AMERICAN BAR ASSOCIATION SECTION OF LABOR EMPLOYMENT LAW INTERNATIONAL LABOR LAW COMMITTEE MID-YEAR MEETING MADRID, SPAIN MAY 10-14, 2009

Transcription

1 AMERICAN BAR ASSOCIATION SECTION OF LABOR EMPLOYMENT LAW INTERNATIONAL LABOR LAW COMMITTEE MID-YEAR MEETING MADRID, SPAIN MAY 10-14, 2009 CARD MAJORITY CERTIFICATION AND FIRST CONTRACT ARBITRATION: LESSONS FROM THE CANADIAN EXPERIENCE DANNY J. KAUFER HEENAN BLAIKIE LLP 1250 René-Lévesque Blvd. West Suite 2500 Montreal, Quebec H3B 4Y1 Canada (Offices in Quebec, Ontario, Alberta and British Columbia) HEENAN BLAIKIE

2 2 CARD MAJORITY CERTIFICATION AND FIRST CONTRACT ARBITRATION: LESSONS FROM THE CANADIAN EXPERIENCE Danny J. Kaufer * 1. INTRODUCTION The legal fundamentals of their labor relations systems are something Canada and the United States share with each other and with almost no other country in the world. 1 So North American exceptionalism in this part of labor relations makes Canadians practical experience with two of the most contentious proposed changes to American labor law certification on the basis of card majorities and first contract arbitration of real interest to American labor lawyers, academics and legislators. 2 Since the late 1970 s one or both of these ideas have been found in the labor relations statues of most Canadian jurisdictions. How this lengthy experience has played out in Canada is the theme of this paper. Canadian labor law shares fundamental features with that of the United States because from the later 1940 s on all jurisdictions in Canada adopted labor relations statutes modeled on the Wagner Act. But since that time two features of Canadian public life have produced far more varied and more rapidly changing labor legislation than in the United States. The first of these features is the division of powers between federal and provincial governments in the Canadian constitution. This gives exclusive jurisdiction over the labor relations of almost * Partner, Heenan Blaikie LLP (Montreal, Canada); dkaufer@heenan.ca. The author would like to acknowledge the assistance of Thomas Brady, Partner, Heenan Blaikie LLP (Montreal, Canada); tbrady@heenan.ca and of Michael Grodinsky, Associate, Heenan Blaikie LLP (Montreal, Canada); mgrodinsky@heenan.ca in the preparation of this paper. 1 For a concise introduction to Canadian labor law, see R.L. Heenan and T. Brady Canada in W.L. Keller and T. Darby (eds): International Encyclopedia of Labor and Employment Law, (2d ed), (Washington, D.C., BNA Books, 2003), Vol. I, chapter 21, pp to (with supplements) (3d ed in press). For a fuller treatment, see D.G. Gilbert, B.W. Burkett and M.K. McCaskill: Canadian Labour and Employment Law (2d ed) (Washington D.C., BNA Books, 2006), (with supplements) chapter 2. 2 Employee Free Choice Act of 2009, HR 1409, 111 th Congress 1 st Session and S 560, 111 th Congress, 1 st Session, both introduced March 10, 2009.

3 3 all employers and employees to the provinces. Federal labor law does not pre-exempt provincial law and the federal government has exclusive jurisdiction in labor relation matters only over the roughly 10% of employees who work in industries over which the federal government is expressly given jurisdiction under the Canadian constitution. While these industries are critical ones in a modern economy banking, telecommunications, broadcasting (including the internet) and interprovincial or international transportation are among them this federal power does not alter the fact that each province can adopt a labor relations regime tailored to its own particular circumstances which will cover almost all employees in the province. Canada s parliamentary system of government is a second major influence tending towards differences in important features of labor legislation. Parliamentary government means that a federal prime minister or provincial premier wishing to change labor legislation is assured of a legislative majority and relatively swift passage for even the most contentious of innovations. These two causes account for much of the story of the patchwork of Canadian labor legislation on card majority certification and first contract arbitration. 2. UNIONIZATION IN CANADA A much higher portion of the Canadian workforce is unionized than in the United States. There, 12 percent of employees are unionized; in Canada the figure is about 30 percent. 3 While union density in the United States varies from 3 percent (North Carolina) to 25 percent (New York), in Canada density varies from 24 percent in Alberta to 40 percent in Quebec. So, in Canada, the least unionized province has almost the same percentage of unionized employees as the most unionized state in the United States. As discussed later in this paper, the formerly widespread use of card majority certification has likely had a significant effect on Canada s higher unionization rates. This effect continues today, even though most Canadian jurisdictions no longer permit card majority certification. 3 Bureau of Labour Statistics News, January 25, 2008; Business Council of British Columbia, Industrial Relations Bulletin, Vol. 39, no. 2, February 2007.

