Chapter 13: Working with Labour Unions
13.1 The Nature of Unions
Learning Objectives
By the end of this section, you will be able to:
- Be able to discuss the history of Labour unions.
- Explain some of the reasons for a decline in union membership over the past sixty years.
- Be able to explain the process of unionization and laws that relate to unionization.
A Labour union, or union, is defined as workers banding together to meet common goals, such as better pay, benefits, or promotion rules. In Canada, 28.8 percent of workers belong to a union, down from 37.6 percent in 1981.13 In this section, we will discuss the history of unions, reasons for decline in union membership, labour laws, and the process employees go through to form a union. First, however, we should discuss some of the reasons why people join unions.
People may feel their economic needs are not being met with their current wages and benefits and believe that a union can help them receive better economic prospects. Fairness in the workplace is another reason why people join unions. They may feel that scheduling, vacation time, transfers, and promotions are not given fairly and feel that a union can help eliminate some of the unfairness associated with these processes. Let’s discuss some basic information about unions before we discuss the unionization process.
History of the Labour Movement
In the late 1800’s, the employment relationship between workers and employers were defined by the “Masters and Servants Act”, which described its purpose as “the better regulations of servants, labourers and work people.” These laws upheld an employer’s right to demand obedience and loyalty from their employees; trade unions were illegal, and jail sentences of hard labour were used to enforce the Act. Employers were permitted to set all the terms and conditions of employment. Under the British North America Acts (BNA), the United Kingdom retained legislative control over Canada so UK laws were also Canadian laws. Trade unions were developed in Europe during the Industrial Revolution, when employees had little skill and employers had all the power, which resulted in employees being treated unfairly and being underpaid. With the development of a skilled worker class which formed craft guilds, some workers were able to drive wages in an industry up by restricting the number of people trained to do the job. This was the start of the labour union movement.
In 1872, 1500 workers in Hamilton Ontario defied the law and took to the streets to demand a reduction in the length of the workday, from 12 to 9 hours. This was an illegal strike and the first major organized protest of its kind in Ontario. While not immediately successful, it did influence Sir John A. Macdonald, Canada’s first Prime Minister, to pass the Trade Union Act of 1872 which allowed workers to join unions (however it was still illegal to strike). The legacy of the Nine Hour Movement is that it established a maximum workday, after which a worker would be entitled to “overtime” wages. The history of the labour movement in Canada is the history of worker’s rights in Canada. Canadian unions do not fight only for their members, but to establish minimum standards for all workers. In BC today, the standard workday is now 8 hours, after which workers are entitled to overtime pay. We have seen the establishment of pension plans, rest breaks, minimum wages, rules regarding payroll reductions, rules regarding terminations, and even our view of workers themselves evolve thanks to the lobbying and coordination by the labour movement. Rather than being viewed as an extension of factory machinery, or as obedient servants, the worker is now seen as a valuable partner to the employer, and entitled to a reasonable share of a business’s profits in exchange for their labour. It was only in 1944 that Canada required employers to recognize and negotiate with unions chosen by their employees, via an emergency order-in-council PC 1003 (essentially the same as the Wagner Act passed in the United States several years earlier). Finally, in 1948 the Industrial Relations and Disputes Investigation Act was passed, which forms the foundation of our provincial Labour Code. In 1945, Justice Ivan Rand developed the Rand formula, which requires all employees to pay union dues, whether or not the employees chose to be members of the union. This limited the desirability of “opting out” of unionization, which has the effect of stabilizing union membership and providing unions with financial security.
Many unions belong to the BC Federation of Labour, which is a provincial labour organization that lobbies for legislative changes with the provincial Employment Standards Act, Labour Code, or other provincial and territorial laws. They may also belong to the Canadian Labour Congress, a national organization that lobbies at the federal level. They describe their mandate as being “a positive force for democratic social change” through advocacy, education, and research.14 At the community level, there is usually a Labour Council which unions will belong to, and the goal of the local labour council is to improve connection between the labour movement and community members. Locals are the union groups that organize a specific worksite. Local unions focus on collective bargaining agreements and other labour concerns specific to the area. Every local union has a volunteer union steward who represents the interests of union members. Normally, union stewards are elected by their peers.
Current Union Challenges
The Labour movement is currently experiencing several challenges, including a decrease in union membership, globalization, and employers’ focus on maintaining nonunion status. As mentioned in the opening of this section, Canada has seen a steady decline in unionization rates, particularly in the 1980s and 1990s. Traditionally, industrial sectors such as forestry, mining, manufacturing and construction have been highly unionized; as we’ve seen employment in these occupations decline due to technology and globalization, it has impacted our national unionization rates. The public sector has also been an area of high unionization rates, and as municipal, provincial and federal governments have reduced staffing levels, this has impacted our national unionization rates as well. The unionization rate in Canada is much higher than that in the United States, most likely due to more worker-friendly labour laws.
