See also: The Changing Workplaces Review
Many commentators have criticized the current industrial relations model set out in the Labour Relations Act, 1995 (LRA) and administered through policies established by the OLRB. It is said that the current system, based on the 1940s United States Wagner Act model, is unable to respond to the modern labour market, characterized by growing employment in small workplaces and non-standard work. It is said that the Wagner Act model limits access to collective bargaining to many thousands of workers because there is no practical way for collective bargaining to operate in much of the present economy. This is seen to affect vulnerable workers in precarious work, especially in industries where such workers feature prominently, such as in restaurants (particularly fast-food), accommodation, retail, and other service industries. While this is generally seen as a private sector problem, it is said to also to occur in the public sector (e.g., in home care).
“Broader-based bargaining” (also referred to as “sectoral bargaining”) is advocated as a necessary alternative or addition to the old industrial relations model. However, detailed recommendations for new bargaining structures are often not spelled out and the application and boundaries of the concept have remained ill-defined.
Generally, labour relations in Canada are highly decentralized. While broader-based bargaining arrangements are the exception, they have nonetheless featured prominently in the past in some areas, with either formal centralized bargaining or pattern bargaining. However, the default arrangement in our system is for collective bargaining to take place between a union representing a group of employees at a particular workplace and their employer, particularly in the private sector (with the exception of the construction industry, as noted below).
The LRA vests the OLRB with the discretion to determine the appropriate bargaining unit with respect to each application for certification. The most common bargaining unit definition comprises a single workplace of a specific employer at a geographic location. There may be further subdivisions (e.g., separate bargaining units for “office” and “plant” employees).
Unions assert that bargaining separate individual agreements with many small employers, or separate agreements for each small location of a larger employer, is inefficient, uneconomic and burdensome. The costs of organizing (including costs of legal proceedings) and representing small units one-by-one are too high and effectively deter organization.
In the context of the Wagner Act model, workers have found it difficult to organize into unions in sectors characterized by small workplaces (typically also associated with high rates of part-time, temporary and contract jobs). The union coverage rate in the private sector is approximately 24% among workplaces with more than 500 employees, but below 7% in workplaces with fewer than 20 employees.
Moreover, unions recognize that there is a difficult trade-off in arguing for broader bargaining units. Narrower units (e.g., individual stores in a retail chain) are easier to organize, but have little bargaining power. Broader units (e.g., all of the stores in a retail chain) will have greater bargaining leverage, but may be difficult to organize. The OLRB has recognized the dilemma of organizing smaller units and the need for flexibility in organizing and certifying “an appropriate bargaining unit” (as opposed to the most appropriate bargaining unit), particularly in industries where there is little history of organization. The dimensions of this issue are also discussed in section 4.3.4, on Consolidation of Bargaining Units.
Under the existing law, and outside the construction industry, more centralized bargaining relationships (i.e., multi-employer bargaining) cannot be imposed by either side or by the OLRB, but can be established only by agreement between each participating employer and each participating bargaining agent. This kind of sectoral bargaining has taken place in some industries such as printing, nursing homes, and hospitals. However, it is not the norm.
Even in unionized parts of the private sector economy, collective bargaining has become more decentralized. There has been a general shift away from pattern or central bargaining in various industries towards bargaining at the enterprise level. This is an international trend, and appears to be linked to a decline in union bargaining power and an emphasis on the ability of individual enterprises to pay.
There are, various models for broader or sector-wide bargaining in Canada.
In the construction industry, for example, reforms of the industrial relations system came at the request of employers to counter strong unions that were seen as engaging in bargaining tactics known as “whipsawing” and “leapfrogging” to advance pay and benefits. In this context, a multitude of employers with weak bargaining power as individual companies sought structural industrial relations relief to permit them to band together and force the union to bargain with one employer entity.
Multi-employer bargaining along trade lines has existed under Ontario’s labour relations legislation for the construction industry since the 1970s and on a compulsory basis in the industrial, commercial and institutional (ICI) sector since 1977. The accreditation and province-wide bargaining provisions in the ICI sector were employer initiatives designed to equalize bargaining power with then-stronger unions. Unlike the general approach under the LRA, construction industry certificates include all of the operations of a single employer in either the province and/or geographic areas set by the OLRB in construction industry certification cases (“Board Area”).