4 4 Another point of the Canadian industrial relations scene which contrasts even more strongly with that in the United States is the incidence of strikes. The incidence of strikes is often measured for international comparison purposes in terms of days not worked per 1,000 employees. By this measure, the United States lost an average of 36 days each year in ; Canada s annual average for that period was 208. The United Kingdom lost 23 days per year on average over the same period and the most strike prone country in the European Union, Spain, lost THE CERTIFICATION OF TRADE UNIONS IN CANADA In a well-written and thought-provoking essay on card majority certification and related labor issues, my colleague Roy Heenan offered a stinging critique of the card majority certification schemes then existing in Canada. 5 Some fourteen years later, I would subscribe to his critique. It is one which should give pause to American legislators as they again consider whether to add card majority certification to the National Labor Relations Act as proposed by the Employee Free Choice Act of It is first important to clarify what card majority certification means in Canada. In general terms, this refers to legislation permitting or requiring a labor relations board to certify a union as the exclusive bargaining agent for a group of employees if the union files membership cards signed by the percentage of those employees specified in the relevant labor legislation; under some Canadian legislation the threshold is 50% plus one. There is no subsequent vote to verify whether the cards represent employees true wishes. Once the union is certified, it is the exclusive representative of all employees in the bargaining unit in labor relations matters. The frequently seen alternative in Canada is a mandatory secret ballot vote held within a very short time after a union files membership cards signed by a specified percentage (not usually a majority) of the employees in the proposed bargaining unit. A secret ballot vote is held under the 4 International Comparisons of labour disputes in 2005 Economic Labour Market Review, Vol. 1, no. 4, April 2007 (U.K. Office of National Statistics. 5 Roy L. Heenan, Issues for the Dunlop Commission: The Canadian Experience in Bruno Stein (ed), Contemporary Issues in Labor and Employment Law: Proceedings of New York University 47 th Annual National Conference on Labor) (Little, Brown and Company, 1995). 6 Supra, n. 2

5 5 supervision of the labor relations board. A majority vote in favor of unionization requires the board to certify the union as the exclusive bargaining agent for the unit. A majority vote against unionization puts an end to the application and any other one by that union for the period of time, typically several months, specified in the governing labor legislation. Six of Canada s ten provinces, including three (Ontario, British Columbia and Alberta) of the four most populous, require secret ballot votes 7. Four provinces, including Quebec the second most populous, permit card majority certification, as does the federal jurisdiction Secret Ballot Certification Canada s four largest provinces in terms of employment (Ontario, Quebec, British Columbia, Alberta) account for 86% of the Canadian workforce 9. Among them, only Quebec permits card majority certification. In Ontario and British Columbia, card majority certification was replaced by mandatory secret ballots in 1995 and 2002, respectively, shortly after governments strongly supported by organized labor had lost elections. As academic commentators have noted, free trade between Canada and the United States from the late 1980 s has affected labor legislation in various ways, including certification regimes: There has been a shift away from card-count certifications to mandatory votes. Prior to the free trade era, one province required votes. Since 1988, the number has increased to five (Nova Scotia, Alberta, Newfoundland and Labrador, Ontario and British Columbia) covering about two thirds of the labour force British Columbia, Labour Relations Code, R.S.B.C. 1996, c. 244, Alberta, Labour Relations Code, R.S.A. 2000, c.l-1, Saskatchewan, Trade Union Act, R.S.S. 1978, c.t-17, Ontario, Labour Relations Act 1995, S.O. 1995, c.1, Nova Scotia, Trade Union Act, R.S.N.S. 1989, c. 475 and Newfoundland-Labrador, Labour Relations Act, R.S.N.L. 1990, c.l-1. 8 Manitoba Labour Relations Act, C.C.S.M., c.l-10, Quebec, Labour Code, R.S.Q., c.c-27, New Brunswick, Industrial Relations Act, R.S.N.B. 1973, c. I-4 and Prince Edward Island, Labour Act, R.S.P.E.I. 1988, c.l-1, Canada Labour Code, R.S.C. 1985, c.l-2. 9 Statistics Canada table : Employed labour force by place of work by province and territory, (2006 census data). 10 E. Tucker : Great Expectations Defeated? The Trajectory of Collective Bargaining Regimes in Canada and the United States Post-NAFTA 26 Comparative Labor Law & Policy Journal ( ) 96 at pp. 101, 123. Saskatchewan has required votes since May 2008, again after a change of government.

