Unions may make concessions during downturn but both sides show signs of wanting to co-operate more, says study
The sliding economy of the last year has put employers in a position of power when negotiating with unions, according to a leading Canadian business think-tank.
With the possibility of layoffs a real danger facing many organizations in a contracting economy, the pendulum of power has shifted to management, explained Derrick Hynes in the Conference Board of Canada’s annual Industrial Relations Outlook. Organizations are looking to cut costs and may look for employees to bear some of the burden. “Should the current slowdown continue, employers will look for concessions from workers in the year ahead,” he wrote.
Despite this, cost cutting with respect to the workforce should be done with caution, warned Hynes. With the economy likely to pick up over the course of the year, and a widely expected labour shortage in the years ahead, employers should strive to maintain good relations with employees and unions.
Pensions will be an important issue during bargaining and contracting out will be more contentious than ever, wrote Hynes.
It’s unlikely union leaders will be looking for the wage gains they sought as the economy boomed in recent years, added Prem Benimadhu, vice-president and director for the compensation research centre at the Conference Board. “Workers and unions will be more interested in protecting jobs in this uncertain time,” he said.
The report is based on a roundtable of industrial relations experts and practitioners chaired by Benimadhu, last fall.
Regardless of who holds the upper hand, 2002 will be, for the most part, an uneventful year in unionized workshops with just three per cent of respondents to a Conference Board survey saying they expect a strike or lockout. That’s because both unions and employers have a greater understanding of the need to work collaboratively with one another, explained Hynes. There is a “high degree of maturity within Canadian labour relations: both parties now openly acknowledge that their individual interests are inextricably linked,” he wrote.
Management is increasingly willing to provide unions with high-level information and generally making more of an effort to involve the unions with the business. Similarly, unions have a better sense of business realities and no longer make the “knee-jerk” reactions they once did, said Hynes.
He pointed to the CAW participation in two significant workforce reductions last year as proof of that new attitude. When Air Canada was forced to cut costs in November, the CAW worked to establish job sharing and early retirement arrangements. And when GM announced it was closing its Ste. Thérése, Que. manufacturing plant, eliminating 1,200 jobs, CAW president Buzz Hargrove stressed that the facility “wasn’t economically viable.” Five or 10 years ago, a union president would have “lost it” over a decision like that, said Hynes. Instead the union worked to maximize retirement packages for affected employees.
Conversely, in a well publicized move last month, Quebecor Inc. announced plans to outsource part of its Vidéotron cable unit after the Canadian Union of Public Employees refused to accept a series of concessions aimed at cutting costs. Though the deal is expected to close in May, Vidéotron said it would reconsider the deal if the union was willing to make “major concessions,” but the union said it would not “give in to that blackmail.” The company was reportedly asking employees to work an extra five hours a week for the same pay and take less paid holiday time.
But Hynes said conflict is increasingly the exception and not the norm. Perceptions to the contrary stem in part from the media’s preference for covering conflicts which make better stories. When the Industrial Relations Outlook came out it was only on page six of the Globe and Mail, he pointed out.
“It is not nirvana out there but we are saying there certainly are some positive steps toward collaboration,” he said. Ultimately it comes down to a commitment from the people who manage the relationships. “It needs to be authentic and often you don’t know if it is authentic until you are a couple of years into it.”
geneviéve bich, vice-president, Industrial Relations for Bell Canada, agreed that it takes a great deal of time, commitment and personal resolve to develop good working relationships with labour leaders.
“They (the unions) can be your best partner or your worst enemy,” said bich (who does not capitalize her name). “Your union is a partner in your business and you can’t even divorce them. It is not like marriage.”
Good relationships are built on trust but it takes a long time to develop that trust because every time a dispute pops up in one area it typically infects all aspects of the relationship.
“You can lose trust and credibility in a moment but building it takes months and years,” she said. “You still have to work at it. I can’t let that dispute stop me from trying to maintain a healthy relationship.”
