Has Harris Really Changed Things?
Has Harris Really Changed Things?

Has Harris Really Changed Things?

May 1 st 2001

"I also want to begin by pointing out the absolute hypocrisy of the title of the bill, calling it the Economic Development and Workplace Democracy Act. Why don't you just 'fess up and come clean and call the act exactly what it is: Further Gutting Ontario's Labour Laws so that Our Already Rich Friends Could Make Even More Money? That's the name of the game here."
—Mr. David Christopherson (MPP, Hamilton Centre)

If those interested in maintaining the status quo were worried the Harris government had the foresight and fortitude to replace the current labour relations boat, they shouldn't have been. The Ontario government's most recent changes to the Labour Relations Act merely signified another tilt to starboard.

Sure, thousands of people protested in the streets. Critics suggest the latest amendments to the Labour Relations Act, the act which governs relations between unions and businesses, amount to union-busting libertarianism that threatens social cohesion and stability. Supporters laud the changes for restoring labour-management balance, protecting workers' democratic rights, and modernizing our labour law regime.

One would think Ontario's labour law has been fundamentally reshaped. And that is the widespread perception. If so, it's not the first time. Back in 1990, Bob Rae's union-friendly NDP pushed the ship hard left with a raft of pro-labour changes that upset business as much as the current changes upset unions.

This left-to-right rocking of the labour law boat—besides leaving some on both sides a little green—assumes the current adversarial model is still seaworthy. But over the last 15 years or so, the idea that it should be scuttled has been gaining prominence with the realization that Canadian business and labour needs more than status quo tinkering.

The pendulum of pro-labour and pro-business labour reforms has swung since the Wagner model became the standard for North American labour law in the 1930s. The National Labor Relations Act, enacted July 1935 by the U.S. Congress to govern labour-management relations, was seen as pro-labour and implemented as part of Roosevelt's New Deal. It was called the Wagner act after Senator Robert R. Wagner of New York, who introduced the bill in Congress.

Just 12 years later, the Taft-Hartley revisions were introduced by the Republicans. While the pendulum's pace may have increased and its reach widened, the back-and-forth pattern of labour law revisions was set in motion and continues to this day.

The actual introduction of the Wagner model in Canada came through an Order in Council and attracted little public discussion amidst the war headlines of 1944. Andrew Sims, former chairman of the Alberta Labour Relations Board, notes that adopting this model was part of "our increasing faith in all things American," with the only significant difference being that Canada placed both the administrative and adjudicative functions in a single Labour Relations Board whereas the Americans divided the assignments between two bodies. A 1950 Supreme Court decision emphasizing the provincial lead in labour relations, our greater willingness to use government intervention to resolve conflict, and the impact of the Charter of Rights and Freedoms have resulted in very different evolutions of the Canadian and American Wagner systems.

In the past decade, the federal government initiated a major revision to the Canada Labour Code while Ontario and Manitoba have had two sets of major labour law changes—in each case the second being an undoing of the first as a result of a new government in charge with a different leaning. The British Columbia Liberals are promising to do the same in the first 100 days of their mandate, should they be successful in the upcoming provincial election. Most other provinces have also introduced labour law revisions.

While some view the past changes as evolutionary, a necessary tweaking of labour law to keep pace with the demands of a modern economy, many are couching their arguments for change in revolutionary terms. This builds on a growing sense that the existing framework of Canadian labour law is impeding our economic growth and prosperity and that fundamental change is needed for both business and labour to succeed in the future.

The 1985 MacDonald Commission was one of the first to recognize that the "institutional rigidities and attitudes" of our labour system were among the impediments to growth. Its report, Royal Commission on the Economic Union and Development Prospects for Canada, concluded that "Canada's labour-relations system is too adversarial in nature. . . . Canadians should move toward a more cooperative system marked by stronger emphasis on problem solving, more consultation, and deeper mutual respect and trust."

Harvard Business Professor Michael Porter was more explicit. "A new labour-management paradigm is needed if both sides are to maintain prosperity" he argued in his 1991 study, Canada at the Crossroads: The Reality of a New Competitive Environment. Porter examined various aspects of the Canadian economy in an international context and concluded that "in countries such as Switzerland and Germany, . . . cooperative relationships between the constituencies have resulted in policy stability and more peaceful labour-management relations."

Bringing about cooperative labour relations depends a lot on the attitudes and strategies adopted by both labour and management. However, few would argue that the legal framework within which labour relations is conducted is a necessary, and even leading, catalyst for change. Is the present model capable of performing that task?

