Downturn brings new bargaining tactic: Do nothing
The Globe and Mail
By Tavia Grant
Wednesday, Jul. 08, 200
Faced with a murky economic outlook, many companies and unions are opting to put tough negotiations on hold for another day. 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.
Update from VP HR on salary and benefits discussions
Tuesday July 07, 2009
I want to take this opportunity to continue sharing timely information about our discussions with QUSA aimed at reaching a new Memorandum of Agreement on salaries and benefits.
As I have mentioned previously, our goal in these discussions is to achieve a Memorandum of Agreement that respects the important role staff play at the university while recognizing the university’s financial situation.
This year for the first time in living memory, Queen’s is running an operating deficit ($8.4 million) and our current projections for the next two years are higher.
We need to slow the growth of our compensation budget to help address long-term budget deficits, and we’re making every attempt at this time, to be successful without resorting to lay-offs.
If discussions don’t end in agreement on ways to slow compensation growth, lay-offs may be unavoidable. Western has already announced staff reductions and Guelph is planning to lay off sessional instructors and teaching assistants.
For your information, at a meeting with QUSA on July 6 we introduced a salary and benefit package for consideration that we believe is reasonable in the current economic climate. QUSA has presented this package to their membership.
This package includes a scale increase of 1.25 per cent for all salaries in grades 2 to 9, except those that are above the range maxima effective July 1, 2009, and other initiatives to give money back to staff including:
- A one-time payment of $300 less statutory deductions to each general staff employee within grades 2 to 9 inclusive providing they are actively employed on July 1, 2009
- Dental Plan premiums paid 100 per cent by the Employer as of September 1, 2009
- Tuition Support Plan for General Staff (excluding R. G & C) increased $200,000 to $500,000 providing more access to this benefit, and
- A Supplementary Medical Plan drug card which general staff employees, have been requesting for many years so there is no upfront payment or administrative expense claims for prescription purchases, effective January 2010.
Any agreement will be retroactive to July 1. Until we reach an agreement, current salary and benefits will remain in place.
For more information about the current financial situation, please refer to recently added “Frequently Asked Questions” at http://www.queensu.ca/principal/financialupdate/faq.html
V-P (Human Resources)