She said Bell has been trying to improve relations with its two unions by sharing more information with union leaders so that decisions made by the organization have more context.
Eventually when you can pick the phone up and have open, honest dialogue and share information, you know things are getting better. “That is your real barometer. Your ability to talk openly about issues.” The victories are often small but over time they build upon themselves so that labour leaders begin to trust their management counterparts. “It’s like a soufflé where the recipe is simple but it is an art to do it right.”
Aside from looking to secure the pensions of their workers, union leaders will also be looking to convince employers to resist contracting out work. “Why would we, as a union, work hard to save a company if major portions of the work will be handed to contractors,” asked Leo Gerard, International President of the United Steelworkers of America and one of the participants of the roundtable.
Louis Erlichman, Canadian research director of the International Association of Machinists and Aerospace Workers said that rather than outsourcing, employers need to make a bigger commitment to training if they want to improve relations with unions but he doubts they are willing to do so. “When employers say they do not have the skills in-house to get the job done, they should be offering training alternatives to workers instead of contracting out the work.” Employers often complain about skills shortages but they refuse to train the workers they have and would rather contract out the work.
Employers claim they want to co-operate with unions but often their first choice is to get rid of the union altogether, he added.
And while he agreed that unions are not in a position of strength right now, he said most unions have always been willing to make concessions.
“As unions we are not trying to undermine the companies we work for,” he said. Some unions boast about never making concessions to look good in front of members, but in all collective bargaining the two sides come together with a list of demands that can’t possibly be met and then they start to give things up. He also refutes the notion that union members profited from the booming economy of the late ‘90s. Unions may have won some wage increases but even the really good agreements only saw workers keeping up with inflation, he said.
“By their very nature, union-management relations will likely always have an adversarial tone, explained Hynes. “In the Canadian context, however, this relationship continues to evolve in a more positive manner. In many respects, the days of wildcat strikes and unexpected lockouts now form part of the colourful and challenging labour relations history.”
More than 50 per cent of respondents to the Conference Board describe their union-management relationship as “more co-operative than uncooperative” and just five per cent of respondents predicted their relationship will deteriorate in the next year or two.
With the possibility of layoffs a real danger facing many organizations in a contracting economy, the pendulum of power has shifted to management, explained Derrick Hynes in the Conference Board of Canada’s annual Industrial Relations Outlook. Organizations are looking to cut costs and may look for employees to bear some of the burden. “Should the current slowdown continue, employers will look for concessions from workers in the year ahead,” he wrote.
Despite this, cost cutting with respect to the workforce should be done with caution, warned Hynes. With the economy likely to pick up over the course of the year, and a widely expected labour shortage in the years ahead, employers should strive to maintain good relations with employees and unions.
Pensions will be an important issue during bargaining and contracting out will be more contentious than ever, wrote Hynes.
It’s unlikely union leaders will be looking for the wage gains they sought as the economy boomed in recent years, added Prem Benimadhu, vice-president and director for the compensation research centre at the Conference Board. “Workers and unions will be more interested in protecting jobs in this uncertain time,” he said.
The report is based on a roundtable of industrial relations experts and practitioners chaired by Benimadhu, last fall.
Regardless of who holds the upper hand, 2002 will be, for the most part, an uneventful year in unionized workshops with just three per cent of respondents to a Conference Board survey saying they expect a strike or lockout. That’s because both unions and employers have a greater understanding of the need to work collaboratively with one another, explained Hynes. There is a “high degree of maturity within Canadian labour relations: both parties now openly acknowledge that their individual interests are inextricably linked,” he wrote.
Management is increasingly willing to provide unions with high-level information and generally making more of an effort to involve the unions with the business. Similarly, unions have a better sense of business realities and no longer make the “knee-jerk” reactions they once did, said Hynes.
