Strikes likely in public sector

By Uyen Vu
|Canadian HR Reporter|Last Updated: 02/24/2003

It looks like it will be a rough year for labour relations in the public sector, particularly at the provincial level, according to an annual industrial relations report.

Wages will be the main issue this year, as health workers in Alberta and Manitoba, and provincial bureaucrats in Manitoba, New Brunswick, and Saskatchewan return to the bargaining table. According to the

Industrial Relations Outlook 2003

, a report issued by the Conference Board of Canada, the weeks-long strikes that jostled for headline space last year are likely to make a re-appearance this year.

“In the public sector, they’re still trying to recover from the cutbacks of the 1990s,” said Derrick Hynes, senior research associate at the Conference Board and author of the report.

“If last year was any indication, this year will be another tough year. Provincial governments are still tightening their fiscal belts, and as a result, there’s going to be some discord in the labour-management relationship.”

What’s remarkable, added Hynes, is the divergent paths that labour relations have taken in the private sector and the public sector. In the former, there’s evidence of increasing collaboration, said Hynes.

For example, a collaborative relationship was seen in recent negotiations between paper manufacturer Norske Skog Canada and the Communications, Energy and Paperworkers Union and the Pulp, Paper and Woodworkers of Canada, said the report. In exchange for membership on the pension plan committee and increased pension benefit for their members, the unions agreed to increase the employee contribution to the pension plan.

There were some instances of collaboration in the public sector, Hynes noted, particularly at the federal level. Although the Canadian Union of Postal Workers and Canada Post have had “terrible” relationships in the past, said Hynes, they managed to work together on apprenticeship training, on backlog grievances and on service enhancements that lead to more jobs.

On the whole, public-sector labour relations have gone “from bad to worse,” said industrial relations professor Pradeep Kumar of Queens University. And it isn’t always about money, he added.

“Money might be the immediate reason for conflict that erupts from time to time, but the disease is much more deep-rooted. Management has to sit down with labour to try to find a solution. Management has to recognize you can’t operate without the co-operation of the unions. If contracting or downsizing is necessary, it has to be done in consultation with unions.”

Variable compensation plans will also emerge in public-sector contracts as organizations push for a stronger alignment between performance and pay, according to the report.

“Variable plan, bonus plan, profit sharing and gain sharing — they’re quite common in the non-unionized workplace, but they’re just starting to come into the picture in the unionized setting,” Hynes said.

“There are some unions that are philosophically opposed to the concept; they believe that a person’s pay should be determined at the outset, and there should be no risk involved. But there are examples where the union has met with the employer to negotiate a variable pay plan so that employees receive a bonus on top of their base pay if certain objectives are met within the year, whether they be group objectives or individual objectives.”

However, one private-sector union leader said variable pay schemes are not going to fly with his members. “We do not do variable compensation,” said Buzz Hargrove, head of the Canadian Auto Workers union. “It’s not going to catch on at all. Quite the contrary. People are more and more looking to get their money in their paycheques so they know exactly how much they earn.”

The report also noted that a few unions signed contracts that extend to five or six years. Referring to such long-term contracts, Hargrove said the unions that signed them “have heard back from their members: ‘No more than three years.’

“The dynamics of bargaining are such that nobody can predict what happens in five or six years. You can put together an agreement that covers the dynamics of your relationship for three years, but beyond that will get you into trouble.”

At the Canadian Union of Public Employees (CUPE), research director Jane Stinson said benefits costs are going to cause friction in the year ahead, an observation also made by Hynes in his report. With benefits costs increasing at a faster rate than wages for some employers, said Hynes, many will be proposing containment measures such as spending caps on health-care plans or cost-share agreements.

“Benefit plans, particularly at large organizations, are quite healthy. As a result, when an employer starts saying, ‘We’d like to find a way to control this,’ one could expect that unions would do some pushing back over that,” said Hynes.

Or, there may be some collaboration around the issue, said Andrew Jackson, senior economist at the Canadian Labour Congress. “There really is a shared interest between unionized workers and employers around shoring up public health care. With the delisting of services and restrictions on drug coverage and so on, there has been a shifting of costs onto private benefit plans.

“It is interesting that in bargaining this year, some unions have successfully attempted to get employers to sign joint letters in support of continued adequate funding for health care,” he added. “So around that issue, there’s some scope for joint labour-employer initiative.”

Not for all. CAW’s Hargrove said benefits are not an overbearing burden on Canadian companies.

“There’s a really phony argument out there on health benefits. Because of our socialized health system, Canadian companies have an incredible competitive advantage over companies in the rest of the world, especially over companies in the United States, our biggest trading partner.”

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