Whither Unionism: Current State and Future Prospects of Union Renewal in Canada

Trends and pattern of union membership and density as well as organizing activity are clear signs of stagnation and complacency in the labour movement. While some unions are doing better than others, the labour movement as a whole appears to be at standstill. It is also evident that there does not appear to be any sense of impending crisis, partly because of steady growth of public sector employment feeding the illusion of stability.

Will the Unionized Workplace Attract and Retain New Talent?

Do unionized organizations in British Columbia face a greater challenge attracting and retaining new post-secondary graduates? Does the often adversarial nature of the union-management relationship translate into a culture that is perceived as negative and inconsistent with Gen X-Y workplace values? To what extent does a perceived negative workplace culture affect their decision to join or stay? What can employers and unions do to reshape any negative perception that may exist? These are questions that Ken Kaiser, faculty member in the School of Business at the British Columbia Institute of Technology, has posed in human resource management and labour relations classes for several years. His answer: workplaces with a perceived adversarial culture are at a serious disadvantage in competing for young, trained professionals.

IR Scene is All Shook Up

Rob Hickey, a facilitator in the Queen’s Master’s of Industrial Relations program, says restructuring is the big issue of 2007 for both labour and management. Below, Rob – who worked as an organizer for the Teamsters for a decade in the United States, and earned his MA and PhD from Cornell University’s School of Industrial Relations and Labour Relations Studies – discusses IR issues, and what he’d most like to see happen in IR in the year ahead.

What are the most crucial labour-management issues for 2007?

Key issues facing labour and management over the next year continue to revolve around the process of economic restructuring. The recent announcements of layoffs by Chrysler, preceded by Ford, the ripple effect that the Big Three auto sector has on parts suppliers – that type of restructuring is certainly impacting the field of IR and labour unions, the Canadian Autoworkers in particular.

This also plays into other forms of restructuring at the level of the workplace. Take the current CN strike: one dimension is a wage dispute, but the other is restructuring of work processes, or the drive for flexibility on the part of management.

I continue to see the issue of restructuring, both on the broader, industrial level and on the micro, workplace level as being the key challenge facing management and labour in the coming year.

What are the top priorities for management?

Management’s priorities are consistent with the term ‘flexibility’, and it creates clear tensions with unions over questions of job security, and economic security in general.

I think flexibility relates to both numeric and functional flexibility; functional flexibility as seen in the CN dispute and numeric flexibility based on the employers’ ability to outsource, contract out, to rationalize and downsize their workforce. We saw this at Chrysler, among the Big Three, and at a host of companies including Eastman Kodak and Nortel.

You see companies trying to adapt their operations to the changing global economic environment, and that includes in some cases shifting production from North America to Mexico, or low-cost offshore locations in the Far East. Or it includes what I call “in sourcing” – bringing non-employee contractors into a local workplace. So the work may still be done locally, but no longer by core employees of a particular employer. These forms of flexibility continue to be attractive to employers as part of overall cost containment or cost reduction strategy.

It’s not simply a question of adapting to current economic pressures: it’s also about restructuring the work process, and creating different structures in the employment relationship.

What are the top priorities for labour?

Pressures from economic restructuring are increasing the profile of economic and social security concerns. So job security and also broader social security remain a serious focus of labour’s agenda. I include social security because while the loss of manufacturing jobs is one element, it also contributes to concerns about a crisis in the provision of public services and the quality of the health care system – which the Canadian labour movement is deeply concerned about.

Wages will of course not disappear from labour’s concerns, and that will continue to ebb and flow. Statscan has tracked contractual wage increases at slightly above the rate of inflation, and I don’t see that changing significantly in the near term. Labour unions do not want to see their members’ purchasing power decline.

Related to the first point on economic restructuring, we see rapid changes taking place in ownership structures through mergers and acquisitions. Take Novelis here in Kingston – an India-based firm, Hindalco, just made one of largest buyout offers in the industry’s history to purchase this aluminium manufacturing company. This type of global capital restructuring creates concern for unions but also opportunities that may bring much needed capital investment to operations that have historically been efficient, productive, and profitable, but lack money to recapitalize.

