How long a contract should you sign?

Three-year deals most common

Nobody likes a strike. So much so that private security firm Securicor Canada recently signed a collective agreement with Teamsters Canada that included a clause prohibiting the union from striking at renewal time. In return, Securicor pledged not to lock out employees.

Is this the beginning of a trend? Not likely.

No-strike clauses are essentially a misnomer. By law, every collective agreement has a clause outlawing strikes and lockouts during the course of the agreement. So-called no-strike clauses differ in that the terms of the agreement are renegotiated without either party being able to resort to a strike or lockout. What is happening, in essence, is that the collective agreement has a longer term, and it is renegotiated mid-term.

Every year or so, a contract makes the news because it exceeds the average length. Alberta teachers were recently offered a 10-year agreement and turned it down, Halifax police accepted a 12-year agreement in 2003 and a logging company in Chapais, Que., reached a 10-year agreement last November.

Though one-year contracts were common in the early days of the United Auto Workers, three-year deals have become the norm.

The current practice is a compromise. In periods of steady economic growth and moderate technological change, it was in the interest of employers to lengthen contracts reducing the possibility of a strike. Generally, unions fought this quite effectively. Long terms are seen as a concession in many unions and some won’t even let locals negotiate them without permission. By and large, they are limited to a few sectors: resource extraction (forestry, pulp and paper) and grocery stores.

However, the amount of pent-up resentment that can gather during five to seven years can make the process of negotiating a new contract a difficult and protracted one.

Now, with an uncertain economic climate, heightened technological advancement, just-in-time delivery and devastating competition from offshore, employers may well have more need to modify conditions of employment than do unions.

It isn’t immediately clear why long-term contracts work in some sectors and not in others. Resource industries sell commodities (newsprint, lumber, aluminum) that seldom differ in price. As a result, there may be more economic predictability and less advantage to be gained from tinkering with agreement language. This is especially so where one union dominates a sector and bargains for a master agreement.

However, that does not explain supermarkets, where labour is a more important component in costs and where flexibility to respond to market changes is crucial.

The evidence shows that an employer that wants a longer term agreement is fighting an uphill battle, but it does happen.

Gordon Sova is editor of Canadian HR Reporter’s sister publication CLV Reports, newsletters that report on labour relations. He can be reached at (416) 298-5141 ext. 5129 or [email protected].

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