He pointed to the CAW participation in two significant workforce reductions last year as proof of that new attitude. When Air Canada was forced to cut costs in November, the CAW worked to establish job sharing and early retirement arrangements. And when GM announced it was closing its Ste. Thérése, Que. manufacturing plant, eliminating 1,200 jobs, CAW president Buzz Hargrove stressed that the facility “wasn’t economically viable.” Five or 10 years ago, a union president would have “lost it” over a decision like that, said Hynes. Instead the union worked to maximize retirement packages for affected employees.
Conversely, in a well publicized move last month, Quebecor Inc. announced plans to outsource part of its Vidéotron cable unit after the Canadian Union of Public Employees refused to accept a series of concessions aimed at cutting costs. Though the deal is expected to close in May, Vidéotron said it would reconsider the deal if the union was willing to make “major concessions,” but the union said it would not “give in to that blackmail.” The company was reportedly asking employees to work an extra five hours a week for the same pay and take less paid holiday time.
But Hynes said conflict is increasingly the exception and not the norm. Perceptions to the contrary stem in part from the media’s preference for covering conflicts which make better stories. When the Industrial Relations Outlook came out it was only on page six of the Globe and Mail, he pointed out.
“It is not nirvana out there but we are saying there certainly are some positive steps toward collaboration,” he said. Ultimately it comes down to a commitment from the people who manage the relationships. “It needs to be authentic and often you don’t know if it is authentic until you are a couple of years into it.”
geneviéve bich, vice-president, Industrial Relations for Bell Canada, agreed that it takes a great deal of time, commitment and personal resolve to develop good working relationships with labour leaders.
“They (the unions) can be your best partner or your worst enemy,” said bich (who does not capitalize her name). “Your union is a partner in your business and you can’t even divorce them. It is not like marriage.”
Good relationships are built on trust but it takes a long time to develop that trust because every time a dispute pops up in one area it typically infects all aspects of the relationship.
“You can lose trust and credibility in a moment but building it takes months and years,” she said. “You still have to work at it. I can’t let that dispute stop me from trying to maintain a healthy relationship.”
She said Bell has been trying to improve relations with its two unions by sharing more information with union leaders so that decisions made by the organization have more context.
Eventually when you can pick the phone up and have open, honest dialogue and share information, you know things are getting better. “That is your real barometer. Your ability to talk openly about issues.” The victories are often small but over time they build upon themselves so that labour leaders begin to trust their management counterparts. “It’s like a soufflé where the recipe is simple but it is an art to do it right.”
Aside from looking to secure the pensions of their workers, union leaders will also be looking to convince employers to resist contracting out work. “Why would we, as a union, work hard to save a company if major portions of the work will be handed to contractors,” asked Leo Gerard, International President of the United Steelworkers of America and one of the participants of the roundtable.
Louis Erlichman, Canadian research director of the International Association of Machinists and Aerospace Workers said that rather than outsourcing, employers need to make a bigger commitment to training if they want to improve relations with unions but he doubts they are willing to do so. “When employers say they do not have the skills in-house to get the job done, they should be offering training alternatives to workers instead of contracting out the work.” Employers often complain about skills shortages but they refuse to train the workers they have and would rather contract out the work.
Employers claim they want to co-operate with unions but often their first choice is to get rid of the union altogether, he added.
And while he agreed that unions are not in a position of strength right now, he said most unions have always been willing to make concessions.
“As unions we are not trying to undermine the companies we work for,” he said. Some unions boast about never making concessions to look good in front of members, but in all collective bargaining the two sides come together with a list of demands that can’t possibly be met and then they start to give things up. He also refutes the notion that union members profited from the booming economy of the late ‘90s. Unions may have won some wage increases but even the really good agreements only saw workers keeping up with inflation, he said.
“By their very nature, union-management relations will likely always have an adversarial tone, explained Hynes. “In the Canadian context, however, this relationship continues to evolve in a more positive manner. In many respects, the days of wildcat strikes and unexpected lockouts now form part of the colourful and challenging labour relations history.”
More than 50 per cent of respondents to the Conference Board describe their union-management relationship as “more co-operative than uncooperative” and just five per cent of respondents predicted their relationship will deteriorate in the next year or two.
