Expense of bargaining, changing economy, precarious work cited as factors
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Over the last few years, the length of collective agreements being negotiated has often extended beyond the typical two years to three, four or five — for a variety of reasons. And there are both positives and negatives to this approach, say experts. |
“From the company’s perspective, a longer-term agreement creates labour relations certainty: You don’t have to concern yourself with bargaining and possible work disruption for a longer period of time, which makes it a lot easier to operate,” says Will Cascadden, a partner at McCarthy Tétrault in Calgary.
In a lot of these negotiations, both sides are usually left discussing “incremental improvements” because the fight over what they have negotiated in the past, especially with pensions changing from defined benefit to defined contribution plans, is over, says Aaron Ekman, secretary treasurer at the BC Federation of Labour in Vancouver.
“It’s a reflection of collective agreements being more mature and full of fewer surprises, and the processes to enforce those agreements and negotiate disputes in the terms of the agreements are well-established, and so unions might be becoming a little bit more comfortable with longer terms of — as the employer terms it — labour peace.”
Union versus management
The length of term is contingent on many factors, according to Derek Johnstone, special assistant to the national president at the United Food and Commercial Workers Union (UFCW) in Toronto.
“Every negotiation is its own animal, so it really depends on the employer and it depends on the bargaining unit, i.e., the group of workers there. If you’ve got an older group of workers, you might find they are a little more inclined to look upon a longer deal favourably because they may want to secure the next five, six years of their lives for a number of reasons,” he says.
“And if they are not in that position, they may be looking for something a little shorter.”
Traditionally, unions have asked for briefer lengths because it has worked to their advantage, says Ekman.
“In most cases unions will go to a bargaining table with an intention to start out with as short a term as possible. It’s not a secret bargaining tack of unions to try to put the employer in the position where they are essentially buying more years,” he says.
“A union will generally start off with a term of two to three years to the employer and it’s up to the employer to try to negotiate additional years. It certainly wasn’t a primary factor in determining the term of the agreement because that’s a negotiation piece with the employer.”
Management has generally been the driving force behind pushing for longer deals, according to Johnstone.
“My experience, more often than not, is a longer deal is generally initiated by the employer.”
But the length of a new deal is not usually placed on the front burner, he says.
“Quite frankly, it’s usually one of the last ones decided upon by the parties. It’s usually one of the last things you sign off on.”
Cost considerations
The expense associated with negotiations may be a contributing factor behind the longer agreements, according to Collective Bargaining Trends in Canada, 1984-2014 by Employment and Social Development Canada. The report found the length of collective agreements has doubled since 1984, with the average duration of contracts being 19.6 months in 1984, and 40 months in 2014.
In the case of unions, they have to uproot bargaining committee members from the workplace, travel and boarding has to be paid for, and the hiring of lawyers and consultants also comes into play, says Ekman.
“If it’s not a productive round, it can go for quite a while and get very expensive,” he says.
“If you go into the community social services sector, sometimes the negotiating process will take so long that the agreement expires before they have signed off on it and they are back at the table again.”
Because bargaining involves multiple meetings, “bargaining itself is usually a time-consuming, expensive process,” says Cascadden.
“(Employers) have to allocate significant resources figuring out what the bargaining issues are and what positions you are going to take on those issues.”
A lot of union locals employ national union members or experts, and those costs have to be borne by the unions, he says. Also, because employees on bargaining committees are not on the job, it affects the employer’s productivity.
“It’s more the certainty (for employers), but the cost is a significant factor,” says Cascadden.
However, expense hasn’t played a direct role in terms of the
strategy at the bargaining table during talks conducted with the B.C. Government and Service Employees’ Union (BCGEU), for example, says Ekman.
“It certainly wasn’t a primary factor in determining the term of the agreement because that’s a negotiation piece with the employer.”
Economy has an impact
The economy can also have an impact. With the 2008 economic downturn, for example, collective bargaining training also took a hit.
“We tended to have contracts that were two to three years in length; all of a sudden, (unions and management) were asking for four and sometimes five years, and I think that was partly due to trying to moderate the raises because of the economy taking a bit of a dive,” says Stephanie Noel, business development manager at Queen’s University IRC in Kingston, Ont.
“As they started to sign more of these deals, our participant levels dropped 20 to 30 per cent in some of the courses for about a two- to three-year period.”
The school offers a course that allows newcomers to the process to “actively participate” in how to bargain, which Noel said is becoming more needed because the longer-term agreements mean there are inexperienced workers being asked to negotiate on committees — and many have no training.
“They’re an engineer, they didn’t take collective bargaining in college or university.”
But things have changed recently.
“Now, come 2016 and part of ’17, enrolments are way up in the collective bargaining course and part of the reason I see that is when it was shorter terms, you would rotate a person or two into the table, and now if you are negotiating four-year or five-year contracts, sometimes the whole table is new people,” says Noel.
With inflation rates having been so low for so long, wages haven’t needed to increase as dramatically as in the past, according to Cascadden, “so it’s generally pretty safe to put in place a collective agreement with a one-per-cent or a half-per-cent-per-year wage increase, and expect you’ll be pretty close to keeping up with inflation.”
This has been especially acute in Alberta, where durations may change, he says.
“In Alberta, we’ve been going through kind of an economic slowdown for a while and as we emerge from that, we may see shorter agreements, in part prefaced on the fact that the unions may want to enjoy the benefits of increased profits, if the companies their members work for are having successful years and they don’t want to tie themselves up.”
The health of a particular industry can also play a role in the length of contracts, according to Ekman.
“(Unions) may be more or less sympathetic to the desires of the employer not to allow wages to go up by a high percentile increase in each year than they would be under a different economic climate,” he says.
“Generally, that would probably drive the length of the agreement down because usually if the employer comes and says, ‘Look here’s our books,’ and they are quite open about the state of their finances — they’re not seen to be hiding anything — and the union is convinced that this is actually a precarious position, so (they say) ‘We can agree from a union perspective that you can only afford a 0.5 or a one per cent increase this year and next.’”
Precarious work consideration
The rise of precarious work may be another reason unions want long-term security for workers.
“It’s no secret that precarious work, especially for non-unionized employees, is growing in Ontario, across Canada,” says Johnstone.
“It’s certainly attractive to a certain number of workers to be able to plan a little longer.”
If you have a five- or a six-year deal, “you know that if you are lucky enough to have a full-time job — unless something goes south for the employer — so you are more secure in terms of planning what you are going to be making in three or four or five or six years down the road,” he says.
On the flip side, with the working world changing so fast in a lot of industries, “two, three, four years can be an eternity,” says Johnstone.
Long-term impact
So, in light of more longer-term agreements being signed, is the relationship between labour and management better or worse?
The answer is not straightforward, according to Ekman.
“Because of all those little nuances, I don’t think you can say generally a longer agreement is better for the relationship versus a shorter agreement,” he says.
“But I think a longer agreement is meant to be a reflection of confidence on both sides that what’s in this agreement should carry us through the term.”