In the case of the ICI sector of the construction industry, the LRA imposes a system of single-trade, multi-employer, province-wide bargaining. The Minister of Labour designates employee bargaining agents and employer bargaining agents (representing all unionized employers in the province with respect to a single trade). There can be only one provincial agreement between these parties (bargaining outside the designated structures is prohibited). All provincial agreements have a common duration and a common expiry date. When a new bargaining unit is certified for a non-union employer, the parties automatically become bound to the provincial agreement.
The accreditation of a multi-employer bargaining agency is designed to offset the power of the unions and compel a union in a sector to bargain with the single employer bargaining agency rather than individual employers.
The federal Status of the Artist Act (SAA) provides another example of sectoral or multi-employer approaches to collective employee representation and bargaining. The SAA permits a broad array of professional artists in the federally regulated cultural sector to form associations and bargain collectively with the producers who engage their services. It allows for the certification of artists’ associations that meet certain criteria, in sectors within this industry that are considered suitable for bargaining. It is not necessary for an artists’ association to provide proof that it represents more than 50% of artists working in a given sector (recognizing that it is often difficult or impossible to determine the exact size of the sector).
In addition, the SAA allows for the creation of producers’ associations for bargaining with artists’ associations. Certification gives an artists’ association the exclusive authority to bargain a scale agreement on behalf of the artists in the sector.
Scale agreements are different from other collective agreements in that they establish only the minimum terms and conditions of engagement. Private negotiations between employees and employers for terms and conditions above and beyond scale agreements are permitted. This reflects the unique situation of the cultural industry, including the varying talent levels of individuals in the broadcasting industry. It appears that this practice has generally worked well in other sectors, such as in the areas of sports and entertainment.
The SAA model holds the potential to extend collective bargaining to types of workers who may not conventionally be thought of as “employees”. It aims to create a safety net for the majority of working artists while not depriving artists of the ability to bargain better terms. A weakness of the legislation is that producers are not required to form associations for bargaining, potentially leaving artists’ associations with no sector-wide group with which to bargain. Only producers bound to the agreement are subject to the terms and conditions established by scale agreements, and there is no process for binding a producer not voluntarily bound to the scale agreement.
Primarily as a result of the artists’ and performers’ need or desire to have independent contractor status for tax purposes, the performers are presumed not to be employees under the LRA and, therefore, the sector is not governed by the Act. As such, the agreements appear to fall outside the scope of the LRA. If there is no provision for binding individual producers to a scale agreement, and if the LRA does not apply, a producer who is not a party to an agreement cannot be compelled to negotiate with the association or sign the scale or other agreement.
Another approach, common in Europe but generally absent in North America (except for the decree system in Quebec, which is much smaller in its application today than previously), is to institute a system by which certain terms (negotiated through a collective agreement or at a sectoral table) can be extended by decree to cover all workers, both union and non-union, within a specific sector. An example of this approach is Ontario’s Industrial Standards Act (ISA), which was introduced in 1935 and repealed in 2000.
The ISA provided a mechanism for establishing a schedule of wages and working conditions that was binding on all employers and employees in a particular industry across a given geographical zone. Employers or employees in a particular industry could petition the Minister of Labour to call a conference of employers and employees in that industry, for the purposes of negotiating a schedule of minimum standards, including wages, hours of work, holiday pay, and overtime. The schedule would be submitted to the Minister, who could approve it if it had been agreed to by a “proper and sufficient representation of employers and employees.” An approved schedule would be made as a regulation and would be binding across the entire industrial sector.
The ISA largely fell into disuse after the ESA was introduced in 1968. By 2000, when it was repealed, there were only two ISA schedules remaining, covering subsectors within the garment industry in Toronto.
Over the years, various proposals have come forward in relation to the concept of broader based bargaining. One that is frequently cited is a proposal put forward by a majority of special advisors appointed by the British Columbia government in 1992 to review the province’s Industrial Relations Act. In its report, a majority of the sub-committee endorsed the introduction of a form of sectoral certification for “those small enterprises where employees have been historically underrepresented by trade unions”.
