unpaid furloughs.
That idea was roundly rejected by employee groups and Morrison said the school would not proceed with the idea unless all employee groups were willing to go along with it.
“That would be an all-or-nothing proposal, and we couldn’t really ask one group to agree to that if everyone wasn’t going to agree to it,” he said.
In May, the university’s board of trustees “reluctantly” approved a budget that projected an $8.3- million deficit in Queen’s $360- million operating budget for the coming year, a deficit that is projected to swell to $33 million by the spring of 2012. It was the first deficit budget in school history.
At the time they passed that budget, trustees called on the principal to reduce costs in upcoming negotiations with employee groups, including the staff association

St. FX rethinks investments after market meltdown
Elizabeth Church
From Globe and Mail Friday, Jul. 10, 2009

St. Francis Xavier University, the small Nova Scotia campus known for its loyal alumni and distinctive school ring, is rethinking one of its less publicized traditions – risking nearly all the money it gets from donors in the stock market.
The unconventional practice – followed by the school with great success for decades – proved disastrous last year when stock prices collapsed and about half the value of the school’s endowment fund was wiped out in a matter of months. The upshot was the worst performance for a university fund in Canada last year and a reduction of about $1-million in the school’s endowment income. That’s prompted cost cutting for this September and some soul searching on the part of the university board members about the way they manage donors’ dollars.
“It was huge,” Ramsay Duff, vice-president finance for St. FX, said in summing up the loss. This time last year – July 6 to be exact – the university hit a high of $100.1-million in its endowment fund, money donors gave to the school to pay for items such as scholarships and academic posts. The market meltdown that followed left the fund with $50.1-million by the end of December, a 43-per-cent drop in value from the start of the year, or about double the average loss for Canadian universities.
The reason: 90 per cent of the St. FX endowment was invested in the Canadian stock market with the rest in U.S. equities. Most other universities put an average of 50 per cent invested in stocks. When markets started tumbling, St. FX had no protection in the form of bonds or other less risky investments to break the fall.
Mr. Duff said the university’s unusual approach, which runs counter to common investment practices, has been in place since the endowment was established in the 1960s. “Our board at the time believed that the additional risk of our model was justified by the exceptional returns and the confidence in achieving those returns,” he said.
Over the past 15 years, the university’s investments – managed by a small group of volunteers – have achieved some of the highest returns in Canada, allowing for generous annual payouts. That winning streak ended last year, and in response the board commissioned a study by external consultants, has cut stock investments by about 15 per cent and plans to reduce them even further. Some of last year’s losses have already been recovered, Mr. Duff said, but would not provide numbers.
St. FX also is on the hunt for new members for the volunteer committee that oversees the university’s investments. “A number of them are in their 70s,” Mr. Duff said, and the school needs to do some succession planning.
If that search is unsuccessful, he said the university may break with another St. FX tradition and hire professional managers, the practice followed by other universities.
Former New Brunswick premier Frank McKenna, a St. FX grad and the new chair of its board of governors, said he has not yet been briefed on the issue and will attend his first meeting this fall.
While 2008 was bleak for most endowments because of investment losses, new donations meant that a few universities in Canada managed to break even for the year. Those included Toronto’s Ryerson University and the University of Waterloo. King’s University College at the University of Western Ontario added to its small endowment, because gifts outpaced its investment losses.
Bruce Curwood, a Toronto investment adviser who counts several university endowments among his clients, said 2008 caused many boards to reconsider the risks they were taking. “I think people were surprised by the magnitude and the velocity of the downturn,” said Mr. Curwood, who is a former treasurer of the University of Toronto. “All of us have been looking through rose-coloured glasses. We’re realizing markets are far more unpredictable than we thought.”