Statistics on a worldwide scale show unions in all countries declining but still healthy in some countries. For example, in eight of the twenty-seven European Union member states, more than half the working population is part of a union. In fact, in the most populated countries, unionization rates are still at three times the unionization rate of the United States. [5] Italy has a unionization rate of 30 percent of all workers, while the UK has 29 percent, and Germany has a unionization rate of 27 percent.
Globalization is also a challenge for labour organizations today. As more and more goods and services are produced overseas, unions lose not only membership but union values in the stronghold of worker culture. As globalization has increased, unions have continued to demand more governmental control but have been only somewhat successful in these attempts. For example, free trade agreements such as the North American Free Trade Agreement (NAFTA) have made it easier and more lucrative for companies to manufacture goods overseas. For example, La-Z-Boy and Whirlpool closed production facilities in Dayton and Cleveland, Ohio, and built new factories in Mexico to take advantage of cheaper labour and less stringent environmental standards. Globalization creates options for companies to produce goods wherever they think is best to produce them. In 2012, Caterpillar closed its locomotive factory in London, Ontario, and relocated to Indiana, which had passed “Right to Work” legislation which makes union membership voluntary15. In 2015, Caterpillar announced it intends to move some of its production lines from Illinois to Mexico.
Human Resource Recall
When you are hired for your first job or your next job, do you think you would prefer to be part of a union or not?
There are a number of reasons why companies do not want unions in their organizations, which we will discuss in greater detail later. One of the main reasons, however, is increased cost, less flexibility and less management control. As a result, many companies prefer a union-free work environment. In doing so, they try to provide higher wages and benefits so workers do not feel compelled to join a union. Companies that want to stay union free constantly monitor their retention strategies and policies.
Current Labour Union Laws
Provincial and Territorial Labour Codes are administered by Labour Relations Boards. These Boards define the rights of employers and employees, define unfair labour practices, establish the process with which a union can be certified to represent a group of employees, establish rules for collective bargaining, strikes, lockouts and picketing, provide mediation and arbitration services, hear complaints and enforce the Labour Code.
The Unionization or Certification Process
There are one of two ways in which a unionization process can begin. First, the union may contact several employees and discuss the possibility of a union, or employees may decide to unionize on their own. The union will then help employees gather signatures to demonstrate that the employees want to be part of a union. The certification process itself depends on jurisdiction (provincial or federal), and varies amongst the provinces and territories. In British Columbia, the first step for a group of employees wanting to form a union is to establish an organizing committee. That committee then needs to determine whether they should form their own union, or join an existing union. The benefit of forming their own union is that the union will be completely responsive to the needs and desires of the employees at that particular work location. The advantage to joining an existing union is that the union can provide the organizing committee with a considerable amount of knowledge and support during the certification and collective bargaining process. Once they’ve made that decision, the contact the BC Labour Relations Board (BCLRB) to indicate their intention. This starts a 90 day window, and during that time the organizing committee must get a minimum of 45% of the employees to sign a card assigning their bargaining rights to the union. Once the mandatory number of signatures have been collected, the cards are sent to the BCLRB, which verifies the cards by comparing them to a list of current employees. In industries with high amounts of turnover, achieving 45% of current employees can be a challenging task. If the organizing committee satisfies the requirement to demonstrate support for a union, the BCLRB will call a vote within 10 days. At least 55% of the employees must participate in the vote for the vote to be valid; this ensures that the outcome of the vote represents the desires of the majority. Of the employees who participate in the vote, the majority of them must vote for the union in order for the union to become the legally recognized bargaining agent for that workplace.
In previous chapters, we have mentioned that certain industries (chartered banks, airlines and airports, media and communications companies, Canada Post, interprovincial shipping and transportation companies, among others) fall under federal jurisdiction. The process is slightly different for these workplaces. In addition to working with the Canada Labour Relations Board, the organizing committee has six months to gather the required support for certification, but in addition to signing cards each of the employees must also pay $5. However, only 35% of the employee signatures are required, compared to 45% in BC provincial jurisdiction, and if more than 50% of the employees sign cards, the union can be automatically certified without a vote.
Once the Labour Board is involved, there are many limits as to what the employer can say or do during the process to prevent unionization of the organization. Employers must not engage in unfair labour practices. It is advisable for HR and management to be educated on what can legally and illegally be said during this process. It is illegal to threaten or intimidate employees if they are discussing a union. You cannot threaten job, pay, or benefits loss as a result of forming a union. Figure 13.5 “Things That Shouldn’t Be Said to Employees during a Unionization Process” includes information on what should legally be avoided if employees are considering unionization. Managers may provide factual information that is supported by data, but should avoid providing their opinion or uttering any statement that could be perceived as a threat.
Unions believe that it is in the best interest of workers to be represented by a union, and will occasionally engage in campaigns to encourage workers to join. The United Food and Commercial Workers (UFCW), for example, has a “Wake Up Walmart Campaign” that targets the labour practices of this organization.
Who Forms the Bargaining Unit?