The sectoral certification model proposed in British Columbia would be available only in sectors that were determined by the Labour Relations Board to be historically underrepresented by unions and where the average number of employees at work locations within the sector was fewer than 50. To determine whether a sector met these criteria, the Labour Relations Board would be required to hold public hearings and accept submissions not only from the parties but other employers and unions within the sector.
Sectors under this model would be defined by two characteristics – geographical area and similar enterprises – with employees performing similar tasks within that geographic area. For example, a sector could comprise “employees working in fast food outlets” in a city.
The recommendation stated that a union with the requisite support (e.g., 45% of employees) at more than one work location within a sector could apply for certification of the employees at those locations. To be certified, the union would have to establish majority support at each location and, in a representation vote, win majority support among all employees at the work locations where certification was being sought.
Once the union obtained a sectoral certificate under the British Columbia model, collective bargaining would take place between the union and the various employers subject to the certificate. A standard agreement would be worked out and, subsequently, if the union could demonstrate sufficient support at additional locations within the sector, it would be entitled to a variance of its bargaining certificate to encompass the new employees. Although the standard agreement would then apply to the new employees, the Labour Relations Board would have the option of tailoring this agreement to the exigencies of any particular location. Once a sector had been declared “historically underrepresented,” any union would be able to apply for certification within the sector. The authors of the proposal point out that under their model, three or four different unions could end up representing employees within a sector or geographic area, each administering its own collective agreement. No union would have a “monopoly” on representation rights within a sector.
The management representative on the committee opposed this recommendation and the proposal was not adopted by the British Columbia government.
It is argued that the LRA is not only irrelevant for a very large number of employees, but also that if it does not provide for meaningful opportunities for collective bargaining for large groups of employees because of structural difficulties, then the Charter of Rights’ guarantee of freedom of association has little practical meaning for many.
It is also argued that sectoral arrangements, like those in the construction and arts sectors, are intended to – and in some respects do – address the undesirable features of unstable employment and temporary work that feature prominently in the construction and arts sectors.
It is further argued that, not only does sectoral bargaining provide a more balanced framework for employers and employees, but also, multi-employer arrangements have generated training and benefit structures that have improved the skills of employees, and provided pension, health, welfare and other benefits that are hallmarks of “good jobs.” For example, single-employer pension plans have become increasingly rare in the private sector but fixed-cost multi-employer pension arrangements are available to construction sector employers and employees and are an important source of investment capital in Ontario.
Also, it is argued that multi-employer bargaining in lower wage industries – like nursing homes – have provided benefit and pension plans to those employees, which could not have been possible in the context of single employers dealing with a single local union.
Some academics and unions have recommended the opening of new opportunities for broader-based bargaining. Some urged that the British Columbia proposal be adopted in some form. As discussed above, the British Columbia special advisor proposal was one in which unions could organize some parts of a sector, and then add to the certification over time, with a single master agreement applying to individual employers and bargaining units. The proposal also accommodated multiple unions.
Another option for sectoral bargaining is a model which permits an application for certification for bargaining rights for multiple employers in an entire sector, defined by industry and geography, in which multi-employer bargaining would take place with a union or council of unions and a designated employer bargaining agency in a sector. In this scenario, the collective agreement would apply to the entire sector. Some possible features of this option are discussed below.
Another proposal is to expand the application of negotiated provisions in a sector through employment standards legislation at the sectoral level and pursuant to a complex system of sectoral agreements and councils. This would essentially provide the OLRB with authority to prescribe certain minimum terms and conditions of employment within an entire sector, but with significant employer and employee input.
Other specific proposals were made regarding franchise operations and the creation of geographic and industry sector-wide bargaining for the operations of a particular franchisor, consisting of both the franchisor and its franchisees. As discussed in section 4.2.2, Related and Joint Employers, the identification of the appropriate employer is a long standing issue in labour relations law. As also noted in that section, the National Labor Relations Board has, in a recent decision, updated its approach to this issue finding that, in certain situations, two or more entities may be joint employers of a common workplace.
There was also a specific proposal to allow for the certification of multi-employer bargaining units in a sector based upon sectoral standard provisions that the OLRB has prescribed. Interested parties may wish to review these proposals.
A number of organizations, active in representing artists and performers, asked to have their scale agreements, described above, protected under the LRA, and for the ability to compel producers to bargain with them. A union seeking to represent freelancers with multiple producers in the television industry, particularly in the production of reality TV, asked for a sectoral bargaining structure for that sector.
