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4.4 The Bargaining Process

See also: The Changing Workplaces Review

4.4.1 Replacement Workers

Background

The term “replacement workers” is typically understood to refer to workers hired to fulfill some or all of the functions of workers who are either engaged in a legal strike or who have been locked out by the employer.

In Ontario, the Labour Relations Act, 1995 (LRA), except from 1993 to 1995, has not prohibited the use of replacement workers by employers during a lawful strike or lock-out; the Act does not place any restrictions on this ability.

The vast majority (over 95%) of negotiations for a new or for a renewal collective agreement are resolved without a strike by employees or a lock-out by the employer. In addition, replacement workers are used by employers in a small minority of those labour disputes where a strike or lock-out occurs. However, it is generally accepted by labour relations experts that using replacement workers adversely affects the progress of collective bargaining and can prolong labour disputes. The use of replacement workers has been contentious in some recent labour disputes.

The use of replacement workers does not disentitle an employee who is engaged in a lawful strike from making an unconditional application to the employer to return to work within six months from the start of the lawful strike. The employer is required to reinstate such an employee in the employee’s former employment on terms that the employer and employee may agree upon. The employer is prohibited from discriminating against the employee for exercising or having exercised any rights under the LRA.

Other Jurisdictions

The use of replacement workers during a legal strike is prohibited only in British Columbia and Quebec. No other jurisdictions in Canada prohibit the use of replacement workers during the course of a legal strike. The Canada Labour Code, while not prohibiting the use of replacement workers, provides that employers cannot use replacement workers for the “purpose of undermining a trade union’s representational capacity rather than the pursuit of legitimate bargaining objectives.”

Submissions

Unions generally strongly support a legislative ban on the use of replacement workers. When employees engage in a strike, a picket line is a physical assertion of the strikers’ position that employees or others should not cross the picket line and work or do business with the struck employer.

The picket line serves as an expression of one of the core union values of solidarity with the strikers. When replacement workers are called in to perform the work of the bargaining unit, it is seen as fundamentally threatening the success of the strike and as a repudiation of the request for solidarity represented by the picket line. This can provoke heated interactions. In light of recent jurisprudence on freedom of association, the use of replacement workers is now also seen by unions as an inappropriate interference with the constitutional right to strike. Labour groups also argue that the use of replacement workers increases the risk of violence on picket lines, prolongs the duration of strikes and undermines the integrity of the collective bargaining process.

Employer organizations very strongly oppose a legislative ban on the use of replacement workers. Small- and medium-sized employers, in particular, assert that being able to operate during a strike is necessary to protect the viability of the enterprise, and that keeping the business going during a strike protects the jobs of striking employees. Employers argue that sometimes they have no choice but to keep operating if faced with a strike and with what they perceive to be unreasonable bargaining demands by a union.

The ability to use replacement workers is seen as a necessary counterbalance to the actual or possible imposition of economic sanctions by the union. The right to operate during a strike, using replacement workers if necessary, is seen by the employer community as a core component of the industrial relations system in Ontario.

Options:

  1. Maintain the status quo.
  2. Reintroduce a general prohibition on the use of replacement workers.
  3. Adopt an approach similar to the Canada Labour Code, whereby the use of replacement workers would not be prohibited except if used for the “purpose of undermining a trade union’s representational capacity.”

4.4.2 Right of Striking Employees to Return to Work

Submissions have been made to the Special Advisors in support of making a change in two circumstances:

  1. where an employee who is engaged in a legal strike makes an application to return to work after the expiration of the six-month period from the beginning of the strike; and
  2. where the employer refuses to reinstate an employee at the end of a labour dispute and the refusal to reinstate is not an unfair labour practice.

We deal with these two points separately.

4.4.2.1 Application to Return to Work After Six Months From the Beginning of a Legal Strike

Background

The LRA provides, subject to certain conditions, that an employee engaging in a legal strike may make an unconditional application to return to work within six months of the commencement of the strike. If the employee does apply to return to work, the employer is required to reinstate the employee in the employee’s former employment on such terms as the employer and employee may agree upon and the employer, in offering terms of employment, is prohibited from discriminating against the employee for exercising or having exercised any rights under the LRA. Practically, this means that the employee cannot be discriminated against by the employer for striking, engaging in lawful picketing activity or being engaged in any other union activities during a legal strike. The employer is not obligated to reinstate a striking employee if the employer no longer has persons engaged in work that is the same or similar to that which the employee performed before the strike, or where there has been a suspension or discontinuance for cause of an employer’s operations or any part of the operations.