6 6 Over the past two decades the trend in Canada has been, in fact, towards replacing card majority certification with mandatory secret ballots 11. The procedure for holding these votes on unionization, though, is significantly different from that in the United States. In Canada, a union seeking certification in a jurisdiction with mandatory secret ballots produces membership cards from a specified percentage of the employees in the proposed bargaining unit. The percentage varies depending on the jurisdiction and the cards must normally have been produced within a relatively brief period (e.g. 90 days) before the application is filed. Once it receives the cards, the labor relations board must hold a secret ballot among employees in the proposed bargaining unit within the very brief time specified in the statute. This period varies from 5 to 10 days depending on the jurisdiction. 12 There are several rationales for these very rapid votes, most of them derived from what are seen as flaws in the American practice of extended campaigns before certification: they reduce the scope of campaigning by employers and unions prior to the holding of the vote; they provide for a more stable atmosphere in the workplace prior to the vote; they minimize the costs of certification campaigns to unions; they very much reduce any possible scope for undue employer influence in the vote. This last point is one frequently raised by trade unions in the United States as an important reason for legislative change permitting card majority certification. As one author has commented, an assumption behind the instant ballot approach is that it is neither necessary nor appropriate for an employer to play the same role as the union does in a representation campaign. 13 The costs of campaigning, and the possibilities for doing so in the brief time between the filing of an application and the holding of a vote are necessarily, and deliberately, limited under these Canadian statutes C. Riddell : Union Certification Success Under Voting Versus Car Check Procedures : Evidence from British Columbia Industrial and Labor Relations Review 493 (2004) at J. Logan: How Anti- Union Laws Saved Canadian Labour: Certification and Striker Replacements in Post War Industrial Relations 57 Industrial Relations 1 (2002), , British Columbia Labour Relations Code, s. 14; Alberta Labour Relations Code, s. 34(1)(d); Saskatchewan Trade Union Act, s. 6; Ontario Labour Relations Act 1995, s. 8; Nova Scotia Trade Union Act, s. 25; Newfoundland- Labrador Labour Relations Act, s. 38. Alberta s statute specifies that the representation vote be held as soon as possible (Alberta Labour Relations Code, s. 34(3)), but votes are held on the same very short notice as specified in other jurisdictions legislation. 13 James Bradley : Neutrality Agreements and Card Check Recognition : Prospects for Changing Paradigms 2 Ohio State University Minority College of Law Working Paper Series (2004), p D. Gilbert, B. Burkett, M. McCaskill, supra, pp

7 7 3.2 Card Majority Certification The current minority status of card majority certification regimes in Canada represents a marked change from the position which had developed by the mid 1980 s, when all jurisdictions other than Nova Scotia relied on it. Moreover, Canadian unions, with the Canadian Labour Congress spearheading the drive, had successfully campaigned during the 1970 s for reductions in the size of the majority needed for certification on the basis that employer coercion had frequently frustrated the expression of the true wishes of employees. 15 The traditional rationale advanced in Canada for card majority certification is the avoidance of lengthy political campaign style representation elections often found in the United States, thus negating the undue influence employers are seen as exerting over employees during such a campaign. 16 The instant secret ballot vote aims to negate this potential drawback to certification by majority vote. While all Canadian card majority certification schemes operate in roughly the same way, there are significant differences in detail among them. In all cases, the union must provide signed membership cards from a specified percentage of employees in the proposed bargaining unit. The labor relations board will take certain steps to verify the genuineness of the signatures on the cards and the payment of nominal amounts ($1 to $5) of membership fees, if the statute requires them. If the board determines that the proposed bargaining unit as a suitable one for collective bargaining (normally following an oral hearing if this point is contested) and finds no significant irregularities with the cards, it certifies the union. Where the union cannot produce validly signed cards from a majority of employees, the labor relations board may order a representation vote if the union has cards from a significant percentage (35%-50%) of employees in the proposed unit. 17 Some of the Canadian jurisdictions permitting card majority certification require cards from super majorities of 60% or 65% of the employees in the proposed bargaining unit. 18 Quebec, 15 Logan, supra, at See generally: G.W. Adams: Canadian Labour Law (2d ed) (Aurora: Canada Law Book, 1993, looseleaf), at p. 7-47; P. Weiler: Promises to Keep: Securing Workers Rights to Self-Organization under the N.L.R.A (1983), 96 Harvard Law Review 1769 at Quebec Labour Code, Canada Labour Code: 35%; Manitoba Labour Relations Act, New Brunswick Industrial Relations Act: 40%; Prince Edward Island, Labour Act: 50%. 18 New Brunswick (60%) Industrial Relations Act; Manitoba (65%) Labour Relations Act.

8 8 Prince Edward Island and the federal jurisdiction all require only a 50% plus one majority. 19 This, it may be noted, is the threshold set out in the proposed Employee Free Choice Act of From an international labor law perspective, it is worth noting that card majority certification has been found by the International Labour Organization to be incompatible with its Convention 98, covering the right to organize and bargain collectively: When national legislation provides for a compulsory procedure for recognizing unions as exclusive bargaining agents [representing all the workers, and not just their members], certain safeguards should be attached, such as: (a) the certification to be made by an independent body; (b) the representative organization to be chosen by a majority vote of the employees in the unit concerned; (c) the right of an organization, which in a previous trade union election failed to secure a sufficient large number of votes, to request a new election after a stipulated period; (d) the right of any new organization other than the certified organization to demand a new election after a reasonable period has elapsed (emphasis ours) 20 While neither Canada nor the United States have ratified this Convention, this status of card majority certification internationally is of importance at a time when the United States is considering whether to introduce it. 3.3 Practicalities and Realities of Card Majority Certification At first sight, card majority certification is a simple system. The union files membership cards with the relevant labor relations board. The board verifies and counts the cards simple arithmetic plus the board s labor relations expertise concerning appropriate bargaining units give the answer to the question of whether the union should be certified. In fact, if card majority certification is considered from the viewpoint of whether it is a fair and effective way of discovering employee wishes, it raises complex and difficult issues. For card majority certification, the devil is indeed in the details. 19 Quebec, Labour Code, s. 28(a); Prince Edward Island, Labour Act, s.11; Canada Labour Code, s. 28; Employee Free Choice Act 2009, s ILO Committee of Experts, Case no. 1765, 1996e, at para. 100; ILO C-98 Right to Organize and Collective Bargaining Convention.

