Employer stands to gain financially via payroll, benefit cost savings
Employees at Halifax Water have been on strike since May 19 and show no sign of stepping off the picket line.
The utility’s inside and outside workers — represented by the Canadian Union of Public Employees (CUPE) Locals 1431 and 227 — maintain the city’s water, storm water and waste water facilities.
But the picket line hasn’t exactly applied pressure on Halifax Water. Its operations are being maintained by non-union and management employees with assistance from contract workers.
In fact, the strike is actually saving the regional municipality money, according to James Campbell, communications and public relations co-ordinator at Halifax Water.
"We’re not paying approximately two-thirds of our employees," he said. "There are cost-savings through payroll and benefits, for sure."
Finding a balance
But reaching an agreement that is acceptable to both parties is far more important than any immediate potential gains, according to John Hyde, partner at Toronto’s Levitt & Grosman.
"If, as an employer, you’re saving money by virtue of (labour action), is it a long-term solution? No, it’s not a long-term solution because there’s no certainty. Employers, particularly in the public sector, prefer to have the certainty of a longer-term agreement. We don’t know where things are going to go."
No employer wants to enter negotiations in a weak position, he said, but an imbalance of power does not necessarily lead to a more favourable agreement.
Labour action — be it a strike or lockout — is a powerful tool during the negotiating process. If that tool becomes ineffectual, it could lead to an imbalance of power in the bargaining process that creates more problems than it solves, said Hyde.
"A balance of power is critical to get a good deal and a fair deal. And that’s what it’s really about, in the end, getting that fair deal that everyone can live with," he said.
"It’s absolutely essential to have a strong balance of power there and I think that without that, you don’t get the kind of deals that the parties can live with over the long term."
A deal without balance leads to the same problems cropping up year after year, in collective agreement after collective agreement, said Hyde.
"We don’t know what kind of labour unrest is going to be created over the long-term. There’s always going to be a risk that you will make initial gains and those gains will come back to haunt you later on," he said. "There are plenty of cases where the employer has got an exceptional deal but three years down the road when you get back to square one, it can be a challenge."
The bottom line is a bitter strike does no good for either party, said Hyde.
"That bitterness lingers after."
But strike-related savings are not the objective, said Campbell, and Halifax Water hopes to work with CUPE to redefine the pension plan and get employees back to their regular schedules.
Talks broke off in April
Contract talks between the parties broke off in April and both sides remain at a standstill concerning issues of wages, premiums, overtime, seniority and the employees' indexed defined benefit pension plan. In addition to CUPE members, the pension plan covers non-union and management employees.
"In a nutshell, the pension plan is not sustainable in its current form," said Campbell.
"We’re looking at redesigning the pension plan that will hopefully still remain an indexed defined benefit pension plan, but in a form that’s more supportable by our customers."
The employer’s latest offer for the pension plan included an annual accrual rate of 1.75 per cent per year of service (down from the current two per cent) based on the average salary over the best seven years (up from the current best five years).
The offer also included guaranteed annual indexing of up to one per cent, down from the current two per cent.
The proposed agreement — a five-year deal — also included wage increases of 1.5 per cent for the first three years and 2.25 per cent for the final two years.
However, the union said the employer is asking for too much.
"We went to work looking at what they were saying, that it’s an unsustainable pension," said Heather Corkum, president of CUPE Local 1431.
"We don’t believe it’s unsustainable."
The union did concede changes need to be made moving forward. It made major concessions, agreeing to cut the indexation and increase the number of years used to calculate employee’s average salary, she said.
In exchange, CUPE requested any future surplus be used to top up those pension benefits being sacrificed.
The request was denied, she said, and the labour action was launched when it became clear the parties were no closer to coming to an agreement for the pension plan.
"Halifax Water needs to get a more realistic mandate," Corkum said. "We have been bargaining with ourselves for 15 months. We need Halifax Water to come to the bargaining table and start bargaining with us."