Employers generally did not raise the issue of broader-based bargaining during our consultations. They may be wary of losing autonomy by having to bargain through a multi-employer bargaining agent. However, it is noteworthy that the multi-employer model in construction came at the instance of employers wishing to provide a counterweight to strong unions and, as noted above, to avoid the problem of unions constantly “whipsawing” and “leapfrogging” employers, which could otherwise happen in a single-employer collective bargaining regime. Put simply, employers in the construction sector who do business in a very competitive market and whose product, or a similar one, can be purchased from numerous contractors at the same or similar price, felt vulnerable in a single-employer collective bargaining regime. Multi-employer bargaining was seen as providing the best chance for creating a level playing field for all unionized employers in the sector.
In this regard, a model has been discussed that would primarily serve employer interests in industries where unions or multiple unions refuse to bargain on a sectoral basis and, instead, insist on bargaining with individual employers. This model would permit an application by an employers’ organization to accredit an employer bargaining agency along the same general lines as in the construction industry, and require that a union, or council of unions, bargain with the employer bargaining agency instead of individual employers.
Any model that would significantly expand the scope of sectoral collective bargaining to franchisors and franchisees, or multi-employer bargaining, both of which involve different employers bargaining together at the same table, will interest the employer community. Based on the employer reaction to proposals for sectoral bargaining in British Columbia, it is anticipated that the employer community will express a preference for enterprise-based bargaining, because of its concern that the needs and realities of specific enterprises will not be reflected adequately in a sectoral bargaining process.
Employers in British Columbia argued that the application of collective agreements, negotiated by others, on a newly certified employer is inconsistent with sound business and economic practices and deprives employers and employees of the necessary control over their own workplaces. In their view, only enterprise-based collective bargaining ensures a focus by both parties on the needs and circumstances of individual businesses. One British Columbia employer submission put it this way:
We have been asked to consider a number of broader-based bargaining models and – as with other options set out in this report – have not yet decided which, if any, to recommend. We have not listed these in order of importance, nor does the order reflect that we are considering some more carefully than others.
Option 2 can be called an extension model, where negotiated provisions are extended to an entire sector but are, perhaps, limited geographically, akin to models in Quebec or in Europe or in the old ISA framework in Ontario. We have been provided with a very detailed proposal in this regard, which we do not set out but to which interested parties can refer.
Option 3 deals with single franchisor/franchisee and single-employer, multi-location certification and bargaining. It contemplates a location-by-location approach to certification and a broad, multi-location approach to bargaining.
Options 4 and 5 deal with multi-employer, multi-location certification and bargaining but, whereas the acquisition of bargaining rights in 4 is incremental, the acquisition of bargaining rights in 5 is with respect to an entire sector.
Option 4, based on the British Columbia proposal, contemplates single-employer, location-by-location, certification and multi-employer sectoral bargaining. Because it was the subject of a specific detailed proposal in British Columbia and was the subject of much debate in British Columbia, we saw no need to model it in greater detail.
Option 5 is a new idea for the acquisition of bargaining rights at one time for an entire sector and geographical area, followed by multi-employer bargaining across the entire sector. Since it was a new idea, we felt it was wise to try to model it in detail, to see if it was practical and also so that it could be evaluated. This accounts for the extensive detail regarding this option, below.
Options 3, 4 and 5 are not mutually exclusive in the sense that only one would necessarily be recommended. All three models could be applied generally or they could be limited only to particular industries and sectors where collective bargaining has not taken root and/or where there are a large number of vulnerable workers and precarious jobs. All or none could be recommended and all three could co-exist under the LRA.
Option 6 is a new idea to support employer interests in broader bargaining structures where these might exist. Since it is modeled on an existing accreditation model in the construction industry, where there is already a wholly formed legislative scheme, we felt no need to model it in detail.
Option 7 addresses specific situations involving vulnerable workers in precarious jobs where it is not clear if collective bargaining, as currently structured, works effectively (e.g., home care), or how it could or would work if existing exemptions were eliminated (e.g., domestic, agriculture, and horticulture workers).
Option 8 considers the appropriateness and practicability of applying the artist-type model to freelancers and dependent contractors.
