When A Deal Isn't a Deal

"The reality is that our health system has been on a fast track to collapse. We've got to get the situation under control so we can meet the needs of the patients and the needs of the people of British Columbia." So said British Columbia Minister of Labour Graham Bruce in early 2002 as his government asked the legislature to pass the controversial Health and Social Services Delivery Improvement Act.
June 1 st 2004

"The reality is that our health system has been on a fast track to collapse. We've got to get the situation under control so we can meet the needs of the patients and the needs of the people of British Columbia." So said British Columbia Minister of Labour Graham Bruce in early 2002 as his government asked the legislature to pass the controversial Bill 29, the Health and Social Services Delivery Improvement Act.

Getting a situation, any situation, under control seems to be a pretty sound idea. In this case, though, the specifics are far more troublesome. Bill 29 was intended to make major changes to the governance, structure, and management of the health-care sector in British Columbia. The law deals with many job security items: contracting out, bumping, and layoffs, among other things. That wouldn't be a problem, except for the fact that the vast majority of the affected health workers are unionized and already covered by collective agreements which (not coincidentally) deal with matters such as contracting out, bumping, and layoffs, among other things.

Of course, this reality was not lost on those who drafted Bill 29. In fact, the bill specifically voids or overrides collective agreement provisions relating to the job security of workers in the health sector. Some practical effects of the legislation and accompanying regulation: employers can contract out services that were previously protected by collective agreement language; employees are entitled to no more than 60 days notice of layoff, even if their collective agreement requires more than that; a more restrictive bumping procedure is imposed; and the entitlement of laid-off employees to retraining and job-search assistance is removed.

The loss of such job security by workers is not to be taken lightly. In this case, some employees likely purchased homes or vehicles, made educational or retirement plans, or turned down other employment opportunities based on the reasonable assumption that their jobs were relatively secure and that any potential layoff would include sufficient notice and retraining opportunities. However, there is a more fundamental issue raised by the B.C. government's approach in Bill 29.

Many of those opposed to Bill 29 characterized it as an attack on democracy. That is probably not terribly accurate, as the legislation was passed, after debate, by a democratically elected government, and it didn't really take away the democratic rights of the citizens of British Columbia. Even those health workers negatively affected by the bill will have every right to vote in support of a different political party in the next election.

Others might note that, through Bill 29, the government interferes with and amends agreements freely negotiated between labour relations partners. One of the crucial pillars of a modern, industrialized economy is the requirement that a freely-negotiated, good-faith agreement reached between two parties be binding and enforceable. This far-reaching principle undergirds many, if not most, transactions in Canada today. When one signs an agreement to purchase a house, and the vendor also signs that agreement, it must be considered valid and reliable; in fact, there may be a substantial penalty to the party who breaks the contract. The same applies to the purchase of a car, the awarding of a construction contract, the opening of a bank account, even the signing-up of a child for a summer sports camp. Call it a contract, a covenant, a collective agreement, whatever—a deal is a deal is a deal. Imagine a culture where written, mutual agreements are not binding and cannot be enforced. Virtually every aspect of that society's economic and social structure would collapse.

It is also interesting to consider how the B.C. government's actions in this matter blur the boundaries between two of its distinct roles. On the one hand, a provincial government has a responsibility to regulate labour relations. Presumably, this means acting in a somewhat impartial manner, setting the ground rules, and creating a level playing field for the conduct of labour relations in the province. On the other hand, every provincial government is an employer, both directly and indirectly (e.g., through institutions that are largely or solely publicly-funded, such as hospitals.)

In British Columbia, the government used its authority as regulator of labour relations to grant itself powers it would never have had access to as an employer. Although the public, media, and courts would never tolerate a government that exempted its employees from the obligation to obey highway traffic laws, Bill 29 had a similar effect. The "regulator" government used (or perhaps mis-used) its authority to exempt the "employer" (or quasi-employer) government from some of the basic principles of employment law.

And yet the most difficult part of the Bill 29 situation is not the alleged attack on democracy, not the governmental interference with negotiated contracts, and not the possible abuse of power by the "regulator" government. Even more seriously, the government of British Columbia has, to satisfy some short-term goals, reneged on an important historical bargain.

In the early years of North American trade unionism, employers were not legally required to recognize a union. The union might sign up a majority of workers, and those workers might authorize the union to speak on their behalf, yet there was nothing but brute economic (or physical) force to compel the employer to recognize and bargain with the union. This caused serious economic and social disruption, and governments came to realize that it was in the interests of both justice and economics to require that, under the right circumstances, employers must recognize legitimate unions.

This mandatory recognition, while helpful, still left serious labour relations and economic issues. A union and employer could agree on certain terms and conditions of employment—but what happened when one side alleged the other to be in violation? In many cases, each such grievance would result in a further work disruption.

This prompted the Canadian government, through an emergency Order in Council in 1943, to prohibit strikes and lockouts except in the context of the negotiation of collective agreements. It was then necessary to provide a mechanism for the peaceful settlement of disputes during the term of a collective agreement, and the mandatory grievance arbitration process became the solution. Even after the expiry of the Order, the federal and most provincial governments enacted labour relations statutes based on its premise.

The premise was fairly simple, and it was (and is still) based on compromise. The parties would give up the right to withhold services (that is, to strike or lock out) during the term of a collective agreement, thus being deprived of one of their most significant bargaining chips. In return, they gained assurance that an alternate dispute resolution process would be guaranteed by law: the collective agreement would be binding on both parties, and any violations would be dealt with in an effective manner. From the point of view of the worker, it was safe to give up the right to withhold services because an effective (and better) method was put in place to guarantee the contract. Both employer and worker benefited from this solution, as did society as a whole.

Why is this relevant to health-care workers in British Columbia? Quite simply, these historical developments in Canadian law have created labour stability which is often taken for granted today. Employees, unions, and employers know that a negotiated collective agreement is binding on both parties, and no one need resort to work stoppages or violence to enforce it. An alleged breach of the agreement between the parties is subject to a binding ruling by an impartial arbitrator. A deal is a deal, and if it's broken, the authorities will step in.

That system is turned upside down when the authorities step in to break the agreement, rather than protect it, and that's what happened in British Columbia. The ramifications of this action are significant. In this case, the government expects the workers to continue to honour their part of the historical bargain—that is, continue to provide services—when the government has torn up its commitment to ensure that a collective agreement is valid and enforceable.

The unions affected by Bill 29 took the matter to the British Columbia Supreme Court, where they argued, among other things, that the law violated the protection of freedom of association found in the Canadian Charter of Rights and Freedoms. The Court, however, found that the government's action did not violate this right, as health-sector employees remain free to exercise their "associational activities." (The unions did not raise the historical issue, either in the courts or publicly.)

The introduction and implementation of Bill 29 was a short-sighted move. It is quite possible that it will save the government money and perhaps even ward off the health system "collapse" which Mr. Bruce referred to. These are worthwhile goals, but the cost is great. If unions, employees, and employers can no longer expect with certainty that negotiated agreements are binding and will remain that way, the impact on labour relations will be significant—and negative. In passing Bill 29, the British Columbia government has done more than burglarize a few collective agreements. A historical bargain has been broken, and the full consequences of this are yet to be seen.

 

At the time of these Comment contributions, Ed Bosveld was Ontario Provincial Director for the Christian Labour Association of Canada, an independent Canadian trade union representing more than 45,000 members. He served as part of the union's national management team as well as its provincial organzer and legal affairs coordinator.

Bio