A quiet year on labour front

Employers looking for collaboration with unions but provincial public sector might not find it.

Most Canadian unions feel they are holding all the cards in a tight labour market and therefore will be looking to make up for a decade of declining wages, according to a new report from the Conference Board of Canada.

Despite the demands for higher wages, the year will be marked by relative labour stability as employers seek more collaboration with unions rather than confrontation. Of the 179 unionized organizations surveyed for the study, 91 per cent don’t expect to face a strike this year.

With the balance of bargaining power swinging to unions they are apt to be asking for three per cent increases in most cases. Though in some low-wage sectors like hospitality, labour negotiators will likely be looking for more than that. In 2000, unionized workers managed to win an average 2.5 per cent increase, the largest in eight years. In 1999, the average increase was just 1.9 per cent.

In the report, Industrial Relations Outlook, Derrick Hynes writes that, contrary to most other industrialized countries, the influence of unions in Canada is growing.

“We have moved beyond the era of economic restructuring and downsizing …and workers who have not shared in the economic pie will be looking for a big slice,” said Prem Benimadhu, vice-president of the Centre for Management Effectiveness at the Conference Board of Canada.

“Employers are seeking new relationships with unions, built on flexibility and operating effectiveness,” writes Hynes. Employers will be looking to improve operating effectiveness and increase organizational flexibility. In order to be able to react quickly in the global economy, employers need to be able to move swiftly to deploy labour and introduce new training. “The old adversarial relationship will not work under this scenario.”

The forecast is based on a survey of Canadian businesses as well as a special meeting of industrial relations experts hosted by Benimadhu.

Bernard Cormier, vice-president of human resources for Bombardier Aerospace, and a member of the round table explained that investment requires the flexibility to quickly deploy the right people with the right skills in the right environment. For example, a good relationship with labour enabled them to expand production at their Downsview, Ont., plant and attract new investment there.

However, the old suspicions will not quickly disappear. Unions still resent employers’ anti-union tactics and there is a feeling that working co-operatively may be good for the employer but not necessarily the employee.

While the private sector expects calm labour waters, the provincial public sectors may not be as lucky. Larry Brown, of the National Union of Public and General Employees, said “the potential for some very dramatic action exists…unless union’s issues are addressed.”

Aside from wages, unions will be demanding better pensions and benefits. Looking for pension indexing for example.

However, there are signs that unions recognize the evolving nature of work and are willing to make changes accordingly. The rigid restrictions associated with “job security” could be replaced with more flexible approach of “employment security.” Workers won’t expect to keep the same job for their entire career, but they will want a job. In return for longer employment security unions will be willing to make some concessions.

Daniel Gilbert of the United Food and Commercial Workers International Union (UFCW) said that in exchange the assurance employees will still be found work, unions are more willing to accept the trade-off of longer agreements. Several locals within the UFCW recently signed six-year deals, where in the past unions seldom agreed to anything more than a four-year contract, he added.

Variable pay in unionized settings is on the rise with cash bonuses the most common, followed by gainsharing and profit sharing. Of 179 companies surveyed, 36 per cent said they had a variable plan in place, up from 28 per cent in 1999.

Unions continue to balk at the idea of transferring risk from the employer to the employee. Unions also don’t like the inequity inherent in variable compensation systems. Peggy Nash, of the Canadian Auto Workers, points to the Unites States where Ford and Daimler Chrysler employees received a large pay out while GM workers got nothing.

Recruitment and retention continue to be top HR priorities for Canadian employers with more than three-quarters saying they are struggling in this area, up from two-thirds a year ago.

As a result, wages have been going up in many sectors and about 80 per cent of companies have been forced to alter compensation strategies specifically to bring in and hold on to employees.

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