Interest wanes on interest-based?

Mutual gains bargaining has its successes, as well as a hardened group of detractors

In Atlantic Canada, particularly among industries that are some distance from major markets, many workers have a better understanding that their welfare and the well-being of the companies they work for depend on each other.

At least, that’s how Nova Scotia employment lawyer Donald McDougall sees it. Business owners, too, live side by side among the people they employ, so they seem to be more attuned to workers’ needs.

McDougall, a lawyer with Stewart McKelvey Stirling Scales, has sat on both sides of the bargaining table but currently works on management’s side. He is an ardent believer in interest-based or mutual gains bargaining.

And he has seen it achieve some surprising results, such as agreements on contract lengths — often a contentious issue. In sectors where customer consolidation has taken place, employers are pushed for long-term agreements for the security of supply that they bring, whereas unions generally don’t like them because they mean fewer opportunities for workers to have a say in the terms of work.

Yet, in one case, McDougall saw mutual support an agreement on a six-year deal. In another set of negotiations, both sides decided the best course to take was a one-year agreement.

The six-year agreement was in the corrugate paper industry, which has seen considerable consolidation among buyers. One of the company’s main customers said, “‘Your competitors who are our suppliers are signing six-year collective agreements and we don’t want labour disruption and possible disruption to our supplies every two years.’ In the past, because there were so many customers, they could not exert that pressure. With consolidation of customers, now they can.”

The workers’ representatives took a “very enlightened approach” across the table, said McDougall. “The workers understood the importance of this customer, not only to our business but to their jobs.”

In the other case, it was the union that suggested a one-year collective agreement due to uncertainty in the industry. The employer agreed because “we weren’t sure what was happening in the marketplace either. This is an industry in Atlantic Canada that was being squeezed and we didn’t want to have a strike because our offer had to be so low. Rather than take a strike, we took a one-year agreement and the company management said we’ll look at the situation again. That’s common interest bargaining.”

But this bargaining approach certainly has its detractors. In Calgary, management-side labour lawyer Michael Ford said he has seen parties that have tried it and been disappointed.

“In fact, I know of one that’s ongoing right now, and they’re rolling their heads: ‘Why are we doing this?’ Or if you ask seasoned negotiators, they’ll give you the look of death and say, ‘Are you crazy?’”

Bargaining from a mutual gains point of view is so different from the traditional, adversarial approach, said Ford, that it requires both sides “to invest so much time and energy in being trained in things like, ‘What do you need?’ ‘What are our needs?’ ‘How do we negotiate in a collaborative fashion?’ But to go from traditional bargaining into mutual interest takes a diametric mind-shift. You need to invest the resources and the relationship has to be mature enough.”

According to the Conference Board of Canada’s April report, The Canadian Industrial Relations System: Current Challenges and Future Options, 36 per cent of management and 42 per cent of labour have attempted interest-based or mutual gains bargaining techniques.

Among the reasons cited by those who’ve never tried it, the most common were a sense of resistance from the other side or a view that traditional bargaining is the best approach, according to the survey of some 140 representatives of employers and unions.

Christopher Hallamore, senior research associate and author of the Conference Board’s more recent Industrial Relations Outlook: Pulling Together, Pulling Apart, said that although unions often view the interest-based approach with suspicion, management is also often uncomfortable with the process.

“But while I don’t think people are going out there pursuing interest-based bargaining, I think people are using its principles — active listening, a practical, pragmatic approach to solving problems,” said Hallamore. He cited as example the joint effort in the early 1990s between General Motors and the Canadian Auto Workers union on workplace safety. The efforts not only resulted in the lowest employee accident rate in the Canadian auto industry, it helped put both sides in constant communication with each other over other important issues.

“Here is a mutual interest that the two parties have and what they did was turn it into a vehicle to develop better communication. At no point did they call it interest-based bargaining. But I see some of the principles in there.”

Increasingly, employers and unions see the interest-based approach as just another tool in labour relations, one that may be useful in certain circumstances, said Hallamore. “To take the Inco example, this is an organization that had a long-standing mutual gains approach with the Steelworkers. In the 2003 bargaining, they used it to deal with other issues, but as soon as they got to the hard issues of pension and benefits, the union switched into traditional bargaining. My sense is that’s probably not the only example,” said Hallamore.

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