Downturn brings new bargaining tactic: Do nothing
By Tavia Grant
Globe and Mail. Thursday, Jul. 09, 2009

Wage freezes for government employees. Pay cuts for auto workers. Municipal workers on the picket line.
The recession, on top of global competition and the shift to part-time, casual contract work, is creating the toughest year for the labour movement in decades.
Yet behind the headlines of strife and strike lies a much more complex picture. For one thing, strikes remain the exception rather than the norm. For another, many employers and their staff are finding new ways to cope in a downturn that has left everyone gasping, say lawyers, union leaders and academics.
Rather than run the risk of a dispute, many companies and unions are doing nothing – letting existing contracts run their course and putting negotiating on hold, a development previously unheard of, even for long-time labour lawyer Stewart Saxe.
“I’ve been in this business for 30 years, through other recessions, and I’ve not seen anything like this before,” said Mr. Saxe, Toronto-based partner at Baker & McKenzie LLP.
He estimates that 25 per cent of the employers he represents should be in contract talks right now, but aren’t.
It’s easy to see why: Neither side wants to run the risk of a labour dispute when the economic outlook is murky. No one wants a strike. So companies and workers either let the current contract run its course, or just try to extend it – as Air Canada is proposing to do. Last month, outside municipal workers in London, Ont., extended their collective agreement by two years, with some wage increases.
It’s a short-term coping mechanism, but “prudent,” Mr. Saxe said. Unions realize their old contract is probably better than any new one; employers don’t want to risk a workplace disruption and the hit to morale that negotiating in a hostile economic environment could bring.
So they’re putting off tough talks for another day.
“Keeping what they have looks pretty good in some circumstances,” said Israel Chafetz, partner and labour and employment lawyer at Vancouver-based Taylor Jordan Chafetz.
And while it might look like 2009 is the summer of the strike – Toronto and Windsor, Ont., municipal workers are off the job, as are B.C. paramedics and social service workers in Ontario’s Lanark county – the reality is that recessions tend to result in fewer, not more, strikes.
Both work stoppages and days lost to work stoppages have plunged in recent years, Statistics Canada figures show. So far this year, there have been eight major work stoppages, according to Human Resources and Skills Development Canada’s most recent bulletin, not including the high-profile strike by City of Toronto workers.
The waning number of strikes “is a sign of union weakness, rather than strength,” said Larry Savage, an associate professor who specializes in labour at Ontario’s Brock University.
“Historically, unions won their hard-fought gains through conflict rather than co-operation. What we’re seeing now in some sectors [where unions are agreeing to freeze wages and working conditions] is therefore a sign of labour weakness.”
Declining union membership is also eroding workers’ bargaining clout. In 1988, almost 40 per cent of Canada’s work force was unionized. Last year, it stood at 29.4 per cent, down from 29.7 per cent in 2007, according to Statscan. In the private sector, it’s just 16.3 per cent.
“Employers are using this climate to get back as many things as they can,” said Pradeep Kumar, professor emeritus at Queen’s University in Kingston, who has examined labour relations for the past 40 years. Many agreements, for example, include multiyear wage freezes, cuts to benefits or longer working hours.
Ken Neumann, national director of the United Steelworkers who is trying to secure a new deal for 3,300 Vale Inco workers in Sudbury, calls the current bargaining climate “the worst I’ve seen in 30 years.”
Even in this environment, however, unionized workers are still managing wage gains. Major collective bargaining settlements reached in April show average increases of 2.6 per cent a year – a decline from deals that were reached in February and March, but increases nonetheless. Unionized workers tend to earn more than their non-unionized counterparts.
In some cases, both sides are bending. In March, courier and logistics company DHL Express (Canada) Ltd. and the Canadian Auto Workers signed a new agreement that will cover about 2,400 workers. Employees got a wage increase, along with improved severance pay. In return, DHL got more flexibility to schedule employees as needed.
“We now have the easier ability to re-map and re-route driver routes,” which is helping the company run express service deliveries, said vice-president Andrew Williams. “Both sides recognized times were tough, but we knew it was necessary to get a deal put together.”
Sharing in company ownership is another key labour development – notably in the auto sector, where unionized workers are swallowing concessions in exchange for a partial share in the business.
A broad shift to employees as owner-operators, in areas such as trucking and repair businesses, “is the most interesting development I’m seeing,” Mr. Chafetz says. “It changes the incentives.”
Organized labour is at a crossroads, says Prof. Savage. On one hand, new ownership at some of the world’s largest car companies is giving trade unions a new voice. On the other hand, unions may be forced to give up gains this year that had taken decades to achieve.
“Ultimately unions need to take responsibility for their own futures by building their members’ capacities to defend their interests and promote their particular vision for society, independent of employers or politicians,” Prof. Savage says.

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