Low membership keeps unions on the defensive

Sectors to watch for possible labour strife include manufacturing, food retail and forestry

People in the human resources field may hear talk about the balance of power shifting to workers as the retiring baby boomers leave behind a worker shortage, but labour unions aren’t seeing benefits of that shift, according to a Conference Board of Canada researcher.

Instead, with union density at 30 per cent — 17.5 per cent in the private sector — unions are seeing continued loss of power at the bargaining table, said Christopher Hallamore, author of the Conference Board’s Industrial Relations Outlook 2006: Shifting Grounds, Shifting Attitudes.

“The union movement in particular represents an older segment of the workforce. And they’re not very active in the service sectors and that’s where a lot of new hiring is happening,” said Hallamore. With a real labour crunch expected four or five years from now, the unions have about four years to make gains in the service sectors. “If they do that, then we can talk about a power shift.”

With continued pressure to compete in a globalized market, Canadian employers are increasingly tackling aspects of labour relations that they think aren’t working for them anymore. These include bargaining unit structures, grievance procedures and joint committees, said Hallamore.

As evidence, Hallamore pointed to the increased effort by employers to request the Canadian Industrial Relations Board for bargaining unit reviews. There were 82 such applications in the five years between 2000 and 2005, up from 47 in the previous five years.

On the agenda

Also on management’s agenda are such issues as boosting productivity, controlling the wage bill, maintaining pension costs and containing benefit costs for employees and retired workers. The top three concerns on labour’s agenda are improving wage, protecting pension and resisting the push to contract out.

Sectors to watch for possible labour strife include manufacturing, food retail and forestry, said Hallamore. With two large food retail employers, Loblaws Supermarkets and Great Atlantic and Pacific Company of Canada, heading to the bargaining table this year, what they’ll bring to the table are competitive pressure from Wal-Mart, which has announced intentions to open super-centres in Canada. These are stores that are expected to be twice the size of the regular Wal-Mart stores and will carry a full range of produce, meat and bakery products.

“This will put major cost pressures on major grocery stores. We’ve seen what that can do in the United States,” said Hallamore, referring to the five-month strike in 2003 and 2004 involving 70,000 California grocery store workers fighting to keep their health benefits.

Citing comments by Paul Moist, the president of the Canadian Union of Public Employees, Hallamore noted that bargaining in the public sector is generally looking less acrimonious. However, whether it remains the case “will depend largely on provinces’ willingness to bargain with their unions instead of legislate collective agreements and force people into collective agreements,” said Hallamore.

Public-private parity

Bargained wage increases in the public sector are now on par with those in the private sector at 2.5 per cent, the report noted. Also changing on the compensation front is the prevalence of variable pay strategy. According to the Conference Board’s Compensation Outlook 2006, 47 per cent of the 350 organizations surveyed provided incentive pay to unionized employees in 2005, up from 41 per cent in 2004. On top of the base pay increase, the average incentive payout was 4.7 per cent of salary.

Benefit costs at unionized workplaces take a bigger share of total compensation compared to non-unionized workplaces (28.5 per cent compared with 24.3 per cent). Of the employers surveyed, six in 10 said their costs increased in 2005.

To restore power, unions are globalizing the labour movement, said Hallamore, referring to unions not only in Canada, but in the U.S. and Europe. The United Steelworkers, for example, has been focused on forging partnerships with labour organizations in other countries to help organize members and improve working conditions in developing markets. The United Food and Commercial Workers, which has been battling Wal-Mart both in Canada and the U.S., is now targeting the department store’s future markets in South Korea, China and India. The aim is to “educate unions in those countries about Wal-Mart’s corporate behaviour before it establishes itself in a new market,” stated the UFCW’s Brian McArthur in the report.

Going global gives unions access to sheer numbers. The UFCW is a member of Union Network International, which represents 15.5 million workers, with members on every continent and in a range of industries.

“It’s sheer numbers is what it is,” said Hallamore. “They can use those resources in whatever country where they’re located, use those resources to put pressure on particular employers, on governments, and that’s where their strength lies.

“A place where they can operate is at organizations like the International Labour Organization. It’s a bit removed from the fray but when they make resolutions at the ILO those things get passed down to member organizations. That’s another place where those kinds of organizations can bring change to bear.”

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