So restructuring in this case is not just about job protection and layoff concerns, but also about investment flows, capital improvements, and commitment to innovative technology to local operations.

A recent Conference Board IR report said management/labour interests are converging, and identified the “war for talent as “the tie that binds.” Do you agree?

I was left unconvinced that pressures for convergence overcome the inherent tensions in the drive for flexibility. Management’s drive for flexibility may indeed trump the ability of the parties to cooperate on issues of retention and skills, and I think we are seeing that. One of the commentators in the report was from CN, and she was prescient in talking about types of flexibility changes they were seeking in their contract negotiations, claiming that current contractual work-rules were still based upon operations using steam locomotives. I’d venture there is some hyperbole involved in that statement, but I do think it accurately reflects what the real tensions are and that there will continue to be serious areas of dispute in terms of restructuring at the workplace level.

There are concerns on the union’s part about safety and economic and social security; and on the employers’ part about winning greater flexibility and efficiency gains. It is not enough to say that the changes in the work rules are merely about modernizing in the current economic environment – one also has to recognize the serious concerns unions have about the health and safety impacts of work rule changes and the challenges of maintaining health and safety standards with a significantly reduced workforce.

Employers call it flexibility when one person can do three jobs; unions call it a safety hazard. So how the parties resolve that fundamental dispute is a real challenge, and will not be overshadowed by changes in the demographic makeup of the Canadian workforce. That’s just part of the background context for what will remain in the foreground of challenges facing labour and management in the global economy.

Do you think the changing demographics will promote grassroots labour-management partnerships, as predicted in the report?

One of the challenges even in successful partnerships between labour and management is moving the partnership down to the shop floor. There may be great relationships among top negotiators and top officers of the two organizations, but frontline supervisors and rank-and-file workers still see traditional disputes. So how you move the culture of partnership down to a grassroots level? I think that’s a real challenge to the long-term maintenance of partnership agreements.

To the extent there are new opportunities, I don’t know that they will stem strictly from changes in the demographic makeup of the Canadian workforce. I think the real challenge of partnership is to build it throughout organizations, and not just on the top tiers.

Each organization has its own approach to more grassroots engagement. So the extent to which labour and labour leaders have been able to develop more inclusion in terms of membership participation, democracy and communications is one element of that. At the same time management has developed more team-oriented approaches, flatter structures, and broader engagement with front-line employees.

I’d say both trends are happening, but I’m not convinced they are always happening in concert with one another – meaning sometimes they are vying for the hearts and minds of members more than moving partnership agreements deeper into the culture of the organization.

What other developments can we expect to see in IR this year, and beyond?

In 2007 on the collective bargaining front a number of important contracts are coming open. In the public sector, health services in Ontario and Alberta will involve about 60,000 workers. In the federal sector there are contracts involving Quebec public workers particularly in transit in Montreal. So certainly the public sector remains a rich area for labour-management relations, partly as it is so highly unionized, and partly because it does set the tone for labour-management negotiations across a spectrum of industries.

Also the pace of restructuring, both on an industrial scale and workplace scale, will continue to be an area to pay attention to. Whether we continue to see contraction of the unionized auto sector or not we will certainly see the ripple effects as Chrysler contracts by 2,000 jobs in Windsor, and all the jobs that feed into those assembly operations are affected. How unions and managers negotiate those changes and help the workforce adjust will be critical in the coming year.

What development would you most like to see in IR this year?

I’d like to see the parties have an ability to take a step back and think about not just how they deal with restructuring on an individual basis, but how Canada manages the restructuring process on a nationwide basis. So to consider it both in terms of changes on an industry level, and in terms of changes in geographic flows and demographic flows.

There’s not currently a good forum for this interchange, at least directly between organizations of labour and organizations of management. A tripartite forum could exist where you have federal/provincial ministers of labour, along with representative of the Canadian Labour Congress, and Canadian employer associations. I think would be a tremendous step forward, helping parties navigate the restructuring process.

I don’t see it happening. But if I had a wish-list, I would really like to see a forum for a broader-based discussion on how we handle restructuring on a national basis and all the way down to the workplace level.