9 9 In this section, I will first pose questions on some of these details, then discuss some of the answers that Canadian legislators and labor relations boards have given in dealing with such questions under card majority certification schemes. Card majority certification systems rest on the premise that signed cards are an accurate reflection of employees wishes to be represented by a union. Should the law ever consider a signed card to be a nullity because of the way it was obtained? Should the law allow employees to revoke their signatures on cards and, if so, how and when in the certification process? For how long should a signed card be valid? What date should be used by a labor relations board for deciding on whether a union has cards from a majority of bargaining unit members? When should a union whose application is rejected be able to present a new one and should it be able to use cards from the previous certification drive? Should an employer be accorded a legal interest in the question of whether the cards presented are valid under the relevant labor legislation? What legal interest does the employer have in whether signed cards are properly obtained? How such questions are dealt with in labor relations statutes and by labor relations boards applying them will have a very important effect on how card majority certification operates in practice. Quebec is the province with by far the largest work force among those which have card majority certification. Quebec has one of the highest rates of unionization in North America at 40.2% 21 and its certification system is generally representative of those of the other card majority ones in Canada 22. A brief outline of the system under the Quebec Labour Code shows the types of decisions on the more detailed workings of card majority certification. Canadian legislatures have made and gives the needed background for understanding the Canadian case law under this system. The Quebec Labour Code requires that an association of employees (union) intending to become the certified bargaining agent for a unit of employees prove that it represents a majority 21 N. Veldhius, M. Palacios and K. Godin: Measuring Labour Markets in Canada and the United States: 2008 Report (Canadian Editions): The Fraser Institute, 2008), p. 35. For the private sector the rate is 26.3%, for the public sector 81.5%. 22 One significant difference between Quebec s legislation and that of all other jurisdictions in Canada is that there can be no voluntary recognition of a union as the representative of the employees in a bargaining unit. Certification by the Quebec labor relations board is the only way a union may become a bargaining agent.

10 10 of those employees. 23 The union does this by showing that it has signed membership cards from 50% plus one of the employees in the proposed bargaining unit as of the date the union files its application. Employees who sign cards must have personally paid at least $2 in union dues or initiation fees within the twelve months preceding the date of the application. 24 (Case law has permitted employees to borrow the $2, but the union itself cannot pay the money on the employee s behalf. 25 ) Part time employees can form part of the bargaining unit if they have received seven pay checks over the last thirteen pay periods preceding the filing of the application. Other employees who are not at work for reasons such as leaves of absence, sick leave, or parental leaves and employees who are on lay-off but are expected to be recalled are also eligible to sign cards and are counted in determining whether the union has majority status. 26 When a union files membership cards purporting to be signed by a majority of the eligible employees to the proposed bargaining unit, the labour relations board will, in theory, satisfy itself that the cards were in fact signed by the persons whose signatures appear on them, that these persons in fact paid the union at least $2 and, perhaps, that undue influence was not used to obtain the signature. Undue influence is not readily found by Canadian labour relations boards. Repeated evening visits to homes of employees by groups of union organizers have not been seen as unduly coercive, for example, even where the organizers remained after being asked to leave. In the case of the Quebec board, at least, the verification process is highly opaque: the board has no published regulations or procedures for verifying whether union membership cards and the board employees who perform the verification work are not forthcoming about any steps they normally take to ensure the validity of cards presented as proof of union membership. It may be that verification goes no further than comparison of the names on the cards with the list of names of the employees in the potential bargaining unit which the employer must provide to the board and counting the cards to see if they total 50% plus one of these names. The procedures for checking the validity of membership cards in other Canadian and majority jurisdictions are generally 23 Labour Code, ss. 1(a), 36.1(a), (b). 24 Labour Code, s. 36.1(c). 25 See for example Allan v. Syndicat national de l automobile, de l aérospatiale, du transport et des autres travailleuses et travailleurs du Canada (T.C.A. Canada) (2001), D.T.E. 2001T-270 (Quebec Labour Court) 26 Labour Code, s. 36.1(d).