If the employer resumes operations, the employer is required to reinstate the employees who have made an application within the six-month period.

Striking employees who make an application to return to work typically do so when they conclude that the strike in which they are engaged is not likely to settle or where there is no end in sight. This most often occurs when an employer continues to operate during the course of a legal strike by using replacement workers. Simply put, employees may conclude that they are unlikely to have an opportunity to return to work unless they make an application within the six-month period.

Other Jurisdictions

Legislation in the federal jurisdiction, Alberta, Manitoba, Ontario, Prince Edward Island, Quebec and Saskatchewan include provisions dealing with the reinstatement of employees following a work stoppage.

Similar to the LRA in Ontario, legislation in Alberta and Prince Edward Island provides that employers are not required to reinstate employees in circumstances where:

  • the employer no longer has persons engaged in performing the same or similar work that the employee performed prior to the work stoppage; or
  • the employer’s operations or some part of them, have been suspended or discontinued (but if the employer resumes such operations, the employer will reinstate those employees who wish to return to their jobs).

Legislation in Manitoba and Saskatchewan requires that seniority be considered in reinstatement protocols in circumstances where no agreement respecting the reinstatement of employees is reached between the employer and the union.

The federal, Quebec and Prince Edward Island legislation also specifically gives striking employees priority over replacement workers hired during the strike.

Ontario is the only jurisdiction that mandates a time period within which a striking employee must make an application to return to work during the currency of a strike.

Submissions

We have heard submissions from unions that the six-month period should be removed from the current legislation. Elimination of the six-month period would allow a striking employee to make an application to return to work at any time during the currency of a legal strike. Unions submit that the six-month limitation on a striking employee’s right to return to work undermines the effectiveness of a legal strike and may provide an incentive to employers to lengthen the strike. The right to strike is embodied in section 2(d) of the Charter, which also protects the workers’ right to collective bargaining. Unions assert that workers should not be threatened with job loss for exercising their constitutional right to strike and that section 80 of the LRA effectively operates as a restriction on this fundamental constitutional right by capping the right of reinstatement at six months.

No employer group raised this issue in their written submissions to the Changing Workplaces Review.

Options:

  1. Maintain the status quo.
  2. Remove the six-month time reference in the current LRA section but leave the provision otherwise the same.

4.4.2.2 Refusal of Employers to Reinstate Employees Following a Legal Strike or Lock-out

Background

A very contentious issue regarding the efforts to settle a labour dispute can be the refusal by the employer to reinstate certain employees. Often the refusal to reinstate is based on alleged misconduct on the picket line or other misconduct by the employee, related to the labour dispute.

Since no collective agreement is in operation during a legal strike and or lock-out, employees whom the employer wishes to terminate, or who have been terminated because of alleged misconduct during the strike and or lock-out, have no access to a grievance and arbitration procedure. When employers refuse to reinstate employees for strike-related misconduct and refuse to submit these disputes to arbitration, such as, in situations where just cause for termination is disputed by the union, this often creates a problem that is very difficult to resolve. There are often disputed facts and disagreement about whether cause for termination or other discipline exists. Typically, unions are not prepared to agree to the settlement of a labour dispute where the employer refuses to reinstate some employees and where just cause for termination is in dispute. Disagreement about reinstatement of employees may prolong a labour dispute even though the parties have agreed on all terms of a collective agreement.

Other Jurisdictions

In Manitoba, the law requires the employer, at the conclusion of a strike or lock-out, to reinstate employees in accordance with the agreement reached between the union and the employer or, where no agreement is reached, in accordance with the seniority of the employee at the time the strike or lock-out commenced. The refusal to reinstate an employee is an unfair labour practice unless the Labour Board is satisfied that the employer refused to reinstate the employee because the employee’s strike- or lock-out-related conduct resulted in a conviction for an offence under the Criminal Code (Canada) and, in the opinion of the Board, would be considered just cause for dismissal of the employee even in the context of a strike or lock-out.