Strategic Negotiations: Perspectives from a Road Well-Travelled

The Don Wood Lecture in Industrial Relations was established by friends of W. Donald Wood to honour his outstanding contribution to Canadian industrial relations. Dr Wood was Director of the Industrial Relations Centre from 1960 to 1985, and the first Director of the School of Industrial Relations, established in 1983. The lecture brings to Queen’s University distinguished individuals who have made an important contribution to industrial relations in Canada or other countries.

George C.B. Smith, Senior Vice President, Human Resources and Organization at CBC/Radio-Canada, shares lessons from his 33-year career as a management negotiator. He underlines three essentials for success: organizational alignment; managing the interpersonal aspects; and managing the complexities of the process.

The State of the Union Movement in Canada: The Challenges We Face and the Innovations We Must Undertake

The Don Wood Lecture in Industrial Relations was established by friends of W. Donald Wood to honour his outstanding contribution to Canadian industrial relations. Dr Wood was Director of the Industrial Relations Centre from 1960 to 1985, and the first Director of the School of Industrial Relations, established in 1983. The lecture brings to Queen’s University distinguished individuals who have made an important contribution to industrial relations in Canada or other countries.

Buzz Hargrove, National President of the National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-TCA Canada), reviews the challenging situation in which the Canadian labour movement finds itself today, tallies strengths and weaknesses, and calls for the union movement to be more innovative in addressing those challenges and weaknesses.

What’s to Love About Employee Ownership?

Unions often feel uneasy about employee ownership, Dr. Beatty says. But in these cases drawn from her research, they learned to love it, embracing it as a potent strategy for saving jobs, keeping plants open, and building better union-management relationships.

Surprising fact: in 2002, unionized workers made up a larger percentage of U.S. employees holding stock options than non-union workers (General Social Survey for 2002 – Rutgers University).

Surprising fact: U.K. workplaces with employee share ownership have much higher union membership than those without it.

Numerous carefully controlled studies have shown that companies with significant employee ownership grow faster, by about three percent annually. Furthermore, faster growth of eight percent to 11 percent was experienced by companies implementing employee ownership (EO) “well” (Beyster Institute website). For example, UPS, called “the tightest ship in the shipping business,” is majority owned by its 300,000 unionized employees.

So why aren’t unions jumping on EO? It seems that unions become enthusiastic about it only when it provides a way of saving jobs during looming crises. Some union leaders have become suspicious because the term “ESOP” has become associated with union busting during high-profile failures such as United Airlines. Others have a philosophical reluctance to participate in corporate decision-making because of their duty of fair representation. Also, some unionists view minority representation on corporate boards as a waste of time.

But my case studies of five unionized Canadian plants that adopted EO during a threatened closure might convince them otherwise. Two of the five, Great Western Brewery and Algoma Steel, survived as independent entities; and two others, Spruce Falls and Provincial Papers, were turned around and sold to larger companies. EO proved a potent strategy in the union’s struggle to save jobs and keep the plants open.

If we are interested in relationship improvements as well, the contrast between Provincial Papers and Algoma is very instructive. At both, the union-management relationship had long been difficult. But Algoma’s union got behind employee ownership took control of much of the buyout process and co-operated with the company to preserve jobs and union membership.

A key element of the union plan was the framework for governance. It helped the parties anticipate and resolve many future difficulties before they became severe. It also provided a statement of values that the new company had to live by – values which the union strongly endorsed.

After the buyout, union and management officers addressed gatherings of staff together, symbolizing the new way of running the company. Joint committees at all levels were put in place, and much effort went into gaining employee input into decisions. None of this co-operation prevented the difficult decisions to cut wages and jobs at Algoma, and both of the parties had to share in the pain. However, this pain did not poison the new relationship.

At Provincial Papers, by contrast, the unions did not take charge of the process. Management seemed reluctant to share power with the new employee owners, and so union officers felt they had to battle for information and influence. Whereas employee reps on the Algoma board of directors were able to make an important contribution, at Provincial Papers they were not effective. Despite having studied the successful Spruce Falls buyout, Provincial Papers seemed unable to understand or implement any of the joint structures, participative initiatives or a philosophy congruent with employee ownership. They held onto their old adversarial attitudes and beliefs. So it was a blessing when a large firm purchased the company and reinstated a traditional management hierarchy.

