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Tories' Quick Trigger on Labour Disputes Dangerous, Say Experts

Air Canada intervention worries bargaining pros on both sides of table.

By Ben Christopher 17 Nov 2011 | TheTyee.ca

Ben Christopher writes about labour and other issues for The Tyee.

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Strike's take-off aborted: CUPE members protest Air Canada during labour dispute.

Holiday travelers, rejoice -- there will not be a strike at Air Canada this season. Instead, thanks to a bit of legal jujitsu from the Harper government that blocked the union from walking off the job last month, the long-standing dispute between the airline's management and its aggrieved flight attendants was brought to a decisive end last Monday, with both sides settling on a contract.

Having nixed the possibility of a protracted strike, the government's intercession is likely to win the support of a public happy to have the whole mess cleared up before Christmas. But many experts warn the Air Canada affair marks an unprecedented and potentially dangerous overreach into a proven process of collective bargaining.

By nipping strikes and lockouts in the bud for the sake of the economic stability, they argue, the government threatens to unbalance a system of conflict resolution that has long served not only the interests of organized labour, but those of Canadian business as well.

An unusual choice

The dispute between Air Canada and CUPE, the union representing the flight attendants, began to get truly weird in the middle of last month. On Oct. 12, after the union membership voted down a deal cut between its leadership and the airline's corporate management for the second time, Minister of Labour Lisa Raitt formerly requested that the Canada Industrial Relations Board look into the issue.

It was an unusual choice. The CIRB is the quasi-judicial agency typically tasked with investigating alleged violations of Canadian labour law by federally regulated corporations and unions. But here, no obvious violation had been made. Instead, the minister made two distinct referrals to the CIRB, requesting why this labour dispute should be given special attention.

As long as the CIRB was looking into the two referrals, Raitt argued, CUPE was effectively barred from striking. While some have disputed the legal validity of this argument, it was enough to force the parties towards a quick resolution. Presuming that the government would not allow the dispute to end in a strike, the union leadership saw itself stripped of bargaining power.

Two weeks later CUPE and Air Canada agreed to settle ahead of the CIRB ruling through interest arbitration -- a process whereby a Solomonic third-party cuts a deal which both sides are then compelled to accept.

Last Monday, a deal was reached; Elizabeth MacPherson, the current chairperson of the CIRB, imposed upon the parties a contract previously rejected by the union.

'Monkeying around'

"This is what happens when amateurs monkey around with the system," said Dan Oldfield, senior staff representative of the Canadian Media Guild. "It's devastating, obviously."

Oldfield, who has fought on the union side of various labour disputes for three decades, spoke to The Tyee in late October, a week after CUPE and Air Canada agreed to settle through arbitration.

According to Oldfield, neither of the minister's referrals were appropriate or applicable in the case of the Air Canada and CUPE dispute. In her first referral, Raitt invoked section 87.4 (5) of the labour code, essentially making the argument that because some communities might rely on Air Canada service for emergency travel, a flight attendant strike at the airline could pose a threat to public health or safety. That is, that Air Canada flight attendants might constitute an "essential service."

Under the Canada labour code, "essential services" are prohibited from striking, said Oldfield. Paramedics, for example, cannot simply walk off the job en masse, but must have their grievances addressed through an arbitration process while they continue to carry on their duties. At most, the law may allow for a partial strike or a partial lockout, in which only the most basic and necessary services are provided.

But flight attendants at Air Canada do not fall into this rarefied category, says Oldfield.

"There's not a serious individual involved in industrial relations, either on the management or the union side, that would suggest that Air Canada falls into essential services," he says. "We're talking about flight attendants. The only issue of public concern would be who was going to fill the glasses of wine. And it's not like you can't travel even if Air Canada isn't flying. There are numerous options."

Industrial peace

As part of her second referral, Minister Raitt made a much broader argument. Raitt pointed to the fact that the flight attendants had twice voted down agreements reached between CUPE leadership and Air Canada management. According to the minister, this represented a breakdown of the collective bargaining process. Invoking her authority to "maintain or secure industrial peace" under section 107 of the labour code, Raitt’s position was that the parties had reached such an impasse the ministry must act on behalf of the economy.

"If you're going to affect the national economy and there's a significant public interest then the government will come in as that third party," said Raitt, explaining her decision during a CBC interview on Oct. 21. "We have demonstrated that in the case of the postal workers and in the case of Air Canada."

But according to Oldfield, a breakdown in negotiations does not warrant an intervention. In fact, he argues, if the government intervenes, assuring both sides that a strike will not take place, both labour and management have less of incentive to put any meaningful concessions on the table.

"What the workers can ultimately do is withdraw their labour and what the employer can do is lock them out," Oldfield explained. "There's a tension between the two parties -- you either get a deal or you don't get a deal and whatever decision you make, you live with it. But in this case, the government stepped in and offered a third option. So the workers are out there saying, ''Why should we take a deal we don't want? Screw it, we'll take our chances with a third party.'"

As Oldfield sees it, a key reason collective bargaining works is that both sides can threaten one another with mutually assured economic destruction. It is a messy process, he said but it's one that reliably produces sustainable resolutions.

Common knowledge

It's an opinion shared by Warren Edmondson. Edmonson should know. The former chairperson of the CIRB between 2004-2008 and, before that, the assistant deputy minister of labour starting in 1995, he is one of Canada's preeminent experts of industrial relations at the federal level.

According to Edmondson, it is a widely known among union and business representatives alike that the specter of binding arbitration only discourages negotiation on both sides. Worse yet, he warns, if the Ministry of Labour makes a habit of interceding to stop strikes through acts of parliament and referrals to the CIRB, unions may begin to question the neutrality of both federal mediators and board officials.

If either labour or business interests favored binding arbitration over collective bargaining as a means of resolving labour disputes, he says, either of those groups would have lobbied for such a change. The Canada Labour Code has undergone multiple revisions and modifications since its inception in 1985, he says. And before each overhaul, business and labour representatives were consulted. A move away from collective bargaining and towards arbitration was never suggested, he explained to The Tyee.

Instead of serving the interests of either business or labour, Edmondson speculated that the unprecedented intervention of the Labour Ministry into the airline industry serves a political purpose. Having averted a potentially prolonged and inconvenient strike, he said, the public is likely to reward the government in the short-term.

Oldfield also perceives a political motive behind the government's intervention.

"I think the government thinks it's representing the interests of big business," he says. "But whatever our disagreements are, most people who are dependent on the system -- and that's management and union -- need to be very concerned about this meddling. There are lots of people who come from the business side who will say exactly what I'm saying."

From the business side

George C.B. Smith is one of those people. Now a professor of industrial relations at Queens University, Smith is a former vice president at CBC/Radio-Canada, a former vice president at CP Rail, and the former senior director of employee relations at, of all places, Air Canada. In his 40 years of experience, he has helped management negotiate his fair share of strikes -- including a few at the airline.

Smith is appalled by the government's recent approach to resolving labour disputes.

"This is a gross perversion of the system," said Smith. "I don't think there has been any public policy debate about whether the CIRB should play a more substantive role relative to collective bargaining."

During the recent negotiations between CUPE and Air Canada -- but also during both the Canada Post lockout and the Air Canada ticket agent strike earlier this summer -- the Minister of Labour has taken an active and early interest in intervening for the sake of economic security, says Smith. While Smith does not dispute this strategy on legal terms, he says that this government has pursued a uniquely aggressive strategy of making threats, writing referrals, and tabling legislation to quash nascent work stoppages.

"Historically, this kind of intervention has only happened after a protracted strike or a lockout when there's been clear evidence that there has been economic harm," says Smith. "In this case, the strike didn't even happen so there wasn't the evidence of economic harm. In fact, WestJet, Porter, and other airlines had indicated that they would be taking up the slack."

The fact that Air Canada does not monopolize air travel in Canada, says Smith, is yet another reason to dismiss its characterization as an essential service.

"I can only imagine how West Jet and Porter are feeling right now."

'The dirty little secret'

Smith says that he has been surprised by the muted reaction from the business community. Echoing both Oldfield and Edmonson, he says that Canada's highly regulated collective bargaining process is the best forum to hash out grievances. Accordingly, criticizing the government's strategy as so much predictable union bashing misses half the story.

"Harper has put a very nice spin on all of this, as though the government was teaching the unions a lesson," says Smith. "In fact, that's very short-term thinking. Yes, it may restrict the union's right to strike in the short-term, but it also restricts business' right to compete in the long-term."

Smith says that in both the cases of Air Canada and Canada Post, management was willing to take a strike or impose a lockout. Management will only do this if the concessions they are trying to extract from their workers are worth the work-stoppage, he argues.

"If Air Canada doesn't get changes to that pension plan, they're going to go bankrupt again. If Canada Post doesn't get the change it needs to increase the efficiency of its operation, you and I as taxpayers are going to pay for that," says Smith.

While Smith believes that the recent arbitration ruling of Elizabeth MacPherson in favour of Air Canada was a "fair one," he says that as a general rule, management is unlikely to win those kinds of far-reaching but necessary concessions from an arbitrator.

"Underlying this all is the dirty little secret that everyone in the industry knows: arbitrators rely on business from both sides," Smith says. Because warring unions and companies must agree upon an arbitrator together, he explains, there is a strong incentive for the third-party not to stray too far from the middle of the road.

"So in a certain sense, the system is biased towards the status quo and against any kind of radical change in the collective agreement," says Smith. "This is the reason that most private-sector companies and unions do not resort to binding arbitration as the outcome."

'Brave new world'

"We've entered a brave new world here," says George Smith. Given the unprecedented nature of the current government's labour policy, he says he's hesitant to make any predictions of where all this is leading.

According to Lisa Raitt, the Ministry of Labour has and will continue to evaluate each national labour dispute on an ad hoc basis. Whether the government will choose to intervene, she explained on the CBC, depends on how dramatic an impact a strike or lockout will have on the Canadian economy.

But the Harper government having so far applied "new and creative interpretations" of the labour code to ordinary private disputes, Smith said he worries what the long-run consequences on labour relations will be.

In the short term, Dan Oldfield predicted that the settlements imposed upon the flight attendants, the ticket agents, and the Canada Postal workers will prove unsustainable. Deprived of the opportunity to fight over their respective interests, he said, employees and employers will return to a poisonous workplace environment with their grievances unaddressed.

"Does anyone for a minute think that the issues between Air Canada and its employees are resolved?" said Oldfield. "Does anyone think for a minute that the issues between Canada Post and its workers are resolved? They only get resolved through collective bargaining. They don't get resolved through imposition."

But on a larger scale, Oldfield worries that imposition will become the new standard operating procedure for the government. And once both management and unions come to expect that interference, he says, the institution collective bargaining will cease to function entirely among federally regulated industries.

"If this is a precedent, it's an extremely dangerous precedent," he said. "We have a system that's regulated, that the parties have by and large agreed to, and that in a significant majority of cases delivers. You want to throw that out? You want to go back to the law of West?"  [Tyee]

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