In Saskatchewan, the legislation provides that striking employees are entitled to replace replacement workers at the conclusion of the labour dispute and it provides for a return-to-work protocol in the event that the union and the employer are unable to agree. The Saskatchewan legislation also provides for arbitration of the discipline or discharge of any employee when there is no collective bargaining agreement in force after certification of the union. Since a refusal to reinstate is tantamount to a discharge, employees who are refused reinstatement have protection against unjust dismissal through arbitration.

In British Columbia, striking or locked out employees who are terminated or disciplined by the employer for activities during a strike or lock-out have access to arbitration in order to determine whether the termination or other discipline is for just cause.

Submissions

Unions submit that in the absence of an unfair labour practice, the LRA does not provide sufficient recourse for an employee whom the employer refuses to reinstate at the conclusion of a labour dispute. Generally, unions feel their members should not be vulnerable to unilateral decision-making by an employer based on alleged misconduct during a labour dispute. While it is not disputed that some misconduct may warrant termination, unions do not want to leave the decision about what is cause for dismissal to the employer, without any capacity to have that decision reviewed by a neutral third-party adjudicator. Quite apart from alleged misconduct on the picket line, unions assert that an employer should not be allowed to use a strike or a lock-out as an opportunity to “clean house” by refusing to reinstate employees it unilaterally decides should not return to the workplace.

At least one union has suggested that Ontario adopt an approach similar to that of Manitoba or Saskatchewan, both of which provide protection for employees whom the employer refuses to reinstate during the course of a legal strike.

No employer group raised this issue in their written submissions to the Changing Workplaces Review. We expect that employers generally would oppose broader legislative reinstatement provisions proposed by labour stakeholders because:

  • the LRA protects employees who exercise their legal right to strike from reprisals by the employer; and
  • the OLRB is in the best position to determine whether a refusal to reinstate an employee, based on alleged misconduct during the labour dispute, is an unfair labour practice.

Options:

  1. Maintain the status quo.
  2. Provide for arbitration:
    1. of any discipline or termination of an employee by an employer during the course of a legal strike or lock-out; or
    2. of the refusal to reinstate an employee at the conclusion of a strike or lock-out.
  3. As in Manitoba, provide that the refusal to reinstate an employee at the conclusion of a legal strike or lock-out is an unfair labour practice, unless the refusal was because the employee’s conduct:
    1. was related to the strike or lock-out;
    2. resulted in a conviction for an offence under the Criminal Code (Canada); and
    3. would, in the opinion of the OLRB, be just cause for dismissal of the employee even in the context of a strike or lock-out.
  4. Adopt an approach similar to the LRA, as it was in 1993 to 1995, providing that at the end of a strike or lock-out:
    1. the employer is required to reinstate each striking employee to the position he or she held when the strike began;
    2. striking employees generally have a right to displace anyone who performed the work during the strike; and
    3. if there is insufficient work, the employer is required to reinstate employees as work becomes available, based on seniority.

4.4.3 Renewal Agreement Arbitration

Background

Unions and employers may, at any time following notice to bargain, agree to refer all matters remaining in dispute between them to interest arbitration. Voluntary interest arbitration is always available to the parties in any collective bargaining dispute, whether for a first collective agreement or for a renewal collective agreement.

The LRA currently provides that either party negotiating a first collective agreement may apply to the OLRB to direct the settlement or have the collective agreement settled through binding interest arbitration. The OLRB will direct settlement if the applicant can establish that collective bargaining has been unsuccessful for the reasons enumerated in the LRA.

The LRA does not allow a party to apply to the OLRB for the referral of a collective bargaining dispute to binding interest arbitration when the party is in the process of collective bargaining in relation to a renewal collective agreement.

Other Jurisdictions

Under Manitoba’s Labour Relations Act, where a collective agreement has expired, and a strike or lock-out has commenced, either the employer or the union may bring an application requesting the Manitoba Labour Board to direct the settlement of the collective agreement by means of interest arbitration. The legislation sets out a number of conditions that must be met before an application can be made:

  • the previous collective agreement must have expired;
  • sixty days must have elapsed since the commencement of a strike or lock-out; and
  • the parties have had the assistance of a conciliation officer or mediator for at least thirty days during that period of the strike or lock-out.

