Companies and unions face up to economic realities

Recent collective bargaining shows striking trends

Since the inevitability of the current economic downturn became clear, CLV Reports has been waiting to see evidence of how it would be reflected in collective bargaining. Outside of the Big Three early renewals, there seemed to be little indication. Many jobs were being lost due to plant closures, and also presumably in the smaller-scale cutbacks that don’t make the news, but the private-sector collective agreement renewals we were seeing, although smaller in the area of wage increases, were not otherwise markedly different from what preceded them.

However, in Quebec, two perhaps bell-wether agreements have just been reached after prolonged bargaining. One is at Waterville TG and the other is at Beaulieu Canada. In both cases, the local membership accepted the necessity of radically changing the nature of their employment to reflect the conditions imposed by world markets. At Waterville, job security guarantees were eliminated in return for investment in the plant. Beaulieu reports that 67 per cent of the UNITE HERE members at the Acton Vale plant have accepted wage concessions in tandem with unspecified cost-cutting measures on the company’s side.

Another element of many recent collective agreements is the early retirement incentive. Lakeside Steel, for example, has just reached an agreement with the CAW that includes a $20,000 incentive to 70 employees, approximately one in six of the workforce. An “on-call workforce” made up of retirees will be used to increase flexibility. In the agreement at Johnson Controls, incentives for early retirement also figure.

The use of early retirements to reduce layoffs seems a reasonable and humane measure. These may well be manufacturing jobs that will not reappear when the economy turns around and are permanently gone. However, forecasters have suggested that early retirements have already gone too far and are contributing to a growing labour shortage. The skills these workers possess may not be the ones needed in the future, but their ability to learn and be retrained must be used.

We are also starting to see more wage freezes, like those at Johnson Controls contracts in Whitby and Tillsonburg and for the first two years at Lakeside.

These changes to expectations cannot be easy. Agreeing to diminish your lifestyle never is. In the past, employers have made these arguments and the changes, originally intended to be temporary, stayed even when times improved. Sometimes, memories are long. But when the need is undeniable and the argument is clear, unions and their members behave as the rational economic actors they are.

The one place we have not seen this, at least not yet, is in mining. Times were so good for so long, and the industry hit the wall so quickly, that it does not seem clear to unions that the stark bargaining choices facing manufacturers are also facing them, if indeed they are. But the parties to the strikes at PotashCorp in Saskatchewan and Xstrata in Timmins remain entrenched.

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