Andrew Sims was quite direct in answering that question in his 1994 Woods lecture to the Canadian Industrial Relations Association. "How healthy is Wagnerism in Canada at 50? It is suffering from old age and faces a tough time with the competition. It runs the risk of being marginalised."

Roy Adams, MacMaster University professor of business, writing in the Hamilton Spectator on the occasion of Labour Day 2000, was even more blunt. "The legal framework that regulates union organizing and union-management relations in Canada is worn out and needs to be scrapped." Adams argued the framework is inefficient, costly, and exclusionary. "With all of its faults, it must surely collapse sooner or later," he said.

If there is growing consensus that a new labour-relations vessel is required to navigate the choppy economic waters of the twenty-first century, have the changes over the years brought us towards a new model? Or are the cumulative effects nothing more than running from side to side, leaning over the edges of a creaking 70-year old Wagner boat?

A closer look at what has cumulatively been accomplished in Ontario over the past decade helps answer the question. Ontario provides a good case study since few would argue that its pace of change has been more rapid than any other province.

When the Harris changes are placed against the backdrop of significant labour change effected by Bob Rae's NDP government in the early 1990s, Ontarians are forgiven for feeling they've been on a bit of a roller coaster. Part of the purpose of labour law is to provide for industrial stability and to protect society and the economy from the costs and uncertainty that stems from any change.

The decade of change in Ontario actually started with the Liberal-NDP accord following the 1987 provincial election. Part of the agreement in which the NDP supported the David Peterson Liberals, helping to end over 40 years of Progressive Conservative government, was a commitment to implement pay equity legislation. After his election in 1991, Bob Rae and the NDP strengthened the Pay Equity Act, implemented employment equity legislation, and introduced the Social Contract Act as well as pro-union revisions to the Labour Relations Act—each having significant front-line impact on labour relations processes.

In their 1995 election platform, known as the Common Sense Revolution, the Harris government committed to undo these changes and encourage workplace democracy. The first changes came with Bill 7 in 1995, which, among other things, eliminated the ban on replacement workers during strikes and introduced a secret ballot on union certification votes. Numerous other changes—not hugely significant on their own—cumulatively made life much more difficult for unions trying to organize new workers. Simplified calculations for termination pay and reducing the scope of the Wage Protection Program also were more favourable to employers. A year later, Bill 8, the Job Quotas Repeal Act, eliminated affirmative action and employment equity obligations. It was followed by Bill 49, the Employment Standards Improvement Act, which simplified the red-tape and rules affecting nonunion employees and minimum employment standards.

In 1997, Bill 136, the Public Sector Labour Relations Transition Act, came into effect, providing transitional provisions to support collective bargaining issues and processes arising out of public sector restructuring. On its heels was Bill 31, the Economic Democracy Act. It eliminated the power of the Ontario Labour Relations Board in issuing certificates as a remedy for employer interference in organizing campaigns (the so-called Wal-mart provision). Bill 31 also introduced project agreements provisions allowing certain major construction projects to take place outside of the provincial bargaining regime and associated rules and redefined construction employers to allow school boards, municipalities, and companies whose primary business is not construction a process to escape union obligations.

The Harris government didn't stop after its re-election. In 2000, Bill 69, the Labour Relations Amendment Act (Construction Industry), provided certain relief for unionized construction contractors who found the provincial bargaining arrangement made them uncompetitive. Forming nonunion companies became easier, and residential strikes were limited to a six-week window.

Bill 139, An Act to Amend the Labour Relations Act 1995, was introduced later that year. In the name of worker democracy, it required that a notice of decertification procedures be posted in every unionized workplace. Curiously, similar notices on certification for nonunion workplaces were not required. It also extended the window for decertification and changing unions from two to three months at the end of each contract, placed a one-year ban on applications for certification by any union after an application for certification has been dismissed, and required the disclosure of union official salaries in excess of $100,000. Politically provocative, the changes are more about form than substance and make life more difficult—but not substantially different—for the government's foes.

So has changing labour laws an average of once per year netted any progress towards lasting systemic change in Ontario? Undoubtedly, it is now more difficult for unions to organize nonunion employees. For workers already unionized, little has changed, except that the atmosphere is further polarized, and the pressure on unions to prove their worth to members has increased.

This is the cumulative effect of 10 years of rocking the boat left then right. Some may argue we have more balance than before. But balance in labour relations is very much in the eye of the beholder. Rather than moving the province towards a more cooperative, democratic approach based on mutual trust and respect, the changes, if anything, have intensified an already hostile labour relations atmosphere.

