Nothing like a wildcat strike at a major utility or transport company to provide us with a quick lesson in industrial relations. Not since the famous wildcat strike in Quebec in 1983 have we seen a level of resistance that we recently witnessed with the defiance of Air Canada flight attendants of a ruling that they must return to work and await the outcome of binding arbitration.
So some background information is required.
Labour and industrial peace
It has been nearly 120 years since then Labour Minister, William Lyon MacKenzie-King created the Industrial Disputes Investigation Act. This was in response to a strike by coalminers in Lethbridge, AB in 1906 where he deemed that it required the parties to submit to a compulsory form of conciliation, deemed in the public interest. Amid initial skepticism from the union side, his intervention into that dispute was generally considered a success, the logic for which was to ensure “industrial peace.”
The resulting legislation marked the beginning of a legacy whereof the government acted as the third-party intervener in so-called ‘industrial disputes’, such disputes being solely in the private sector, in matters of the public interest, that is in disputes regarding transport, mining and utilities. Therein the third party, the government, would be appointing conciliators, mediators or arbitrators, or, alternatively, writing back-to-work legislation, with the professed intention of ensuring labour peace. (Craig, A.W.J.: The System of Industrial Relations in Canada. 1985)
It should be understood that before 1872, trade unions in Canada were considered “illegal combinations” involved in “criminal conspiracy” against single owner employers. But it’s not as if this idea has died altogether.
Ayn Rand, the infamous Russian-American theorist saw capitalists as the greatest of persecuted minorities. And we might suspect that several current Republican legislators, and perhaps their President, might have read that book or been inspired by her words. In fact the former head of the US Fed., Alan Greenspan, appointed by Ronald Reagan, wrote the introduction to her most influential book. And there should be no doubt that since Reagan decertified the Air Traffic Controllers union in 1982 that such sentiment still prevails in the US in the Republican party and even among the majority of Supreme Court Justices there. Happily our system of industrial relations has survived somewhat more intact.
However, regardless of the actuality or plausibility of the success of that new foray into intervention, to resolve an industrial conflict, over time, the nature of such interventions have changed dramatically, in parallel with the changes in the composition of labour-management relations in Canada. The most dramatic aspect, as we shall see, has been the emergence of public sector unions and the new reality that governments in Canada have become the largest employers. Their subsequent role as employer has changed, not just the landscape of labour relations but also the way in which governments, as third-party intervenors, go about their business. All of this will have significant bearing on the way we understand the wildcat strike that took place at Air Canada. For this, several factors must be accounted for.
Government policies and the threat to profitability
The first is the idea that the successes of collective bargaining, for unionized workers, were seen as a threat to the profitability, hence viability, not just of individual corporations but the entire “free market” capitalist system. Indeed the successes the unions achieved in the post-war era, in terms of wage increase and working conditions, resulted in major companies banding together to form lobby associations to combat the influence of labour unions and more generally social movements, in public policy. (See Stanbury: Business-Government Relations in Canada; and Gollner: Social Change and Corporate Strategy)
We must understand that the “three wise men” from Quebec, Trudeau, Pelletier and Marchand, who joined the Liberal party in the 1960’s, and became Minsters in the Pearson government, came from the Quebec labour movement and its resistance to the Duplessis era of anti-unionism. Yet a turn away from such pro-union policies is well illustrated in PM Pierre Trudeau’s decision to impose six and five wage and price controls in 1982, likely at the behest of the emerging influence of the Canadian corporate lobby constituted of the Business Council on National Issues and the Canadian Federation of Independent Businesses.
Now the true significance of this was its effects upon the parties: while prices were not the direct target, and prices were never directly affected by the law enacted, wages were, and six and five wage increases were judiciously enforced, on the wage side, leading to ever more draconian ideas that only by controlling wages could inflation be positively affected downward. This is the theory of wage-push inflation, that inflation, ultimately, is caused by high union wages. And certainly it has had long-term effects with wage increases never exceeding, or even coming close to that level since.
NAIRU
Next was the targeting of wages through Central Bank policies: the Non-Accelerating Inflation Rate of Unemployment (NAIRU) thesis. The theory asserted was that there was a direct relation between the rate of interest, unemployment and hence price stability. In other words, the best way to curb inflation was by keeping interest rates high as this deterred wage hikes through unemployment – hence competition within the labour market and the fear of unemployment – caused, in effect, by bankruptcies. And this policy Canada has maintained for over 40 years.