Option 9 considers dealing with the media industry and the groups affected by the Status of the Artist Act in separate provisions of the LRA that would apply exclusively to them; these could address the issues and difficulties described above.
The following could be the technical details.
As recognized in our discussion of the Guiding Principles, Values and Objectives for this Review, work is a fundamental aspect of our lives. It is natural for everyone to want to participate in and to influence his or her working environment. As noted in the “Guide to Consultations” paper, voice, together with efficiency and equity is one of the objectives of the employment relationship. By voice, we mean the right to participate in decision-making in some dimension, be it through the right to speak, or to be consulted, or to vote, because “participation in decision making is an end in itself for rational human beings in a democratic society.”
Underpinning this view is the belief held by many that every worker should, as a matter of principle, be afforded some system of employee voice. The absence of employee voice disproportionately impacts those social groups who face greater vulnerability in the labour market, including racial and ethnic minorities, recent immigrants, women, and youth.
Recognition of the importance of voice can be seen in the evolving jurisprudence of the Supreme Court of Canada, in a number of cases, some of which we quoted in our chapter on Guiding Principles, Values and Objectives. Taken together, they recognize the value of employee voice, as seen, for example, in the court’s discussion of the rights to organize in pursuit of common goals, to make representations and engage in meaningful dialogue, and to exercise real influence over the establishment of workplace rules.
There is little doubt that effective employee voice can make workplaces function better. In our many years as practitioners we have seen, directly, that the most successful workplaces are those in which the parties work together, embracing opportunities for voice by fostering open dialogue, problem-solving and innovation.
Research on workplace trends has emphasized that our modern, knowledge-based economy requires a high level of trust and cooperation at work, relationships that foster teamwork, networking, information-sharing, high commitment, and good customer service. The absence of employee voice, on the other hand, tends to produce high-conflict/low-trust employment relations and underperforming enterprises.
About ten years ago, a published study by American researchers Richard Freeman and Joel Rogers identified the so-called “representation gap”, based on a large-scale survey of both American and Canadian private-sector workers. The picture painted by these authors, arising from these survey results, was that: “given a choice, workers want ‘more’”, including more say in the workplace decisions that affect their lives, more employee involvement in their firms, more legal protection at the workplace, and more opportunities for collective representation.
We are releasing to the public, concurrent with this Interim Report, a list of research projects that we commissioned for this Review, including a research report on employee voice. The report reviews the decline of unionization in the private sector and the fact that unions may well not be able to attain a meaningful presence there. It argues that there is a vacuum in Ontario, created by a lack of meaningful ways for employees to express their voice in the vast majority of non-union workplaces.
That paper canvasses alternatives to the Ontario model of labour relations, called the Wagner Act model, including concepts about minority unionism put forward in the United States and in Canada, while also outlining how European jurisdictions, including the United Kingdom and Germany, deal with this. The paper examines, in depth, the potential positive and negative attributes of these models.
We will consider those models as part of this Review, and we urge interested parties to examine the paper and the models, and to comment to us in writing as they may find appropriate.
We make some brief comments on some of these issues, below.
Germany, in the latter half of the 20th century, developed a system of “co-determination,” including a legislated requirement for the establishment of works councils. These bodies have substantial powers, extending to the effective right of veto on some issues. Participation rights allow for joint decision-making jurisdiction over a wide variety of issues, including hours, occupational health and safety, training, job classification, and individual and mass dismissals. They are not unions (although union members normally play a key role in them). German works councils are closely tied to a co-operative industrial relations model in which the value of employee voice is widely recognized at all levels (e.g., worker representation on the supervisory boards of larger corporations and extensive tripartite collaboration between labour, business and government at the policy level).
During our consultations, no one suggested that a model such as this, though not uncommon in European jurisdictions, could be transplanted root-and-branch to Ontario. Examining such models simply illustrates that there are different paths for achieving employee participation in the workplace.
The Law Commission of Ontario (LCO), in its report, Vulnerable Workers and Precarious Work (2012), did advocate the introduction of a “works council” model as a means of increasing employee participation and knowledge, initiating discussions between employers and employees on ESA matters and for potentially resolving disputes. If effectively implemented, the LCO suggested that the existence of such councils would reduce worker isolation by creating a system of support and representation in the workplace. The LCO noted, however, that there was a “mixed reaction” to this idea among members of their project advisory group.
