Ch. 10: Labour Relations

Learning outcomes

After this chapter you should be able to: discuss the history of labour unions; explain why union membership declined over the past four decades; explain the unionization process and the laws around it; describe collective bargaining; explain the types of bargaining issues and management rights; discuss how to manage the grievance process; and explain the role of HR when working with unions.

10.1 Definition and history of unions

A union has a legal obligation towards the employees it covers. It must:

1. represent them,
2. negotiate on their behalf with management, and
3. monitor the collective agreement.

Canada's unionization rate is roughly 32% (31.3% in 2020 according to Statistics Canada), more than twice the rate in the United States (about 14%).

History of unions in Canada

Labour Day was established to recognize the contribution of ordinary working people to Canadian life: the right to fair wages, safe working conditions, injury compensation and equitable labour relations. Many people lost their lives to win the right to refuse unsafe work and to be treated fairly and without discrimination.

• Europe: trade unions developed during the Industrial Revolution. Workers had little skill, so all power shifted to the employer, and many workers were mistreated and underpaid.
• United States: unions grew as the railroads were built in the late 1860s. Pay was low, injury and death were common and safety laws were scarce. To defend workers' rights, the Brotherhood of Locomotive Engineers was founded along with other brotherhoods, each covering a single task such as brakemen or conductors. In Canada, the Brotherhood of Sleeping Car Porters started collective bargaining in 1945 to get better working conditions.

Timeline for Canada:

Example: Walmart and unions

Walmart has a reputation for fiercely opposing unions. In 2005 one of its vice presidents stepped down after admitting that big amounts had been spent on undisclosed purposes; it emerged that the money had gone into keeping the United Food and Commercial Workers union (UFCW) out. Further union-busting accusations: shutting stores once unionization came up (a Tire and Lube Express in Gatineau, Quebec), requiring store managers to pass union rumours on to headquarters (which then takes over labour decisions), and scrapping every US meat-cutting department after the butchers of a single store voted for a union. These accusations gave rise to OUR Walmart (Organization United for Respect), funded by the UFCW, which Walmart regards as a "Trojan horse" paving the way for full unionization.

10.2 Reasons for unionization

People may feel that management does not meet their economic needs. There is no single reason; joining can be a personal choice, although some people feel coerced by colleagues, the union or peer pressure. Employees join to be represented by a large entity in order to obtain:

• higher wages and benefits,
• a seniority list,
• job security,
• a mechanism for grievances against management.

There is a difference between the desire to be represented and the opportunity to join. When deciding, employees consider:

1. their satisfaction or dissatisfaction with the employer and/or job;
2. personal attitudes towards unions, shaped by media, colleagues, past experience and upbringing ("for" or "against");
3. their belief about what a union can "do" to improve working conditions.

Reasons why employees may not want to join:

• a poor former experience with unions;
• the feeling that the employer already treats them fairly and equally;
• seeing the union as just another layer of "management" or authority;
• fear of repercussions from management, for example when hoping to be promoted into management;
• not wanting to strike and lose pay, or to pay union dues.

Canadian union stability

Unions affect wages and wage increases, pensions, how companies hire and how many people they employ; during the pandemic they negotiated working from home. Over 40 years the economy shifted from manufacturing to services and technology changed work. This shift is the main reason unionization dropped.

Among both men and women, union membership dropped in the commercial sector and held steady in the non-commercial sector. Some groups did not decline: membership among women increased. More women are working than in past decades, women have entered better-paid jobs that men used to dominate, and many women work part time because they are the main caregivers, while part-timers more and more turn to unions for better conditions.

10.3 Union objectives and structures: business versus social unionism

Unions change the workplace, the relationship between management and employees, and the role of HR. They do not change how profits are made or how policies and procedures are implemented.

HR is affected by both types: many policies and procedures were changed because of union influence, and non-unionized employees have also benefited from unionism.

Structures of unions

Like big corporations, unions are built as a pyramidal structure. The base consists of locals serving workers in a given area; some members act as stewards, who mediate when workers and supervisors clash. Locals are grouped into national or regional unions, which support local negotiations, set up new locals and lobby the government. Those unions can again be joined in a labour federation, the chief political body of organized labour.

10.4 Legislation and unions

Individually, employees have little power against management; organized as a group they can leverage power to negotiate. Unions call this a collective voice.

Jurisdiction: airlines, railways, banks and federal agencies fall under federal regulation, and every other company under provincial rules. Unions object to the government stepping into bargaining (such as back-to-work laws at the Post Office, Air Canada and the railways), saying this turns workers into political pawns. Because federal and provincial rules differ, national employers with offices throughout Canada face extra complexity.