11 11 similar: verification means no more than checking whether the names on the cards constitute the needed majority of the names of the employees in the proposed bargaining unit. 27 Moreover, labor relations statutes may, as in Quebec and Manitoba, 28 explicitly state that an employer has no legal interest in whether the applicant union has majority support and, hence, none as to whether the cards presented were validly signed. Case law in other card majority jurisdictions in Canada similarly places very tight limits on an employer s ability to challenge the validity of signed cards. As the British Columbia board noted in Dencan Restaurants: Membership cards are not disclosed to the employer or any other persons opposing the application and are not subject to cross examination. [Membership cards] are, in fact, an admissible form of hearsay evidence. 29 The rationale for this position is that employees are presumed to understand the labor law implications of signing a union membership card during a certification and to be able to get any needed clarification from the union before signing. As the Ontario labor relations board stated at a time when that province allowed card majority certification: People who are asked to join a union are expected to be able to sort out most of the confusion by asking questions before they act. If they do not act, this Board is reluctant to treat them any differently than they are when acting in a broader commercial conrtext. 30 Card majority certification legislation in Canada does permit votes in limited circumstances. The union has the option of requesting a vote where it has cards from a percentage of employees less then that needed for certification on the basis of cards, but over a minimum specified in the legislation (e.g., in Quebec, 35%-50%). 31 In the unusual case where more than one union is simultaneously attempting to organize the same employees and none of them has a majority, a 27 D. Gilbert, B.W. Burkett and M.K.McCaskill, supra, n. 1, at p Quebec Labour Code, s. 32; Manitoba Labour Relations Act, s. 47; B. Venne and J. Paquette : «L accréditation d une association de salariés : perspectives, nouvelles règles et bilan des décisions de la Commission des relations du travail» 224 Développements Récents en Droit du Travail (Cowansville, Quebec : Yvon Blais, 2005), at 95, Dencan Restaurants Inc., [1993] B.C.L.R.B. No. 276, at Teamsters Local Union No. 879 v. Leon s Furniture, [1982] O.L.R.B. Rep. March 404 at para Labour Code, s. 37.

12 12 vote will be used. 32 Labor relations boards also have a residual discretion to order votes where they consider them appropriate, but under a card majority system this tends to be very infrequently. Just how far an aversion to holding votes can go is illustrated by the Quebec case where a raiding union filed an application for certification based on a card majority at 2:00 pm the day of the filing. The incumbent union immediately called a meeting of employees and visited some employees at their homes, thus procuring sufficient signed membership cards to regain majority status before midnight. The Quebec courts ultimately upheld the Quebec labor relations tribunal s decision that these circumstances did not require a vote to find out the employees wishes as to which union would represent them, since the incumbent union had reestablished a card majority before midnight on the day of the application. 33 A scenario such as this, though, surely raises questions as to the soundness of the administrative policy presumptions in Canadian jurisdictions using card majority certification that employees who sign cards do so freely and with a sophisticated understanding of the labor law implications of joining a union. Case law from other card majority jurisdictions in Canada showed that this combination of insouciance and naivety as to how far cards reflect the genuine wishes of employees is far from unique. The federal labor relations board, for example, found that unannounced evening visits by groups of union organizers who sometimes remained after being requested to leave were perhaps overly enthusiastic, but did not amount to intimidation or coercion. Its decision was upheld in judicial review by the Federal Court of Appeal. 34 If labor relations boards and courts are disinclined to apply strict standards in considering the validity of signed cards, the opposite tends to be true when questions arise as to whether the cards can continue to be seen as accurately reflecting employees intentions. In Quebec Gatineau Railway, 35 a union filed a certification application, relying on membership cards signed 32 Labour Code, s. 28(b). 33 Syndicat des travailleurs de l entretien du soleil (C.S.N.) v. Syndicat des communications graphiques, section locale 509M (1987), D.T.E (Que. Labour Court); Syndicat des communications graphiques v. Auclair, [1990] R.J.Q. 324 (Que. C.A.). 34 TD Canada Trust v. United Steel Workers, 2007 F.C.A. 285; TD Canada Trust and United Steel Workers, CIRB Dec. no. 363, (Oct. 18, 2006). 35 Les chemins de fer Québec-Gatineau Inc. v. Travailleurs unis de Québec, Labour Court, no , September 15, 2000.

13 13 by between 35% and 49% of the employees in the proposed bargaining unit. Because the union did not have cards from a majority of employees, a secret ballot vote was held, which the union lost. Nine months later, the union presented the cards signed before the vote, along with additional ones which gave it a card majority. The Quebec labor relations board certified the union on that basis, holding that the membership cards signed before the vote rejecting the union could be relied on because the employees had not formally withdrawn them by written notification to the board. The employer s argument that the union s loss in the secret ballot vote was effectively a repudiation of the membership cards signed before it was rejected. The same logic was applied in a higher profile case involving a Wal-Mart store in Quebec targeted by the United Food and Commercial Workers with the aim of making it the first unionized Wal-Mart in North America. 36 The union initially collected sufficient membership cards to trigger a vote; a majority of the employees voted against unionization. The majority against unionization was such that some of the employees who had signed membership cards must necessarily have voted no. Three months after the vote, the union again applied for certification, this time on the basis of a card majority consisting of both cards signed before the vote and additional ones obtained after it. The Quebec labor relations board again rejected the employer s argument that membership cards signed before a vote rejecting unionization could not properly be relied on after the vote, even in circumstances where some of the signers of cards had to have voted against unionization. The board made clear that an employee withdraw a union membership card by formal written application to the board. Card majority certification systems in Canada are thus quite asymmetrical in their standards: labor relations boards accept membership cards without any particular scrutiny of how they were obtained, but impose strict requirements on employees who wish to withdraw their cards. But the practice of accepting membership cards at face value is open to obvious potential abuses, which sometimes surface in the case law of labor relations boards. 36 Travailleurs et travailleuses unis de l alimentation et du commerce, section locale 503 v. La Compagnie Wal- Mart du Canada 2004 Q.C.C.R.T