In a similar vein, the review of the Canada Labour Code Part III (the Arthurs Review, 2006) recommended that the federal law be amended to facilitate consultation between employers and workers concerning any statutorily-permitted variation from working time standards. Under this proposal, where no union held bargaining rights, workers would be represented by a new body, the Workplace Consultative Committee (WCC). Among other things, the WCC would hear and consider all proposals put forward by the employer (e.g., regarding variations to working time standards) and be entitled to request and receive relevant information concerning the need for and consequences of the employer’s proposals. It would also be able to offer its own suggestions concerning the matters under discussion. Part III of the Canada Labour Code was not reformed following the recommendations in this report.
We note that the legal and historical situation in Canada and the United States is different. In the United States, a series of decisions and interpretations of the NLRA have severely limited the scope of non-union employee representation systems by finding them to be employer-dominated labour organizations which are unlawful under the NLRA. By contrast, in Canada, non-union voice is neither banned nor encouraged by legislation. A representative group of non-union employees can negotiate with their employer over terms and conditions of employment, including wages and benefits.
While not widespread, there have been some cases in which very sophisticated employee representation systems have been developed within Canadian firms. In some cases, these systems have ultimately transitioned to conventional union/collective bargaining relationships. It should be noted, however, that Canadian unions are generally wary that employee representation systems in non-union enterprises provide, at best, a very poor substitute, and at worst, an impediment, to the genuine, autonomous expression of worker voice that unionism provides.
The situation in the United States and Canada differs in another important respect. In the United States employees, who are not unionized but who are covered by the NLRA, have the right to engage in “concerted activity” under section 7 of the NLRA. This has been deemed to mean, for example, that any group of workers may make demands on the employer and, if not satisfied with the response, may engage in a legal work stoppage (or other types of activity). There is no similar provision under Canadian law. As a general rule, only unionized employees have the legal right to strike after engaging in good faith bargaining and conciliation. After the decision by the Supreme Court of Canada in Saskatchewan Federation of Labour v. Saskatchewan, (2015) S.C.J. No. 4 it is an open question whether concerted activity by non-union employees is protected under the Charter and whether it would carry with it a right to strike.
In the United States, because the NLRA protects “concerted activity” by non-union employees, there is somewhat greater scope for the concept of “minority unionism.” A group of employees, falling short of a majority within the workplace, can engage in different types of actions in an effort to organize workers, provide advocacy and influence management within a context where there is some legal protection for these activities.
The emerging importance of organized non-union voice in the United States was evident at the recent (October 7, 2015) White House Summit on Worker Voice. Background information provided on the White House website notes the growing importance in that country of alternate forms of worker bargaining or activity to improve conditions at their workplace.
Canada often lags behind developments in the United States, sometimes for very good reason, as these developments do not necessarily fit within our cultural and political context. Our industrial relations systems are similar, however, unions in the United States are perceived to be even weaker than they are here. Given the fact that these developments have taken place in that country in order to replace union certification and bargaining activity there, it would be surprising if this same kind of employee activity did not become more commonplace in Canada.
What we heard through our consultations tends to generally reinforce the conclusions of the researchers noted above. While individuals and groups that met with us typically did not frame their submissions within the terminology of “voice,” it is clear that there is a real desire coming from a range of workplace contexts for workers to have greater input and influence with regard to the issues that affect them at work. This emerged strongly from the submissions made by labour and employee advocacy groups, as well as many individuals.
One concrete expression of this desire is the recommendation that Ontario adopt a provision similar to the American NLRA’s protection of “concerted activity” section for the purpose of “mutual aid or protection.” It was submitted that:
This submission is in aid of ensuring “protected space” for organizing, demonstrations, and campaigns among fast food, retail and warehouse workers in the United States, resulting in wage increases in some cases, as well as bringing attention to shift scheduling and work hour issues.
On the management side, considerable caution was advised with regard to making any major changes to our system, particularly in relation to the LRA. Employer groups generally indicated major concerns that any expansion of our collective bargaining model could upset the current balance and negatively affect Ontario’s competitiveness.
In this regard, there would likely be concerns raised about any new legislatively- imposed mechanism for ensuring employee voice. For example, the Human Resources Professional Association noted that: