Work stoppages in the federal private sector : innovative solutions

Executive Summary

  • Chapter 1: Introduction
  • Chapter 2: Person Days Not Worked in the Federal Private Sector
  • Chapter 3: Causes of Work Stoppages and Their Economic Impacts
  • Chapter 4: The Options
  • Chapter 5: Overcoming the Challenge to Change Union-Management Relationships
  • Chapter 6: Consensus Options

Chapter 1: Introduction

The Terms of Reference of a "focused" study on work stoppages are briefly examined, noting that the causes and management of work stoppages encompass much of industrial relations law and policy. Comments are also made on the mandate - to provide "options" to manage work stoppages - distinguishing this study from past inquiries where the Terms of Reference required the commissioners, where appropriate, to make recommendations for legislative change. The report replies to suggestions that somehow the study was intended to favour employers, pointing out the neutrality of most options and others tending to favour unions, while submitting that the underlying need for competitiveness through reduced work stoppages is a shared interest of the stakeholders if it can be achieved in a mutually acceptable fashion. The introduction concludes with remarks on the meaning of the "Federal Private sector" defined similar to the jurisdiction described in the Canada Labour Code, Part I.

Chapter 2: Person Days Not Worked in the Federal Private Sector

In response to concerns raised by stakeholders, a review was conducted of the results of an article published by the British Office for National Statistics describing Canada as having a higher rate of person days not worked (PDNW) from work stoppages than any other G-7 country and ranking Canada second amongst states in the Organisation for Economic Co-operation and Development (OECD) between 1997 and 2006. These results followed Canada 's already dubious distinction of having the highest PDNW rate from 1986 to 1995.

Caveats concerning the limitations of the British study raised by its author and others were examined including consideration of the sources of data on work stoppages, the different thresholds used by countries for counting PDNWs, the variance in types of strikes included, and some of the political and structural causal links that affect work stoppage data, in particular union density. Our review concluded that despite these caveats, the British study was generally reliable in depicting Canada as having one of the highest levels of person days not worked in comparison with other countries.

To provide a better benchmark, data was developed by the Research and Data Development Division (RDD) of the Strategic Policy, Analysis and Workplace Information Directorate of HRSDC comparing Canada 's situation with that of United States , but using a standardized threshold and rates of unionization. The ratio of the average PDNW in Canada versus the United States for the period in question dropped significantly from three times more PDNW in Canada to 1.33 times more, but still a significant disparity, particularly as United States data includes some indirect PDNW which are not counted in Canada .

Further data was developed to determine the relative contribution of the Federal Private Sector to Canada 's total PDNW. The federal jurisdiction ( CLC Part I) was found to be the highest relative contributor in Canada , surpassing the provincial private jurisdiction by an unadjusted ratio of more than four times. This data confirmed that Canada must work harder at finding ways of reducing the number of PDNW due to labour disputes and that the Federal Private Sector, with its relatively higher PDNW and comprising significant national infrastructure industries, should be the focus of attention.

Because some of these results were not readily apparent, our analysis provided options calling for better data collection and more transparency in the breakout of information relating to work stoppages to facilitate accurate comparisons with the EU and OECD and the contribution of different jurisdictions. At a minimum, work stoppage data comparisons with the United States should be compiled on an annual basis and published by the federal government. In addition, the establishment of work stoppage goals could contribute to achieving results that would better protect Canada 's international reputation in the increasingly competitive global economy.

A statistical review was undertaken of some of the factors relating to work stoppages and their causes. It was determined that between 2000 and 2007 most of the stoppages occurred in the telecommunications, broadcasting or transportation sectors and that mergers and acquisitions were a factor in 74% of the PDNW during that time. Moreover, the very large majority of PDNW arose from two or three major work stoppages each year.

The total number of PDNW is calculated from the number of work stoppages, their duration, and the size of the bargaining units participating in the stoppages. It was determined that the Federal Private sector has experienced a definite trend, shared worldwide, towards fewer work stoppages, although it was a more moderate decrease than experienced in other jurisdictions in Canada. While a number of factors could account for the falling incidence of work stoppages, some would include: a decrease in the number of collective agreements, an increase in the length of agreements and a decline in union density (the degree of unionization).