14 14 In Fabricland Pacific Limited, 37 a union organizer met at a restaurant with some of Fabricland s employees. The organizer and three employees then went to the home of another employee that evening in an effort to have him sign a membership card. While at the employee s house, one member of the party signed the name of another employee named De Marco, who was away on vacation, on a union membership card. The card was filed along with others to give the union a card majority and certification as bargaining agent. The employer eventually learned of the circumstances under which De Marco s card had been signed and brought a successful application to have the certification revoked. The British Columbia labor relations board, in a strongly worded ruling, held that the union had fraudulently submitted the card with De Marco s name knowing that it had been improperly signed. Such an act, as the board held goes to the heart of the integrity of the card-based system. 38 Some additional ramifications of card majority certification can be seen in Purdy Chocolates case. 39 The union there had been certified on the basis of a card majority in During the next four years, the union had signed a first collective agreement and received two strike mandates from the bargaining unit. In 2001, a strike began. Four bargaining unit members were notified by the union that they were liable to disciplinary measures if they attempted to cross the picket line. In response, three of the employees informed Purdy s Chocolates that their signatures, along with that of the fourth employee, had been forged on the membership cards the union had filed in its certification application. The size of the bargaining unit was such that the union s card majority would not have existed in 1997 without these four cards. The employer and the four employees brought applications to the British Columbia labor relations board to have the union s certification revoked on the basis of the forgeries. The union s response included a newspaper interview given by its local president shortly before the board hearing in which he stated that the four employees had definitely signed up and were 37 [1999] B.C.L.R.B. D. No. 53 (reconsideration denied. [1999] B.C.L.R.B. D. No. 218). At the same time this case arose, British Columbia had card majority certification system. 38 Ibid, para Certain employees of R.C. Purdy Chocolates Ltd. and R.C. Purdy Chocolates Ltd v. Communications, Energy and Paperworkers Union of Canada, Local 2000, [2001] B.C.L.R.B. D. no. 412.

15 15 only making their allegations because of a desire to work rather than support a strike. 40 Before the board, the union admitted that the cards bearing the employees names had not, in fact, been signed by them. It then argued that the admitted fraud which had gotten the certification was no reason to revoke it four years later because it now had the support of a majority of employees. The board disagreed, holding that a union should not be given any incentive to obtain certification with forged membership cards in the hope that later events would give it majority support in fact. As the board observed, the integrity of the card majority system depends on the cards submitted having been in fact signed by the employees whose names they bear. As a practical reality, the possibility of such abuses in a card majority certification system is a main factor in the pervasive employer skepticism towards it. This skepticism is reinforced by the administrative methods and the case law associated with card majority certification, which are designed to minimize opportunities for testing the proposition that the cards produced accurately reflect the informed choice of employees on being represented by the union. The negative effects of this skepticism regarding what is easily perceived by employers as the legal fiction of majority support for a union can often make themselves felt in early collective bargaining following such certifications. One legislative response arising in part from the collective bargaining difficulties card majority certification can cause has been first contract interest arbitration, discussed later in this paper. Another response has been to take up the observation of Professor Paul Weiler of Harvard Law School, a former chairman of the British Columbia Labour Relations Board: A secret ballot vote has a symbolic value that a card check can never have. It clears the air of any doubts about the union s majority and also confers a measure of legitimacy on the union s bargaining authority, especially among minority pockets of employees who were never contacted in the initial organization drive R.J. Kaardal : «Suspect Membership Evidence under the Labour Code of British Columbia: An Unclear Process (2004) 13 Employment and Labour Law Reporter P. Weiler : «Promises to Keep : Securing Workers Rights to Self-Organization under the N.L.R.A.» (1983), 96 Harvard Law Review 1769, at

16 The Canadian Trend towards Secret Ballot Certification Votes From the mid 1980 s, legislation adopted in a majority of Canadian jurisdictions covering over 75% of the workforce has required secret ballot votes for certification. 42 The vote is triggered by a union certification application supported by membership cards signed by a percentage of employees in the potential bargaining unit specified in the relevant labor relations statute. Voting take place within a few days after the union files its application, leaving neither the employer nor the union with an opportunity for the campaigning often seen in American practice. The most notable of these legislative changes took place in Ontario and British Columbia, with Canada s largest and third largest work forces respectively. In Ontario, card majority certification had been the most common form of certification from It received further impetus from legislative changes introduced by a New Democratic Party government in the early 1990 s which had close ties with organized labor. A change of government led to wide ranging changes to Ontario labor legislation and the Labour Relations Act 1995 made mandatory the secret ballot votes which had always been permissible under the Ontario statute. 44 British Columbia has the unique distinction in Canada of having changed from card certification to mandatory votes and back several times. 45 Mandatory secret ballot votes were first introduced in 1984, then eliminated in 1993 when a New Democratic Party government took power. In 2001 the New Democrats lost power and the succeeding government restored mandatory votes for union certification. British Columbia s experience thus makes it a testing ground for the effects of mandatory secret ballot voting on union success rates under the two systems. An important study of the changes in certification procedures concluded that: 42 C. Riddell : «Union Certification Success under Voting versus card check Procedures: Evidence from British Columbia (2004) 57 Industrial and Labor Relations Review Ontario Ministry of Labour : Labour Relations Statute Law Amendment Act 2005 Backgrounder, June 13, Labour Relations Act 1995, S.O. 1995, c.1, ss C. Riddell : «Union Certification Success under Voting versus card check Procedures: Evidence from British Columbia (2004) 57 Industrial and Labor Relations Review 493 at 494.