When a unionized company is in crisis, employee ownership can help it survive. But beyond survival, the following factors can raise the probability of sustained success and a better relationship:

  • New senior leaders should have expertise in the industry and experience with employee ownership;
  • Employees should make an actual investment in the stock, even if it is not large – and even if wage and benefit concessions are also necessary;
  • Management must work with the union and help the union leaders look good;
  • Implement the turnaround strategy quickly;
  • Work to create and maintain good employee relations;
  • Make a commitment to employee ownership as a philosophy;
  • Encourage employee involvement and participation.

As Canadian unions and companies become more experienced with employee ownership, they will learn how it can create many win-wins for both union and management – beyond saving jobs during a crisis.

The Effects of Human Resource Management and Union Member Status on Employees’ Intentions to Quit

This discussion paper reports on research that looked at whether the relationship between employee intention to quit and human resource management (HRM) changed based on union membership. The investigation first considered whether HRM reduced or increased an employee’s intention to quit. Next, the moderating effect of union membership on the relationship between HRM and quit intent was considered. Did an employee’s union member/non-member status in any way change the effects of HRM on employee quit intent, and if so, how?

The State of Our Unions – and Critical Issues in Labour-Management Relations

Dr. Pradeep Kumar of Queen’s University School of Policy Studies is an expert in unionism, collective bargaining, and workplace change in North America. Dr. Kumar, Director of the Masters of Industrial Relations program, spoke with us recently about union-management relations, and what is likely to develop in 2005 and beyond.

How important are labour relations in Canada?

First, let me emphasize that union-management relations are particularly important in Canada since unlike the U.S., we are heavily unionized. Although Statistics Canada numbers suggest that only one-third of workers are unionized, if you look at the impact of unions on the workforce, it is closer to 50 percent because there are a number of non-union companies that pay their employees on par with unionized organizations. Japanese transplants such as Toyota and Honda are examples where compensation packages follow the pattern of General Motors, Ford, and Chrysler.

If you look at the rate of unionization by workplace size, 50 percent of workplaces with more than 200 employees have a union. These represent some of the leading industries essential to the Canadian economy: auto, steel, pulp and paper, telecommunications, the auto sector. These key industries are all very heavily unionized – financial services is the one exception.

In the Canadian case another important thing is that while union density has been declining in most countries, here it has been stable at 30 to 35 percent. Union membership has been going up steadily but marginally. Unions here have even made significant inroads in service industries, though it is still rare to see organized labour at Wal-Mart or McDonalds.

However, most international observers believe that if Wal-Mart unionizes in any country, it will be Canada. There have been many applications to organize, and one was successful in Quebec. The place is unionized and is negotiating its first agreement. If the union is successful in reaching the first agreement, Quebec will have the first unionized Wal-Mart in North America. The only existing Wal-Mart with aunion is in Germany.

How healthy are unions and union-management relations in Canada?

Union-management relations have been very tense over the past 10 to15 years. It’s partly due to globalization and its impact on companies. Competitive issues have become very crucial, affecting labour-management relations through corporate downsizing, for example.

In addition to economic changes, there has been significant change in the labour force. Work-family issues have become more and more important with the accelerated workforce participation of married women. Work-family issues are important for everyone, but for the 70 percent of married women in the workforce, it is a matter of survival. This has brought many issues to the bargaining table. I’m not just talking about flexible work practices, but also about anti-harassment policies, especially in male-dominated professions, and in hospitals, where harassment of nurses has gone up tremendously. Violence in workplaces overall has increased significantly. The presence of women creates a totally different type of workplace, and with that, new labour-management issues have emerged.

Work-family conflict is made more acute by the lean orientation of the workplace, with most organizations in the public and private sectors cutting costs and trying to produce more with as few resources as possible. The reason why the work-family issue has become such a topic of discussion is that it is hitting the professionals and managerial workers. It has been a problem for clerical, administrative, and blue collar workers for years, but now even the managers are complaining.

Apart from issues relating to economic change and changes in the labour force, labour relations in the public sector have been going from bad to worse each year. This is partly due to the ideological orientation that comes from globalization that the private sector can always do things better than the public sector, as reflected in policies of the former Conservative government in Ontario, and now in B.C.. This has increased contracting out, deregulation, and privatization, leading to downsizing.

The other thing is that the public sector is the one area where employers have bargaining power not only as employers but as the government. So if the union does not agree to what they want at the bargaining table, they can pass legislation or designate a large number of employees as essential. The public sector is very centralized, with large bargaining units with a very high degree of diversity in which people are doing all kinds of different jobs. Interests are very different. This is difficult for both unions and employers, and creates problems for negotiators.

What are today’s most crucial labour-management issues?

I’d say the biggest immediate labour-management issue for the public and private sector is pensions, and this will be true into 2005. We have seen many private sector cases like Stelco and Air Canada where pensions have been the main issue: not just the pension entitlement of the employee, but the ability of the employer to pay the retiree’s pension. Often retirees outnumber current employees in older private sector companies. Therefore the pension liabilities are far greater in relation to employees who have already retired. Companies have significant unfunded pension liabilities in the millions of dollars – in some cases, billions. This, obviously, is a huge issue.

Another force causing change is the aging of the workforce. One-third of the workforce in the public and private sectors will be retiring in five to 10 years. A lot of employers see it as an opportunity to lower their costs on a permanent basis. We are already seeing a two-tier system: one pay level for current employees, another, lower one, for new hires. This is becoming common in the auto sector and with airlines, and we’ll be seeing more of that.

What developments would you most like to see in 2005 and beyond in labour-management relations?

I would like to see public policy changes to provide more rights of consultation and information to workers and their unions. I think one of the main causes of tense relationships and the reason unions get a bad name is mistrust between workers and management – which is really rooted in lack of information and consultation. I’m not saying give veto power to the union, but if you could somehow mandate consultation, I as an academic would be happy and so would many others, because this would put labour relations on a more stable footing.

One area where the right of information and consultation would help most is in workloads. We have to find a way to stabilize workloads so that there are no health and safety risks. We are spending millions of dollars in public health costs relating to increasing workloads.

We really have to find a way. Many organizations are aware of the issues and the consequences of not dealing with it. General Motors, for example, is spending a lot more on health and safety and ergonomics. Last time they gave $36 million to the union to undertake training, and an additional $15 million or so specifically for health and safety training. Management must realize that if companies want more productivity, with fewer people, there is bound to be higher workloads and greater health and safety costs. Without supportive policies, productivity gains will not be sustainable.

How are emerging labour-management issues affecting the training being provided to students in the Queen’s Masters of Industrial Relations (MIR) program?

The MIR curriculum has to be dynamic to meet the changing needs of students and employers. We added a new course a few years ago in public sector bargaining, and are adding another one this spring in public sector HR management. We also want to introduce a course on work and health. The content of our core courses evolves to provide students with the skills and knowledge they need.

As far as competencies go, in every reference I’ve given for a student for the past three years, the employer’s first question has been, ‘How good are their communication skills?’ They mean not just verbal but also interpersonal, and ‘Can this student work in teams? ‘That’s why we have such an emphasis on group work. Research skills have also become increasingly important, partly because things are changing so fast that what you learn today may not be relevant tomorrow. You have to be able to keep up with developments, with best as well as worst practices. Employers expect that. They don’t want to have to do a lot of orientation or training, and expect grads to be able to undertake it prior to joining the workforce.

Globalization and North American Integration: Implications for the Union Movement

The Don Wood Lecture in Industrial Relations was established by friends of W. Donald Wood to honour his outstanding contribution to Canadian industrial relations. Dr Wood was Director of the Industrial Relations Centre from 1960 to 1985, and the first Director of the School of Industrial Relations, established in 1983. The lecture brings to Queen’s University distinguished individuals who have made an important contribution to industrial relations in Canada or other countries.

In his lecture, Steelworkers President Leo Gerard talks about the threats posed by globalization.

Individual Employee Performance Management in Union Environments: The Emperor goes to Abilene

Why is there no consensus about best practices for managing individual employee performance (IEP) in unionized workplaces? This paper discusses the reasons, investigating the success of collectivist or high-performance work systems; why managers and unions need to address IEP issues and what’s in it for them; what academic research says about best practices; and workable strategies for managing IEP.

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