The role of government as employer
Now when the government was the third-party intervener, into private sector “industrial disputes,” its general mandate was to create a process wherein unions’ right to collectively bargain was established, first by voluntary buy-in of companies. This occurred in 1915, following similar legislation in the US. Next, governments imposed rules concerning collective bargaining in 1935, where it could compel companies to bargain in good faith. This is what led to an extended period of gains for unionized workers and the vaunted creation of the US “middle,” and Canadian, “working” classes respectively.
But as mentioned, with the successes of the unions came anxious times for companies, and the process of corporate lobbying of successive governments began in earnest to reorient government policies more in favour of large companies especially, culminating in the Mulroney government’s passage of the Canada-US Free Trade agreement, albeit begun under the previous Trudeau government. But in addition to this, we witnessed a push towards the downsizing or privatization of Crown Corporations, agencies owned by the people of Canada. The privatization of Petro Canada and Air Canada were the most prominent examples of this. It was no deep dark secret that free trade targeted high union wages and hence unionization itself. And indeed we have seen that the rate of unionization in Canada has fallen by 20 per cent since its implementation, worse with every passing free trade agreement, with more declines in store as a consequence of Trump’s tariffs regime and potentially Carney’s austerity responses.
But with all this in mind, the biggest change in the structure of union-management relations in Canada happened with the emergence of public sector unions. For in this case, the government, previously the third-party intervenor in private sector disputes, was now the employer. A crucial example of how that came to play out occurred in Quebec, following the re-election of the PQ in 1983.
Following on Robert Bourassa’s Liberal government’s generous public sector collective bargaining accords, and in order to maintain unions’ loyalty to the PQ government, the PQ proved itself to be even more generous in its negotiation with the unions, granting them a 20 per cent pay raise prior to the election. However, after being re-elected, it clawed back their wages by 20 per cent leading to the famous Quebec public sector wildcat strike of 1983 wherein 200,000 workers initially went out on an illegal “wildcat” strike.
A wildcat strike is any strike that occurs outside of a collective agreement and out of bounds of the rules and regulations that govern the collective bargaining process, and the times and conditions wherein strikes are permitted under law. This usually requires a period of conciliation, or mediation, followed by a “cooling off period”, and finally an application to strike.
In the case of the QC strike, it was occurring outside of the collective bargaining process because after the workers had accepted the government’s offer, the government itself reneged on its offer which had been bargained collectively. But with the offer in essence being rescinded, its strike action was nevertheless considered illegal and the government legislated the workers back to work with threats of fines and even imprisonment of its labour leaders. And it must be noted that the Supreme Court of Canada declared that the Quebec government, not as the employer, but as the legislator, was fully within its rights to rule them back to work as it was the elected representative of the people of Quebec. Now not all Supreme Court rulings were subsequently against unions and in favour of governments, but this was an example governments would clearly rely upon to avoid bargaining in good faith, then imposing collective agreements.
So an unfortunate pattern emerges because the government, as the employer, can hardly be expected to intervene when the government, as the employer, refuses to bargain in good faith. Indeed it has become a routine that when the parties enter the negotiating process, the government places an absurd offer on the table, when in the course of mediation, that it knows full well the union will reject it out of hand. This followed by protestations that while the government has made a most generous offer, the union refuses to negotiate, this while the government, as employer, absents itself from serious negotiations. Then, typically, the process only commences in earnest when the threat of legal strike action emerges several months down the road. And then, if the parties do not come to an agreement, and a strike ensues, the government, as judge, jury and executioner, has the option to pass back-to-work legislation, frequently characterizing what the union is doing as “holding the population hostage” or declaring that their demands are unreasonable as “the cupboard is bare”.
This strategy, of managing public sentiments into a feedback loop, where pressure is put on unions to settle by negative popular reaction to a prolonged strike, proved very successful over the course of decades, until very recently. With the most recent Quebec public sector strike, we saw for the first time in a very long time that public support for the workers was unusually high, and even the mainstream newspaper, La Presse, suggesting a fair wage settlement that in the end the Quebec government offered and the workers accepted. But this was the result of the simple fact that for once the process of bad faith bargaining, there on the part of the CAQ government, was exposed and clear for all to see. And this became a major reason the government eventually acceded, under public pressure.
Meanwhile back at Air Canada, what’s the bind?
So then how does this all bear on what we saw with the Air Canada wildcat strike in the face of the Canadian government’s imposition of binding arbitration?
In the excellent coverage by the CBC it was pointed out that the federal government invocation of binding arbitration is done in a very arbitrary way that most often favours the employer and threatens the free collective bargaining process itself which the government repeatedly claimed it was interested in defending.
A good example of this highlighted was the fact that the Canadian Union of Postal Workers (CUPW), still at the bargaining table, called for binding arbitration during their dispute with Canada Post. But the government, as employer/third-party intervenor, refused to grant this request. The union’s view was that an arbitrator, in this case, was likely to look at and recognize aspects of their demands that management would refuse to consider. More generally speaking, the imposition of binding arbitration is triggered by a request by the employer and those requests are generally granted if they are deemed “in the public interest.”
In other venues, such as with commercial legal disputes, the parties may select this option, wherein they would have some confidence in the ability of the neutral party to remain neutral. And in sports arbitration, so-called “final offer” arbitration is chosen that encourages the parties to submit their last best offer whereby the arbitrator would be more likely to accept their side of the story than the other side’s.
In the case at hand, we see a pattern of bad faith bargaining on the part of the company, followed by an alleged “impasse” supposedly requiring government intervention and the imposition of binding arbitration. This then led to a wildcat strike followed by considerable public pressure, and an apparent veritable miracle: a quick settlement, after a reported nine hour marathon session, wherein the employer finally returned to the bargaining table and negotiated, under pressure and in good faith and placed an acceptable offer on the table. But the very imposition of binding arbitration in this case must be understood within the “four corners” of the emergence of the role of government as employer.
Finally, privatization
Now in the case of Air Canada, we have the additional fact that the Air Canada strike was prioritized of course because it’s the largest air carrier in Canada. A disruption in its service is exactly the type of situation targeted by the Industrial Disputes Investigation Act of 1906. But Air Canada, we have to recall, was once a Crown Corporation, privatized, allegedly, to save Canadian “taxpayers” money. Yet now here it is, wildly profitable. This we are to ignore. But what we shouldn’t ignore is the reality that Air Canada is treated as if it’s still a Crown Corporation, and the transition from the Canadian government being the third-party intervener, in private sector disputes, is coloured by the fact that when it comes to public sector disputes, the government’s role has been completely transformed. This ambiguity in the case of the Air Canada disruption, has to be a major highlight in attempting to understand such a rapid imposition of binding arbitration and how this seems to have translated into the government of Canada seeing itself as intervenor on the side of Air Canada, a former Crown Corporation.
Arbitrariness and politics in arbitration: The larger picture
Now the arbitrary way in which the government has chosen or not chosen to impose binding arbitration points to another most disturbing aspect this strike situation highlights, and that is the politicized nature of the way in which governments go about deciding on the legitimacy of the negotiating positions of each party.
A former colleague recounted to me an experience he had when he was working for a private sector arbitrator and completed his findings wherein the arbitrator congratulated him on his excellent work but then required the assistant to change only the final line of the judgement. The final line had awarded the union whereas the arbitrator wished to find in favour of management. And the trouble is, in binding arbitration, from a union’s perspective, there can be no guarantee that the positions that the sides would take and hammer out at the table would be accounted for as precisely by an arbitrator. Indeed, many labour arbitrators come from management firms, as labour lawyers, and their tendency might be to favour the management side. And unions, recognizing this risk, might then decline an offer for binding arbitration, just as Canada Post declined the request for arbitration when it believed its interests would not be served by appointing one.
Now in this case, the Canadian Labour Relations Board wisely did not take action against the flight attendants for their wildcat strike and force the workers to leave the picket line and return to work. But while all this should point back to the assertion by the union that their right to strike is guaranteed in the constitution, its current guarantees seem increasingly tentative insofar as governments can decide that they will respect such a guarantee, or not. In fact we see in the US that the current President is attempting to abolish their National Labor Relations Board. So its very constitutionality and collective bargaining itself, is under dispute.
So in sum, we are in great need of rethinking our system of third-party intervention in light of this great transformation in labour-management relations, wherein the government is now our greatest employer and is too often not held to account when it violates the spirit of the laws it enacted when they applied to private sector. Thereby, a system of intervention, entirely independent, as it was originally conceived to be, is desperately required – a rethinking, a re-jigging of the entire system so that the employer, regardless of whether it is in the public sector or in the private sector, is held to the same rules and standards that the government in the past insisted that private sector employers were.
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