17 17 Management opposition [ ] was at least twice as effective in the vote regime as in the card-check regime. [ ] However, the incidence of management opposition was slightly lower in the voting regime. This apparent anomaly may have arisen because unions, perceiving a reduced likelihood of success, reduced their number of certification attempts and concentrated only on units with high luck of support. Faced with high union support in those settings, employers may have been less likely to opposite the bid even though their opportunity to do so was greater. 46 These observations are borne out by the decrease in numbers of certification applications in the private sector in both Ontario and British Columbia with the introduction of mandatory secret votes on certification. An average of 667 applications have been filed annually in Ontario since 1995, versus 1418 in the early 1990 s; corresponding figures for British Columbia are 1003 and The success rates for certification applications have also declined when they are decided by a secret ballot vote. Considered together, these facts tend to support the criticism of card majority certification as an accurate reflection of employee wishes. The knowledge that its support among employees will be tested in a secret ballot vote, not cards only, appears to lead unions to become noticeably more cautious in the applications they file. The markedly lower success rate for certification applications decided by a secret ballot rather than on the basis of a card majority supports the idea that cards obtained as cards are obtained in union certification drives are not a highly accurate indicator of employee wishes. These observations are strengthened by the fact that these Canadian results are, of course, the product of a system of instant votes. Canadian legislation is deliberately designed to deny employers the opportunity for extensive campaigning before a vote on a certification application, while allowing unions a large measure of freedom on when they will file an application and thus trigger a vote. Under such conditions, the noticeable drop in successful certification applications can reasonably be attributed to secret ballot votes being a more accurate measure of employee wishes than membership cards. 46 Ibid, at M. Campolieti, C. Riddell, S. Slinn: Labor Law Reform and the Role of Delay in Union Organizing: Empirical Evidence from Canada (2007), 61 Industrial and Labor Relations 32-34; S. Slinn: The Impact of Mandatory Votes Our Times: can be consulted at

18 18 4. FIRST CONTRACT ARBITRATION IN CANADIAN LABOR LAW First contract arbitration began to appear in Canadian labor law in the early 1970 s. In Canadian practice it refers to legislation authorizing a union or employer engaged in bargaining for a first collective agreement following certification to apply to the relevant labor relations board or labor minister for the naming of an interest arbitrator who will have the power to issue a legally binding award setting the terms of the parties initial collective agreement. 48 The agreement of the other party to the collective bargaining is not required. Currently, first contract arbitration is available in all Canadian jurisdictions other than Alberta and New Brunswick. 49 Initially greeted with reserve by trade unions, such legislation is now highly popular with them. 50 Giving a third party the authority to set the terms of the collective bargain between a union and an employer has been recognized from the first as an exception to two fundamental ideas in Canadian (an American) labor law: a collective agreement sets out the terms freely negotiated in good faith by the parties and a recognition that good faith collective bargaining will not always result in an agreement. Indeed, prior to the enactment of first contract arbitration provisions, both labor relations boards 51 and the courts 52 in Canada rejected the idea that collective agreements could be imposed, even as a remedy for unfair labor practices. These two considerations have had an important influence on the development of case law in jurisdictions where the labor relations board decides on whether to impose a first collective agreement and on the nature of the terms which an imposed first collective agreement will contain. But first contract arbitration is no abstract legal principle. Its existence is a significant 48 G.W. Adams, supra, n. 16 at paras gives an overview of first contract arbitration legislation and case law. The first collective agreement arbitration provisions of the principal Canadian jurisdictions which have such arbitration are reproduced in the Appendix to this paper. 49 Manitoba, uniquely, provides for mandatory interest arbitration for any collective agreement, not only a first one, where a strike or lock out has lasted over 60 days and the labor relations board is of the opinion that the parties will not be able to negotiate an agreement within the 30 days following the application for interest arbitration: Manitoba Labour Relations Act, ss G.W. Adams, supra, n. 16, at para Radio Shack (1980), 80 C.L.L.R. 16,003 (Ont., L.R.B.), juidical review application dismissed (1980), 30 O.R. (2d) 29 (Ont. Div. Ct.). 52 Re C.U.P.E. v. Lab. Rel. Bd. (N.S.), [1983] 2 S.C.R. 311.