Core elements of labour law

• Right to join a union: all employees may join and participate in a union.
• Bargain in good faith: a reasonable effort to reach a collective agreement by meeting and exchanging sincere proposals.
• No strikes or lockouts during the term of the collective agreement (illegal for both sides).
• No unfair labour practices by union or employer, for example no coercing of employer or employees in exercising their rights (the book also lists false advertising, deceptive pricing and non-compliance with set standards).
• Conciliation: union and employer must go through conciliation before a strike or lockout.

Legislation and unionization

Forming a union and keeping it are tightly regulated, and the rules vary by jurisdiction. Collective bargaining is rooted in the labour codes and labour relations acts of the federal government and the provinces, which give workers the right to join trade unions that may be certified to bargain on their behalf. In the federal public service, bargaining and grievance adjudication fall under the Federal Public Service Labour Relations Act (PSLRA). Provincial examples are the Labour Relations Code (British Columbia), the Labour Act (Prince Edward Island) and the Quebec Labour Code. Quebec has North America's most union-friendly laws as well as its highest unionization rate.

Labour Relations Boards (LRBs)

Labour Relations Boards at federal and provincial level apply the legislation and look into violations by either union or management. They rule on whether someone is an employee (or employed by a trade union), whether a union is a suitable bargaining agent, whether a collective agreement is in effect and whether a party is bound by it. They draw on expert advice, and their rulings are final and binding. If a complaint is filed, HR supports the company lawyer in building the case, for example with job descriptions, payroll records or performance appraisals.

10.5 Organizing unions and collective bargaining

Organizing the union

Unions exist only when employees want them. Interested employees start an organizing drive and try to convince colleagues of the benefits. Union activity may not be discussed during working hours. Employees ask colleagues to sign an authorization card, which authorizes the union to certify the group as a union. Other methods: after-hours meetings, handing out materials, one-to-one conversations, home visits and social media.

The unionization process (Figure 10.5.1):

1. Union and employees make contact because of dissatisfaction.
2. Initial organization meeting to gather support.
3. Formation of an organizing committee: local leadership campaigns for signatures of a majority of workers.
4. Application to the Labour Relations Board once a majority has signed.
5. Certificate issued by the Board after checking the process and signatures.
6. Election of the bargaining committee and contract negotiation.

What management may and may not do

Interfering with organizing is illegal, although employers may resist because a union can raise costs. HR should know the legal limits.

After certification of the union by the Board, the employer is left with one option: negotiate a contract. Example: in 2004 the Walmart in Jonquière (Quebec) was the first Walmart in North America to unionize, and a few months later it was shut down (some 190 jobs lost). The Supreme Court of Canada found that Walmart had not shown financial hardship and had breached the Quebec labour code by altering employment conditions without consent during negotiations on the agreement.

Three ways to be recognized as a union

1. Voluntary recognition: both the employer and most employees are convinced that nobody was pressured, and the employer recognizes the union as the legal bargaining agent.
2. Regular certification: a substantial number of employees (set by provincial law) sign cards, or a majority of ballots in an election favours the union.
3. Prehearing vote: when the employer is accused of unfair labour practices to prevent unionization, the Labour Relations Board holds a pre-hearing vote.

The process of collective bargaining

Each side opens with its position and demands; these are starting points and the result usually lands in between. A tentative agreement is voted on by members. If accepted, the contract governs labour relations for a stated period; if rejected, the negotiators return to the table. Both parties must bargain in good faith: actively participate and show a desire to find a basis for agreement.

Examples of bargaining topics: pay levels and pay structure; health benefits and plans; incentive schemes; job classification; how performance is assessed; vacation and sick leave; layoff procedures; how much seniority counts in personnel decisions; training; severance pay; and the tools employees receive.

Five steps of collective bargaining (Figure 10.5.3)

1. Preparation: a team with knowledge of the organization and negotiation skills; understand working conditions and dissatisfaction; set objectives; review the old contract; management anticipates union demands. An important issue is management rights: the company's freedom to operate, such as reassigning employees, making independent hiring decisions and other management matters.
2. Timelines and ground rules: frequency of meetings and order of topics (for example compensation, often the most contentious, first or last).
3. Initial proposals face to face, often 60 to 90 days before the current contract expires; opening statements and options, with a "let's make this work" attitude. Each side then decides what it can and cannot honour. Follow-up meetings cover wages, working conditions, hours, vacations, sick time, pensions and benefits. Easy issues go first; negotiations are always private.
4. Series of meetings, sometimes hundreds, with compromises and counterproposals. If a party does not bargain in good faith, the union can file an unfair practice charge. Some employers move from adversarial bargaining to mutual gains bargaining.
5. Ratification: the agreement is reviewed by top management and voted on by members. If both approve, it replaces the old agreement (or becomes the first one). If either side rejects it, bargaining resumes. Administration starts when both sides have signed.

Bargaining impasse and pressure tactics

A bargaining impasse occurs when the parties cannot reach consensus, which is common because their interests differ (example: federal prison chaplains represented by the United Steelworkers whose first agreement stalled). Pressure tactics are legal within limits and must be used carefully because they can backfire: negotiations are like a chess match.

Working with labour unions

HR professionals and managers must know the collective agreement intimately: it is the guiding document for all employee decisions and usually sets out how discipline, promotion and transfers work. A positive relationship with the union makes daily operations and future bargaining easier; ways to build it are asking the union for input before decisions and communicating transparently.

10.6 Administration of the collective bargaining agreement

Procedures for grievances

Each contract specifies how a grievance starts, its steps and who hears it. HR is involved in most steps because it knows the contract well. Sample grievance process (Figure 10.6.1):

1. Informal conversation between manager, employee and possibly a union rep. Many grievances end here because they stem from misunderstandings.
2. Written grievance filed by the union; HR and management discuss it with a union rep.
3. Union grievance committee (informal meeting or formal hearing).
4. Formal management response: remedy the grievance or explain why the contract was not violated; the process then escalates.
5. National union officer works with management to resolve it.
6. Mediator: impartial third party who tries to resolve the issue; the recommendation is not binding.
7. Arbitrator: impartial third party chosen by both sides who makes a binding decision. Arbitration is the final step.

Examples of grievances: someone was promoted over a more senior colleague; an employee lacks the tools promised in the contract; a termination violated the contract; an employee was improperly trained on chemical handling.

Collective agreement provisions

Seniority: unions want decisions based on length of service, so longer-serving employees face no favouritism in overtime, layoffs and promotions.

Union security:

Disciplinary practices: the agreement includes a clause on discipline or discharge for just cause. The employee's conduct must be so serious that continued employment is no longer compatible, and the sanction (termination) must be proportional to the misconduct. Three questions:

1. What is the nature and context of the misconduct?
2. What were the circumstances surrounding it?
3. Is dismissal an appropriate response?

10.7 The future of unions

Challenges: falling membership, globalization and employers' focus on staying non-union. Membership in Canada has declined steadily since the 1950s, even more steeply in the US. Explanations:

• Cultural: North American workers prefer individualism over collectivism (Fischer).
• Globalization: unionized manufacturing jobs moved overseas.
• Management: unwillingness to work with unions.
• Unions themselves: past corruption, negative publicity and hard-line tactics.

Union membership is falling worldwide but is still high in some countries: in 2013 over two thirds of workers in Denmark, Sweden and Finland belonged to a union, while in France and Austria only a minority are members but 98% fall under collective agreements. Globalization erodes both union membership and union values; free trade agreements like CUSMA make it easier to produce abroad, and unions have achieved little in calling for more government control while trying to keep jobs in Canada.

Companies avoid unions mainly because of higher costs and less management control. To stay union-free they offer higher wages and benefits and constantly monitor retention strategies and policies.

10.8 Human resources in union workplaces

Union reps represent the union and HR represents the company, but they are not necessarily in conflict: both seek the best outcome for the people they represent.

• Bargaining: HR bridges the gap, can steer confrontational talks towards mutual-interest bargaining, offers conflict resolution and problem-solving training, and shows how each side's success depends on the other (for example work-life balance raises productivity, good health benefits lower absenteeism).
• Grievances: HR trains stewards and supervisors to prevent grievances and helps find solutions that meet both sides' needs.
• Communication: HR facilitates cooperation, ensures good communication during conflict and can organize regular union-management meetings.
• Common goals: HR helps both sides find shared goals, which leads to cooperation.

Key terms

Authorization card, bargaining impasse, boycotting, business unionism, collective bargaining, grievance (individual, group, principle, union/policy), labour union, lockout, locals, management rights, mediator, mutual gains bargaining, picketing, Rand Formula, replacement workers, social (reform) unionism, stewards, strike. All are explained in the sections above.

Summary

Unions have a long history in Canada, and workers join them for better wages and benefits, job security and seniority lists. Business and social unionism both shape HR policy, and non-union workers benefit as well. Union structures range from the local to parent, national and international unions and central labour organizations. Federal and provincial laws set the framework and Labour Relations Boards enforce it. Workers go through several steps to organize; once certified, the union negotiates a contract with management in good faith, and both parties then monitor it. Grievances are the formal route when the contract is (thought to be) violated. HR is involved in bargaining, grievances, communication and finding common goals. Unions face falling membership (cultural individualism, globalization and outsourcing, management resistance, negative image), while European countries keep higher coverage. Companies resist unions because of higher costs and less control, and try to stay union-free with higher wages, benefits and constantly monitored retention policies.