On receiving an application for subsequent renewal interest arbitration, the labour board is required to determine whether the parties are bargaining in good faith and whether they are likely to conclude a collective agreement within thirty days of continued bargaining. The labour board can delay its decision until it is satisfied that the party making the application has bargained sufficiently with respect to those provisions of the collective agreement that are in dispute.

If the board is satisfied that the parties are bargaining in good faith and are likely to conclude a collective agreement within thirty days, arbitration will not be ordered and the board may appoint a board representative, or request the minister to appoint a conciliation officer, to confer with the parties to assist them in settling the provisions of a collective agreement.

If the board determines that the party making an application is bargaining in good faith but that a new collective agreement is unlikely to be concluded within thirty days of continued bargaining, the strike or lock-out must end immediately and the terms of the collective agreement will be settled by an arbitrator or by the board. These provisions, enacted in 2000, have rarely been used.

In British Columbia, while there is no statutory provision for the referral of a dispute to interest arbitration to resolve terms and conditions of a renewal collective agreement, the Labour Relations Code provides for a “mediation intensive” model for the resolution of collective bargaining disputes. Under this model, mediators, special mediators and fact-finders may be appointed to confer with the parties to assist them in concluding a collective agreement. If either party requests, or if the Minister directs, a mediation officer must provide a report, which may include recommended terms of settlement. If a fact-finder is appointed, the fact-finder may report to the associate chair, setting out the matters agreed to and the matters remaining in dispute and may also include in the report, findings with respect to any matter relevant to the making of a collective agreement. The associate chair may make the report public if it is considered advisable to do so.

Submissions

Some unions have advocated amending the LRA to provide for interest arbitration in the case of bargaining for renewal collective agreements. Unions submit that even mature bargaining relationships can result in intractable disputes, resulting in lengthy strikes or lock-outs, and high human and financial costs to both sides. They argue that arbitration should be available in cases of lengthy strikes or lock-outs (e.g., perhaps six months’ long). At least one union, pointing to experience under the Manitoba model, observed that the availability of interest arbitration after a significant period of strike or lock-out appears neither to encourage long disputes in order to get access to interest arbitration nor to create a disincentive to negotiating a settlement.

Employers generally oppose interest arbitration as a dispute resolution mechanism in collective bargaining, whether for a first contract or for a renewal collective bargaining agreement.

Employers believe that a third-party arbitrator cannot be expected to understand the business and operational needs and interests of the enterprise and are not in a position to make decisions that could have a significant impact on the on-going competitiveness and viability of the business. Arbitrators cannot be expected to be knowledgeable about competitive market demands and the impact of globalization, technology and other factors that may impact employer decision-making. Arbitrators have no responsibility for, and no stake in, the success of the business.

The parties to the collective bargaining dispute, namely, the union and the employer, are, or should be, the most knowledgeable when it comes to protecting their interests and balancing them with the interests of the other party. Disagreements should not be resolved in arbitration, which is a trial-like, adversarial environment, but should be the product of good faith bargaining by both parties even if economic sanctions are imposed on one side or the other for a long time. The employer and the union should have the ultimate responsibility for making a workable collective agreement that takes into account the legitimate interests of both parties.

Employers assert that collective bargaining disputes should be resolved at the bargaining table by the parties unless they voluntarily agree to have some or all disputed matters resolved by a third-party.

Options:

  1. Maintain the status quo.
  2. As in Manitoba, provide for access to arbitration after a specified time following the commencement of a strike or lock-out provided that:
    1. certain conciliation and/or mediation steps have been followed;
    2. the applicant for interest arbitration has bargained in good faith; and
    3. it appears that the parties are unlikely to reach a settlement.
  3. Empower the OLRB to order interest arbitration as a remedy following a finding of bargaining in bad faith after the commencement of a strike or lock-out, provided that:
    1. certain conciliation and/or mediation steps have been followed;
    2. the applicant for interest arbitration has bargained in good faith; and
    3. it appears that the parties are unlikely to reach a settlement.
  4. As in British Columbia, provide for a mediation-intensive dispute resolution process which does not involve interest arbitration or mediation/arbitration, unless agreed to by the parties, but does provide a number of tools to facilitate dispute resolution, including the making of recommendations by a mediator or fact finder.

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