The likely long-term outcomes will also be less than advertised, even in specific sectors where direct changes were focused, such as the contract sector (security, janitorial, and cafeteria services). The loss of site-specific certification means this sector will be slower to unionize. Thus the generally poor working conditions of these low-wage employees are unlikely to improve.

In the construction industry, competitiveness is driven by costs vis-a-vis other jurisdictions, which drive investment decisions. These implemented changes are simply minor modifications to a province-wide single-union model of negotiations, and the effects will be minimal. The Building Trade Council's effective monopoly control of the skilled labour pool required for major construction projects remains unchecked.

A couple of ironies do jump out of this seesaw process. Here is a self-described conservative government, intent on making the public bureaucracy smaller, implementing changes that diminish the influence of unions, meaning more employment enforcement officers will be needed to ensure standards are being met in nonunion settings. A negotiated collective agreement results in costs being borne by the parties themselves.

The irony also extends to unions advocating that government intervene with even more legislation in the workplace. Rather than unions negotiating wages and work conditions and protecting their members through responsible representation, they would rather have an increasing clutter of tribunals and agencies do the job for them.

The arguments for change have become too familiar, even tiring. Across the political spectrum, most agree that the relative merits of a market economy far outweigh those of a managed economy. Most would also suggest market values alone should not determine labour and living standards. Labour is not just another factor of production. Considerations other than just supply and demand must be brought to bear when dealing with fellow human beings.

This has not converted the public into unabashed union enthusiasts, although the majority support the institution of unionism. Almost everyone (97 per cent according to a 1999 Gallup survey) can envision a scenario in which they might need the help of a union. Even the most hard-nosed anti-union employers concede unions are necessary to protect workers. Just not in their workplace. Any new labour relations model must include a role for unions.

The approach of the Harris changes has been to make life more difficult for unions, presumably in the belief that the common sense of ordinary workers will tell them to choose the better world of nonunion employment. Unions are still around for workers to choose when faced with a genuine bad-apple employer, and these employers are only getting what they deserve.

In sum, the Harris approach has been to increase the adversarialism of labour relations, hoping that this will lead more workers to choose not to belong to a union. It is precisely the wrong approach. Because the root problem of the Wagner model as it has evolved in Canada rests in its assumed adversarialism, its unnecessary limits on worker choice, the effective provision of union monopoly in certain sectors, and the inherent resistance to change that the system breeds. None of these core issues have been touched by past changes.

Most workers do not have a meaningful choice in whether they want to belong to a union or if they want to be represented by competing union models. The process of joining, changing, or decertifying a union remains poorly understood and difficult to access.

The adversarial model of unionism, which denies workers freedom of choice, remains the single greatest impediment to the development of the labour force and the economy. But changing this mindset will be difficult. Resistance comes from within the construction and government sectors where particular unions have effective monopoly control—either through legislative protection or established practice—and resist changes necessary for the development of the province. Andrew Sims notes the irony that whereas "Wagnerism was conceived as a tool for change, our restriction to periodic bargaining increasingly runs the risk of being used as a barrier to change, with unions becoming the new conservatives." The argument certainly holds true at a macro level as well.

Cynics argue that the Harris government's recent changes in Ontario labour law were more about politics than about implementing effective public policy. Labour issues become a symbolic wedge to force the choice between union leaders on one side and the government on the other in order to attract votes. If this is what motivates the current government, then their business supporters should not complain when the inevitable rebound legislation swings the pendulum back against them.

If, on the other hand, the government's intention was to move towards lasting public policy change that will assist the province in building economic prosperity, they missed the boat. The structural problems inherent in the Wagner model have not been touched. By implementing a forceful agenda within an old framework, labour relations have polarized further, and constructive change is now even more difficult.

Unless there is an intervening crisis, we are less than a decade away from the writing of a 25th anniversary report of the MacDonald Commission. No doubt it will confirm the accuracy of the original prognosis.

Replacing the current adversarial model requires a government with the vision to implement "a more cooperative system marked by stronger emphasis on problem solving, more consultation, and deeper mutual respect and trust." It also requires a government with fortitude to resist the cries of those with a vested interest in maintaining the status quo to make it happen.

Ray Pennings
 
Ray Pennings

Ray Pennings co-founded Cardus in 2000 and currently serves as Executive Vice President, working out of the Ottawa office. Ray has a vast amount of experience in Canadian industrial relations and has been involved in public policy discussions and as a political activist at all levels of government. Ray is a respected voice in Canadian politics, contributing as a commentator, pundit and critic in many of Canada’s leading news outlets and as an advisor and strategist on political campaign teams.

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