The traditional relationship between unions and employers is changing rapidly, and Canadian workplaces are going to have to adapt or perish, according to labour and employment lawyers.
For both the private and public sectors, the global economic downturn has made collective “power bargaining” somewhat obsolete, and unions and employers need to co-operate to preserve companies, according to Harvey Beresford, a labour and employment lawyer with Hicks Morley Hamilton Stewart Storie LLP.
“The future is a hard future because in most cases it will require both management and labour to change from the pathway they’ve been on,” he said.
“The sense of entitlement we’ve all operated on for a period of time is under a lot of examination and a lot of change.”
Beresford was speaking at the Ontario Bar Association Institute conference in Toronto last week.
The recession and the shortage of capital have forced many Canadian sectors to look elsewhere for an infusion of resources. As a result, global competition is fundamentally changing the employment relationship, panellists said.
Beresford cited Stelco Inc., Inco Ltd., and Algoma Steel Inc. as examples of Canadian giants now surviving by having raised external capital.
At the same time, union membership is declining, and new certifications in the private sector are few, he added.
Applying traditional collective-bargaining approaches to smaller organizations or units owned by larger global companies will result in more plant closures and centralization, he explained.
In the public sector, Beresford predicted even more conflict and crisis. “You have tremendous economic pressure being placed on municipal corporations without a very easy ability to raise additional funds.”
As well, he said clinging to the old methods would only make it more difficult to sustain the basic union model.
At the same time, Beresford said union representatives must continue to be tough to prevent employers from using financial hardship as an opportunity to wrest labour concessions.
“The recession has been used by employers to try to gain a power conversation and, in some cases, arguably inappropriately. And that’s not a sustainable approach either.”
Other panellists, however, noted some companies that were unable to win concessions from unions were forced to close plants.
But out of the recession, Beresford foresees some sustainable changes to collective bargaining that will continue through the ultimate recovery.
Union representatives must make greater efforts to understand the business, he said.
“Employers, if they’re smart, will want the unions to know the business a lot better so the conversations they have are based on fact, based on data, based on understanding rather than who’s the biggest dog in the backyard.”
In addition, he called the recession “the great focuser” that’s prompting employers to put more emphasis on productivity and the effective use of information technology.
The recession produced a number of other workplace trends over the last year, indicating the employment relationship was becoming more flexible in recognition of extenuating financial circumstances, said Jules Bloch, a Toronto mediator and arbitrator.
He noted, for example, that unions and employers have been jointly trying to figure out ways to save companies, including inventive approaches to pension plans.
“Part of the game in a recession is keeping people afloat until post recession.”
Stuart Rudner, an employmentlawyer with Miller Thomson LLP, indicated that notice periods for terminations declined markedly over the course of the recession.
“Employers tended to be offering less,” he said. “And employees were accepting less.”
A lack of litigation over notice periods may be due to the fear that the company wouldn’t survive long enough or that the company’s finances were too dire to make a lawsuit viable, Rudner speculated.
“Now that we’re starting to see the recession coming to an end, we’ll see that probably level off once again,” he said.
Rudner also pointed to a unique approach to salary and benefit continuances used to compensate employees until they land new jobs.
Whereas traditionally employees would be required to report when they find work, a different approach is to have them confirm they are out of work in order to continue to receive their salaries.
“It’s a lot easier for someone to forget to call and tell me they have a new job than it is for them to actually call and lie about it,” Rudner said.
The recession has also seen a scarcity of constructive dismissal claims, a further indication that employees were less willing to pursue litigation with employers, said Barry Prentice, a lawyer with Blaney McMurtry LLP.
“I’ve experienced employees accepting far greater changes to their employment relationship in the last 18 months to two years than they ever would have three or four years ago,” Prentice said.
Employees appeared to be willing to accept changes to the terms of their employment in recognition that employers needed to be able to reorganize, he explained.
“I think it comes down to a case of economic necessity. From an employer’s point of view, they have to make changes in order to survive.”
A lack of job alternatives may also have prompted employees to endure significant changes to their jobs whereas previously they may have alleged constructive dismissal, left their posts, and filed for damages, Prentice said.