The poor economy in 2009 will likely lead to relative labour peace in Canada, according to a report from the Conference Board of Canada.
The sharp economic downturn means both labour and management will go to the bargaining table this year in a weakened state, stated the report Industrial Relations Outlook: Managing Expectations in Uncertain Times. Firms are powerless as markets for their goods and services disintegrate, profits decline and credit is hard to come by, making them especially vulnerable in a work stoppage. Labour is also powerless to lobby for pay increases when employers’ very survival is uncertain.
In past recessions, power shifted to employers and labour paid the price, perhaps accounting for the increase in labour stoppages during those times. However, this recession is different, said Prem Benimadhu, vice-president of governance and HR management research at the Conference Board in Ottawa.
The downturn has affected all parts of the economy right around the world. Consumer debt is higher than ever before while consumer confidence is low. Housing prices have taken a beating and the credit crisis has made banks less likely to lend money.
“We have a liquidity problem that we never faced before in previous recessions,” said Benimadhu. “We’ve never faced an environment where every economic factor is down.”
Employers, in both the private and public sectors, know their survival is on the line and no one knows how this recession will play out, he said.
“In this kind of uncertainty, you don’t want to promise the moon to your employees,” he said. Employers will probably ask for concessions to claw back some of the gains made when times were good. Wage rollbacks and benefits decreases, including a switch from defined benefit to defined contribution pensions, will be among management’s demands, said Benimadhu.
And labour knows what’s going on, he said. Labour leaders don’t want to be militant and demand things that will jeopardize the survival of the company, he said. While labour will focus on job security, it won’t completely abandon the issue of wage increases.
“These days, in the minds of all employees, job security is far more important than any raise,” said Benimadhu. “The likelihood of getting another job in this kind of environment is pretty tough. So raises become secondary.”
The latest update from the Conference Board found projected wage settlements for unionized workers declined from 3.2 per cent when employers were surveyed in the summer to 2.7 per cent in December. Projected increases in the private sector dropped from 3.1 per cent to 2.9 per cent and in the public sector they dropped from 3.5 per cent to 2.6 per cent.
The one exception will be in sectors where labour is scarce, said Benimadhu, such as nursing, where the Canadian Nurses Association is projecting a shortfall of 113,000 registered nurses by 2016.
Two lengthy strikes show determination of workers
Despite the writing on the wall about the recession, there were well-publicized and protracted strikes at York University in Toronto and OC Transpo, Ottawa’s transit system, at the end of 2008.
Contract professors, teaching assistants and graduate assistants at York University were on strike for 85 days until the Ontario government legislated them back to work in January. Drivers and mechanics at OC Transpo were on strike for 53 days, only heading back to work when both sides agreed to enter binding arbitration to avoid federal back-to-work legislation.
The fact these workers were on strike so long and only legislation, or the threat of it, made them go back to work, “shows me they weren’t as cowed as the Conference Board of Canada seems to think workers will be,” said Judy Haiven, associate professor in the management department at St. Mary’s University in Halifax.
A recession doesn’t give employers the right to run roughshod over workers and it doesn’t take away the right of workers to demand fair compensation, said Haiven.
“If people are working, they should be paid fairly for their work,” she said.
If management wants unionized workers to concede on wages, then the salary cuts should start at the top with CEOs who earn hundreds of thousands, if not millions, of dollars, she said.
“How can we say that workers aren’t entitled to bargain hard over issues such as wages, when we see this complete discrepancy?” said Haiven.
Major work stoppages 2008
Work stoppages involving 500 or more employees
from Jan. 1 to Dec. 31, 2008
OC Transpo (Ottawa)
Dec. 10, 2008, to Jan. 31, 2009
2,300 bus drivers, dispatchers and maintenance employees
Canada Post (countrywide)
Nov. 16, 2008, to Dec. 23, 2008
2,100 technical, administrative and support employees
York University (Toronto)
Nov. 6, 2008, to Jan. 29, 2009
3,350 professors and teaching assistants
Université Laval (Laval, Que.)
Oct. 20, 2008, to Oct. 20, 2008
Winnipeg Free Press (Winnipeg)
Oct. 13, 2008, to Oct. 29, 2008
600 inside employees and carriers
Xstrata Copper (Timmins, Ont.)
Oct. 1, 2008, to Nov. 6, 2008
650 mining employees
University of Windsor
Sep. 18, 2008, to Oct. 4, 2008
1,000 professors and librarians
Fairmont Queen Elizabeth Hotel (Montreal)
Aug. 5, 2008, to Aug. 6, 2008,
Aug. 28, 2008, to Nov. 13, 2008
600 hotel employees
Potash Corporation of Saskatchewan (Patience Lake, Allan and Cory, Sask.) Aug. 7, 2008, to Nov. 17, 2008
500 mining employees
Calgary Board of Education (Calgary)
June 3, 2008, to June 4, 2008,
June 10, 2008, to June 11, 2008
3,535 office and support employees
OLG Brantford Casino
June 1, 2008, to Aug. 2, 2008
675 casino employees
Toronto Transit Commission (Toronto)
April 26, 2008, to April 27, 2008
9,000 bus drivers, service and maintenance employees
McGill University (Montreal)Government of New Brunswick (provincewide)
April 8, 2008, to June 23, 2008
1,600 teaching assistants
Jan. 10, 2008, to Feb. 18, 2008
550 correctional officers, community college custodians, and human resource counsellors