19 19 influence on the bargaining strategies which unions and employers bring to first contract negotiations. 4.1 When First Contract Arbitration can be requested Canadian legislation provides for two basic routes to first collective agreement arbitration. Several jurisdictions, most notably the federal one and Quebec, provide for an application to the minister of labor, who has a discretion on whether to name an arbitrator (Quebec) or direct the labor relations board to consider whether a first collective agreement should be imposed and, if so, to fix its terms (federal.) 53 Other jurisdictions, most notably Ontario and British Columbia, provide that these applications are made to the labor relations board. The board then decides on whether the facts warrant imposition of an agreement and what the terms of any imposed agreement will be. 54 First agreements under such legislation are typically of two years duration. In all cases, the parties are required to have bargained prior to the application being made and some jurisdictions (e.g. Quebec, Ontario) require that the statutory mediation or conciliation procedures of the labor relations legislation be exhausted before a party can apply for interest arbitration. 4.2 Labor relations boards general approach to imposing first agreements Labor relations boards in Canada initially reacted with caution in applying their powers to impose first collective agreements. In an influential early case, the British Columbia board held: In that situation, if we were to impose upon these parties our own opinion as to a reasonable settlement, we would be acting on the assumption that the Code guarantees that a collective agreement must be reached, and by compulsory arbitration as a last resort. The Code makes no such promise, even in the case of first agreements. The primary method of resolving an impasse at the bargaining table remains the strike or the lock-out. This board is not prepared to dilute the force of that alternative which is a necessary constituent of collective bargaining. The immediate parties are much better able than an outside arbitrator to appreciate what is a fair and politic settlement of the dispute in their own 53 Canada Labour Code, s. 80; Quebec Labour Code, ss Ontario Labour Relations Act 1995, s. 43; British Columbia Labour Relations Code, s. 55.

20 20 particular circumstances. We must ensure that our administration of Section 70 does not distort their responsible search for that point. (our emphasis) The British Columbia Board added that first contract arbitration was intended to be used sparingly because of a troubled history of negotiations and with the definitive objective of getting a collective bargaining relationship under way. 55 In a similar vein, the Ontario labor relations board has tended to impose first agreements mainly in cases where it finds an unwillingness on the part of the employer to recognize the union, as evidenced by surface bargaining, refusal to provide reasons for uncompromising positions or refusing to concede that basic collective agreement concepts such as seniority will form part of the contract. 56 Even such a relatively cautious approach, though is subject to the wording of the governing labour legislation changes to British Columbia s labor legislation in force in the 1990 s led the board to reformulate its earlier approach in London Drugs to the following: 1. First collective agreement imposition is a remedy which is designed to address the breakdown in negotiations resulting from the conduct of one of the parties. It is not simply an extension of the unfair labour practice remedies for egregious employer conduct. 2. The process of collective bargaining itself, to whatever extent possible, is to be encouraged as the vehicle to achieve a first collective agreement. 3. Mediators should be assigned early into first collective agreement disputes in order to facilitate and encourage the process of collective bargaining and to educate the parties in the practices and procedures of collective bargaining. 4. The timing of the imposition of a first collective agreement (if it is deemed appropriate that one be imposed) should not be at the end of the negotiation process when the relationship has broken down and is irreparable, but rather should take place in a timely fashion, after the mediator has identified the 55 London Drugs Ltd., [1974] 1 Can. L.R.B.R. 140 (B.C.L.R.B.) at Burlington Northern Airfreight (Can.) Ltd., [1986] O.L.R.B. Rep. Dec. 1628; Nepean Roof Truss Ltd., [1986] 86 C.L.L.C. 16,043 (O.L.R.B.).

21 21 stumbling blocks in the dispute and what is needed in order to avoid an irreparable breakdown in the collective bargaining relationship. 57 And even the more cautious approach to imposing arbitrated first contracts, which aims at replicating a typical collective agreement in the employer s industry can significantly alter the dynamics of collective bargaining. Such industry standard collective agreements though are usually the product of decades of bargaining in an industry and several rounds, at least, of collective bargaining between a given employer and a union. The ability of a union to get such an agreement in its first contract not by bargaining strength or skill but by having it imposed by law has had a marked effect on collective bargaining in the Canadian jurisdictions where first contract arbitration is available. This is the conclusion that emerges from an examination of the practical workings of first collective agreement arbitration from four important jurisdictions in Canada: the three provinces with the largest workforces and the federal jurisdiction. 4.3 First Contract Arbitration in Quebec The Quebec legislature introduced first contract arbitration into the province s Labour Code in with the stated aim of assisting parties whose bargaining efforts had failed or otherwise reached an impasse. The new provisions of sections 93.1 to 93.9 could be triggered at the request of a single party in order it was hoped- to foster industrial peace. Under ss to 93.9 of the Quebec Labour Code, binding first contract arbitration can be requested at any time after the parties have entered the statutorily-defined bargaining stage provided that the parties have previously attempted to resolve any difficulties with the assistance of a government-appointed conciliator. During this stage, which begins no later than 90 days after the date of a union s initial certification by the Quebec labor relations board, both parties are statutorily required to begin bargaining diligently and in good faith for the conclusion of a collective agreement. 59 At any time after the bargaining stage has begun, a conciliation officer 57 Yarrow Lodge and Bevan Lodge Corporation, [1993] B.C.I.R.B. D. 463 at p An Act to amend the Labour Code and the Labour and Manpower Department Act, S.Q. 1977, c Labour Code, s. 53.