The duration of work stoppages in the Federal Private Sector increased dramatically starting in 1995, continuing on an upward trend until 2004 after which it rapidly fell back to more traditional levels by 2007. This situation distinguished the sector from other jurisdictions in Canada where the duration of work stoppages had seen only moderate increases. Given that PDNW decreased significantly provincially during this period, the increased duration of work stoppages in the federal sector appears to have been a major contributing factor.

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Chapter 3: Causes of Work Stoppages and Their Economic Impacts

Aggregated information obtained from the Federal Mediation and Conciliation Service of Canada (FMCS) on causes of work stoppages is described. There was a general consensus that work stoppages were very idiosyncratic, making them difficult to classify. Often they appeared to occur as a result of a combination of problems involving difficult bargaining issues, personality and conduct of negotiation obstacles arising in inopportune circumstances.

FMCS mediators were of the opinion that economic concession bargaining, and mandate and authority issues at the bargaining table, were significant causes of the major work stoppages occurring in the sector. Additionally, problems with Canadian Industrial Relations Board (CIRB) procedures were identified as a factor in one third of the major work stoppages occurring after 2000, confirming the concerns of stakeholders raised with respect to the Board's activities. For confidentiality reasons, the FMCS could not provide information on conduct of negotiation issues, although it was clear that they had played a significant role in a large number of work stoppages.

Stakeholders provided more limited information, but also described a wide variety of causes for major work stoppages. These appeared to support the statistical findings that transition issues from mergers and acquisitions were a major factor in work stoppages, with CIRB difficulties also frequently cited. Some unions indicated that competitive forces and the demands that employers were making on unions for concessions were important cause of major work stoppages.

An analysis was conducted of some of the determinants generally identified as giving rise to work stoppages with the intention of linking them to options to reduce their incidence and duration. Initially, bargaining table factors were considered, such as the relationships and attitudes of the participants, the skills of negotiators and mediators, the mandate and authority of negotiators, and problems and issues relating to the efficiency of the bargaining process.

In addition, the subjects of negotiations were reviewed as work stoppage determinants. These included tangible and economic bargaining issues and theories relating to the causes of work stoppages. Analysis also included the challenges in predicting work stoppage outcomes from changing power relationships in mergers and acquisitions and from governmental policy decisions. These introduce competitive forces, and with them increased cost constraint bargaining, into a previously monopolistic sector.

The behaviouralists' perspective was considered. It views strikes not in terms of rational economic factors, but as a "collective voice" of discontent premised on collective worker resentment around issues such as fairness and legitimacy. Work stoppage duration issues were also examined, given the non-economic factors which sometimes appear to contribute to the duration of work stoppages when rational economic outcome analysis no longer applies.

The primary causes of work stoppages in the Federal Private Sector were thought to be:

  • organizational change from restructuring driven by employer demands for improvements in productivity;
  • behavioural and process factors in collective bargaining, such as attitudinal, competency and efficiency factors (including CIRB processes) that can prevent meaningful negotiations from occurring; and
  • intra-organizational issues raised away from the bargaining table, but affecting the authority and decision-making processes.

No reliable conclusions on the causes for the duration of work stoppages were offered. Work stoppages were affected by cost-benefit considerations, particularly in the initial stages, but thereafter it was thought that the clashes of productivity demands, particularly those relating to worker security, raised fundamental interests that compromised the ability of either side to back down without a long work stoppage occurring. The absence of legislation banning replacement workers did not appear to be a factor in the increase in the duration of work stoppages that occurred after 1995.

Some comments were offered with respect to predicting work stoppages. In the view of the stakeholders, the risk of work stoppages relates primarily to the nature of the issues being bargained by the stakeholders and, thus, prediction is not readily made with respect to sectors and regions until this information can be obtained from the field. No comments were supplied by the Labour Program due to confidentiality concerns. Given that mergers and acquisitions have accounted for a major portion of the significant work stoppages in the last decade, future restructuring situations once identified would appear to present a heightened risk for a work stoppage. Since restructuring appears to be occurring more often in the telecommunications sector because of competitive pressures, this sector was identified as one where future work stoppages could be expected to occur. Data was provided on upcoming collective bargaining situations and past bargaining history, but it was not considered useful without the development of more sophisticated assessment tools. The data did however point to situations, such as those involving Air Canada in 2009, were a considerable number of agreements expire, increasing the risk of a work stoppage next year.

More reliable predictions will require the creation of longer term systematic collection and analysis of pertinent information relating to work stoppages, combined with the development of enhanced assessment procedures and analytical tools within the Labour Program. Even then, the prediction of work stoppages faces inherent limitations due to the idiosyncratic nature of each event.

Finally a brief analysis was attempted of the economic consequences of work stoppages, but it was concludes that research on economic impacts has tended to focus on industries that operate in a competitive environment and do not share the strategic importance of firms falling under the federal private jurisdiction making that analysis of lessened relevance to this report. Given that the Federal Private Sector provides our country's core economic infrastructure in transport, communication and financial intermediation and arguably merits greater attention, an option was advanced to expand activities to measure the direct and indirect effects of work stoppages in the federal private jurisdiction on third parties. This exercise would also require assessing the potential importance of work stoppages per sector and taking into account the behavioural adjustments of third parties. Information from this analysis could be combined with results generated from work stoppage predictive analysis discussed above to perhaps help to reduce the economic costs of work stoppages under federal jurisdiction by suggesting to companies at risk of a work stoppage with high economic impact that the FMCS proactively intervene to receive training tailored to their needs, or by sponsoring special sessions on best practices in conferences on industrial relations.

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Chapter 4: The Options

Improving union-management relationships in a more concerted and strategic fashion is the overriding objective of the primary options upon which there was a general degree of consensus amongst the stakeholders. This goal is premised upon the widely-held view that better labour-management relationships reduce the risk, frequency and duration of work stoppages. These improved relationships are also the first step towards achieving greater productivity through more innovative and flexible workplaces. The federal government should initiate a "surge" of new and improved initiatives to radically transform "old-style" labour relations, utilizing modern dispute resolution techniques to meet the challenges of industrial relations in an era of global competitiveness.

Two proposed options are foremost. The first, building on the mature and sophisticated relationships of the stakeholders, foresees the establishment of a joint leadership structure described as the Federal Labour-Management Relations Council. It would bring together not only the labour-management representatives, but also key players of the Labour Program and other industrial relations experts. Its implementation and the resulting cross-fertilization of ideas of participants collaborating in a stable national structure would arguably produce better possibilities for leadership, changes in attitudes, improved communications and the introduction of innovative options for relationship-building and the creation of cooperative workplaces. In addition, the Council, if implemented to its full potential, could: provide a forum for strategic initiatives with the government to improve industrial relations; seek accommodation on issues of productivity and worker security; and consider other measures that are key to the reduction of the incidence and duration of work stoppages, thus improving Canada 's competitiveness.

The second important option which had strong consensus involves the expansion, improvement and marketing of the preventive mediation services of the FMCS. The Labour Program activities would be rebalanced from their present emphasis on mediation and conciliation services during the formal negotiation period at the end of the collective agreement to improving and even dramatically changing the union-management relationship during the totality of the life of the collective agreement. The direction of these efforts moves away from traditional adversarial positions centered on negotiating and enforcing the terms of the collective bargain. Instead, accommodation and resolution of differences become the focus of the agreement, solidifying the relationship of the parties and the mutual reward and fulfillment of their respective needs.

The implementation of this second option foresees the development of a strategic plan for the expansion and promotion of preventive mediation services tailored to the specific needs of each region and different sectors. It also requires the adoption of a proactive culture at the Labour Program to improve and market preventive mediation services, replicating private sector service models to the extent possible. Restructuring and rebranding of the program would assist in providing the government leadership and developing the momentum required to bring about the fundamental cultural change in union-management relationships envisaged by this option.

Other potential options were also considered. A third important option involves processes to resolve workplace grievances which by their extremely adversarial nature represent significant obstacles to improving union-management relationships. This would include best practices to clear grievance backlogs with the aid of FMCS or other mediators. Other options focus on the early resolution of complaints by making mandatory mediation part of the grievance process or imposing preliminary mediation processes as a condition to the right to file grievances.

Grievances involving human rights, which have overwhelmingly become employment rights, raise challenges to options being proposed to resolve grievance disputes. They are considered to significantly erode the value system of collective agreements, introducing more complex and absolutist values into the workplace, and substantially adding to the degree of prescriptiveness in the workplace by acting as constraints on management and union prerogatives. A broad policy discussion and analysis is needed to find better accommodation between individual employment rights and the economic reality that requires less prescriptive workplaces that can compete effectively.

A series of options are reviewed which are intended to make the formal collective bargaining process more efficient and less prone to complications and distractions, thus lowering the risk of work stoppages. These include: changing the open period for decertification of a union in order not to overlap with the formal bargaining period;similarlychanging the timing and requirements of maintenance of activities agreements (intended to prevent work stoppages causing health and safety problems); extending or delaying the formal conciliation period where no meaningful attempt has been made by the parties to negotiate; and promoting recourse to external mediation services (a non-legislative policy measure) where more proactive approaches may be successful, such as in assisting the parties reach final agreement in deadline bargaining situations. Although no consensus was reached on these options, they appear to offer solutions worth exploring in the future should amendments be considered to the Code.

An important option, much of which had the strong backing of the stakeholders, included measures intended to improve the timeliness and quality of decisions by the CIRB. As noted previously, problems involving CIRB procedures were concluded to have been important contributing causes to major work stoppages over the last decade. However, the CIRB Consultation Committee has primary responsibility for these issues and it was recognized that their recommendations should form the basis for options to reduce the risk of work stoppages, subject to comments made with respect to the proposed appointment procedure for Vice-Chairs. In addition, options intended to introduce aggressive case management at the CIRB and to attract recognized private interest arbitrators for appointment as part-time Vice-Chairs, by establishing reasonable remuneration scales comparable to those paid other skilled professionals engaged by the federal government, could be important measures to assist in resolution of many of the performance concerns relating to the CIRB.

Also considered were measures to improve the efficiency of interest arbitrations, including those intended to induce the parties to settle in lieu of the arbitrator rendering a decision to settle the terms of a collective bargain. Voluntary settlement of the terms of a collective agreement is preferred to that imposed by an interest arbitrator's decision, even where the parties agree to arbitrate their dispute. In particular, a promising variant of "med-arb" (employing mediation processes to settle the matter prior to the arbitration) described as "arb-med" was considered in some detail. In "arb-med", a mediation is conducted by the arbitrator after the hearing, but before the decision is released as a means to promote settlement by the parties. Consideration was also given to the advantages and disadvantages of Final Offer Selection (FOS) interest arbitration which was recently featured in legislation ordering an end to a work stoppage. Despite complaints from some stakeholders and interest arbitrators, with some enhancements it appears to offer important advantages to encourage a higher settlement rate and to overcome serious limitations of conventional arbitrations which are inherently conservative due to their tendency towards "split the baby" outcomes.

Another option considered was based on models contained in Alberta and some American legislation. It would allow the Minister to defer the commencement of a work stoppage until after a conciliation-type board had made recommendations for settlement and a mandatory union vote had been conducted on the recommendations. This option, or variants of it, was opposed by the stakeholders.

The preceding options were intended to prevent the occurrence of a work stoppage. It is considerably more difficult to bring a work stoppage to a conclusion, which perhaps explains why so few "neutral" options appear available to limit their duration. Two were considered (apart from that of improving union-management relationships) both involving a temporary return-to-work "cooling off" period: the first, ordered by the Minister on the advice of FMCS in stalemated work stoppages; the second, on the Minister's initiative prior to Parliament ordering back-to-work legislation. The latter option was based on the premise that a legislated end to a work stoppage represents a worst-case scenario for the conduct and reputation of industrial relations. Both options were opposed by the stakeholders, although no other neutral options were brought forward to end work stoppages. In addition, the stakeholders acknowledged that the government must not routinize its options and providing the Minister with a discretion to exercise measures that stakeholders disagree with suggests that they could nevertheless serve some purpose to encourage settlement, even if never exercised.

Several other non-neutral options were considered which were opposed by one side or the other and usually impacted on the power relationship of the parties. The Power is defined for these purposes as the ability of the parties to enforce or resist demands by the other side. Two "employer" options were considered. The first related to a request by several employers that the membership be required to vote on the employer's last offer prior to initiating a strike. The Code already contains provisions giving the Minister discretion to order a vote and, as well, the issue had been recently studied and the idea rejected. There were also concerns that a mandatory vote rule could undermine union-membership relationships which would ultimately increase the risk of a work stoppage. Best practices for communication of information by unions to members were vetted in addition to practices that might improve the ratification process of tentative agreements which was an issue considered under the same option.

Measures from other jurisdictions providing for the termination of work stoppages by the Governor-in-Council or Ministerial declarations of public emergency were examined. These provisions would simply allow the termination of the work stoppage (or to prevent one from commencing) in situations of emergency or undue hardship to third parties with interest arbitration ordered to settle the terms of the collective agreement. The employers did not advance this as a theme, but some did seek limitation on the right to strike in industries which they considered to be crucial to the economic infrastructure, such as ports and aeronautical operations. The only justification for such a measure would be to obviate the need for Parliament to intervene. But it would not appear to have any substantive impact on the voluntary reduction of the incidence or duration of work stoppages.

The labour representatives raised a number of measures that they argued would reduce the frequency and/or duration of work stoppages. The first related to expanded Board-ordered arbitration of first contract collective bargains which were stalemated. These represent a significant percentage of work stoppages (13%), but entailed less than 1% of the total person days not worked for the period examined. The present policy of the Board is not to order first contract arbitration where the parties are unable to negotiate it themselves unless there is bad faith involved on the part of the employer. The resolution of this policy issue appears beyond the mandate of this study. But it is not clear, in any event, whether any reduction in work stoppages over first agreements would not simply be postponed to the next round of collective bargaining as some mediators have suggested.

Far and away the most contentious option was the unions' submissions that legislating a general ban on the use of temporary replacement workers would reduce the incidence and duration of work stoppages. Most stakeholder arguments (economic and social factors), although relevant to the issue, did not relate to managing work stoppages and were beyond the mandate of this study. Empirical evidence was inconclusive on the impact of legislation banning the use of temporary replacement workers on the incidence and duration of work stoppages. Although introducing replacement workers into work stoppages aggravates union-management relationships, recourse to them tends to occur when relationships are already adversarial. Moreover, almost as a "Catch-22", very contentious work stoppages appear to be an important impetus to improving union-management relationships. Most importantly citing other industrial relations experts, it was concluded that the highly contentious and see-saw political nature of this issue was counterproductive to sound labour relations. Instead, emphasis should be placed on improving union-management relations as the optimal measure to reduce the frequency and duration of work stoppages, as well as to limit the use of replacement workers.

The final option examined related to stalemated work stoppages in which the Minister or the CIRB could order a return to work while imposing interest arbitration on the parties to settle the terms of the collective agreement. Consideration was given to recent Manitoba legislation implementing a similar option with respect to work stoppages that had run 60 days or longer. This legislation was vigorously opposed by employers when enacted. Although viewed as a measure which would favour unions, because longer strikes are generally considered to be losses and are problematic for them, the union stakeholders opposed any provision whereby the Minister could terminate a work stoppage and order compulsory arbitration.

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Chapter 5: Overcoming the Challenge to Change Union-Management Relationships

Means to transform the nature of union-management relationships were considered. On those occasions where relationships had improved in the past, they most often followed a mutually painful work stoppage or when the parties shared a common interest facing a crisis over the firm's survival, in both cases usually accompanied by enlightened leadership. The study searches for a shared common interest and recognizes that better relationships standing by themselves without evolution, or as a means to realize other ends, may not achieve the full potential for reducing work stoppages.

Improved relationships will come from the continuing effects of competitiveness and technology that will constantly play havoc with workplaces, abetted by government policy options to make the Federal Private sector more competitive. A deliberate policy strategy to enhance the flexibility of labour markets, work organizations and labour relations on the one hand, and employment and income security on the other, could be the driving force for these initiatives, in line with similar initiatives being played out on the global stage.

Employers need flexibility to compete and this option is preferred by unions over other cost-restraining options such as reducing personnel or reducing wages and benefits. Workplace flexibility and innovation are best achieved through improved relationships that lead to collaborative workplaces. Changed relationships have advantages for unions, including the possibility of better bargaining opportunities and the fulfillment of the promise of greater democratization of the workplace.

Ultimately overcoming these challenges will require real leadership decisions by the stakeholders to commit their members and firms to high integrity industrial relationships. This leadership can be enhanced by options being proposed in this study in combination with a new more proactive culture to "spread the word" at the Labour Program supported by new government investments to achieve these goals.

Modern dispute resolution techniques to overcome past history to negotiate new relationships are also explored. Methods described by Dr. Christopher Moore, an internationally recognized author in the field of negotiation and dispute resolution, are cited. On a more concrete plane, a fairly detailed description of some of the features of a relationship improvement scenario that occurred in Western Canada is also presented. It demonstrates that it is possible to change the fundamental nature of union-management relations using much of the new knowledge and many of the techniques relating to conflict management, even for the most intractable of relationships.

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Chapter 6: Consensus Options

The consultation process used to obtain stakeholder input and consensus on options to manage work stoppages is described. After some initial research, a request was made to stakeholders for written submissions to respond to some of the terms of the study's mandate. This was followed by informal meetings with stakeholders, some industrial relations experts and practitioners, resulting in the preparation and distribution of a discussion paper on 12 "neutral" options. Cross- country consultations followed with several of the stakeholder organizations and a further report, detailing the options on which there appeared to be some degree of consensus, was prepared and distributed. Finally, a roundtable meeting with union and employer representatives was held on July 18, 2008, in Ottawa with about 30 stakeholders attending. It resulted in the adoption of the three consensus options which were finally approved on July 18, 2008.

The process was not without some controversy. Many stakeholders questioned the necessity of a study into work stoppages because of the low numbers of work stoppages and the small contribution to work stoppage numbers by the federal private sector due to its relatively small size. Others were of the view that these matters could not be appropriately addressed within the time frame allotted to conduct the study and compared the process with previous more comprehensive reforms, despite attempts by the author to distinguish between the levels of commitment necessary merely to permit discussions on future options, as opposed to recommendations for legislative change. There was also some disquiet about the political context in which the study was being conducted - a minority government and with matters presently before Parliament on replacement workers. These concerns lead to the development of a general consensus to avoid options that could require legislative amendments to the Code. Despite these reservations, the stakeholders participated fully and generously in the process and provided important information and advice that forms the basis of much of the study.

The three consensus options involve the Federal Labour-Management Relations Council, the expansion of FMCS services, and ameliorations to the process of the CIRB and appointment of members. The options agreed to are considerably briefer than those outlined in Chapter 4. With regard to the Council, the stakeholders wish to review the matter with the FMCS to determine what they view will work best. They wholeheartedly support the expansion, improvement and marketing of FMCS services, including the suggestion that the process be initiated by a national consultation process, again with final details to be worked out in conjunction with the FMCS. Finally, the stakeholders supported initiatives to improve the appointments process and other measures to prevent delays in proceedings, emphasizing that the Client Consultation Committee be strongly endorsed and its recommendations supported.

Given some of the views expressed by the stakeholders at the commencement of the study, the consensus results surpass expectations. Nevertheless, the opportunity and timing appear propitious for the stakeholders to embark upon a course that could significantly change and improve how industrial relations are practised in the federal private sector to their mutual benefit and that of the country. Without more concrete buy-in from the stakeholders on the parameters of the options, and agreement to use this opportunity to aggressively address relationship improvement, the level of investment and commitment to new programs and cultures that underlie the options for the Council and FMCS described in Chapter 4 may be difficult to justify.

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Date Modified:
2012-01-13