Not all employees at a company will become members of the bargaining unit. Sometimes the employer and union will disagree on who should be included, or who should be excluded from the bargaining unit. In this case, both parties will make their case to the Labour Relations Board, and an Arbitrator will make a decision after considering four factors:
- Management employees are generally excluded from union membership. A “manager” is anyone who has access to confidential labour relations information, or financial or strategic information that could compromise the employer’s position in collective bargaining. Generally Directors, employees who work in Human Resource departments, and Financial Officers are excluded from the bargaining unit. Sometimes front line supervisors are included in the bargaining unit, but generally these supervisors are unable to make independent decisions about hiring, firing and discipline without the approval of another manager or Human Resources.
- Employee wishes – if a particular group of employees does not want to join the union, their wishes will be considered and weighed against the other three factors.
- Community of Interests – employees in a bargaining unit should have similar terms and conditions of employment, so at the bargaining table the members have similar interests. Sometimes you will see different groups of employees being represented by different unions, because they do not share a community of interest. For example, if warehouse workers want to unionize, the office administrative staff may not share a community of interest because they work different hours, don’t have to do physical work, don’t have to do outside work, may have different educational requirements to be hired, etc.
- Employer Structure – Do employees work at the same location, or separate locations? If separate, what is the distance between them and how often do they interact? Do they share a common supervisor or management structure? For example, a business in Prince George may also have an office in Vanderhoof; those employees may report to the Prince George supervisor, and it would make sense to consider them all one bargaining unit. But that same company may have offices in Vancouver, and it may make less sense to treat them all as one unit.
Unions at the College of New Caledonia
Unions at the College of New CaledoniaThe College of New Caledonia (CNC) has its main campus in Prince George, B.C., but also has satellite campuses in Quesnel, Mackenzie, Vanderhoof, Fort St James, and Burns Lake. There are two unions at CNC. Operational staff are members of CUPE. Operational staff include anyone who helps make the college run, other than faculty and management. These employees ensure that the power and lights are on, the campus is clean, that your registration forms are processed, monies collected, and also provide a myriad of student support services. Faculty are members of the Faculty Association. All Faculty at all campuses belong to the same union – their working conditions and shifts are similar, they report to a common management structure, and the campuses are not so far apart that they would be considered separate entities. Administration is excluded from union membership, because they have access to sensitive information and make decisions about staffing levels, strategy and finance. Administration includes the Deans, the Human Resources Office, and Executive (President, Vice President, Chief Financial Officer, etc).
Embracing or Avoiding Unionization
In Canada, many employers in heavily unionized industries accept unionization as inevitable. Other employers attempt to provide competitive wages, safe working conditions, good benefits packages and fair leadership so that employees won’t be interested in joining a union. Unions can impact a company’s profits because they tend to drive up total compensation, particularly benefit packages. They can have an impact on staffing and selection processes, performance management procedures, as well as the discipline and termination process.
Some employees prefer not to work in an unionized environment, as well. Some of those reasons include:
- Union dues are costly.
- Employees could be forced to go on strike.
- Employees and management may no longer be able to discuss matters informally and individually.
- Individual issues may not be discussed.
- Many decisions within a union, such as vacation time, salary and promotions, are based on seniority only.
Fortune 500 Focus
Perhaps no organization is better known for its antiunion stance than Walmart. Walmart has over 3,800 stores in the United States and over 4,800 internationally with $419 billion in sales. [8] Walmart employs more than 2 million associates worldwide. [9] The billions of dollars Walmart earns do not immunize the company to trouble. In 2005, the company’s vice president, Tom Coughlin, was forced to resign after admitting that between $100,000 and $500,000 was spent for undeclared purposes, but it was eventually found that the money was spent to keep the United Food and Commercial Workers union (UFCW) out of Walmart [10](he was found guilty and sentenced to two years of house arrest).
Other claims surrounding union busting are the closing of entire stores, such as the Jonquiere, Quebec store which was closed after being certified, and the Walmart Tire and Lube Express department in Gatineau, Quebec, [11] when discussions of unionization occurred. Other reports of union busting include the accusation that company policy requires store managers to report rumors of unionizing to corporate headquarters. Once the report is made, all Labour decisions for that store are handled by the corporate offices instead of the store manager. According to Labour unions in the United States, Walmart is willing to work with international Labour unions but continues to fiercely oppose unionization in the United States. In one example, after butchers at a Jacksonville, Texas, Walmart voted to unionize, Walmart eliminated all US meat-cutting departments.
A group called OUR Walmart (Organization United for Respect), financed by the United Food and Commercial Workers* (UFCW) union, has stemmed from the accusations of union busting. Walmart spokesperson David Tovar says he sees the group as a Trojan horse assembled by Labour organizations to lay the groundwork for full-fledged unionization and seek media attention to fulfill their agenda. While the organization’s activities may walk a fine line between legal and illegal union practices under the Taft-Hartley Act, this new group will certainly affect the future of unionization at Walmart in its US stores.
*Note: UFCW was part of the AFL-CIO until 2005 and now is an independent national union.
Key Takeaways
- Union membership in Canada has been slowly declining. Today, union membership consists of about 28.8 percent of the workforce, while in 1981 it consisted of 37.6% of the workforce.
- The reasons for decline are varied, depending on whom you ask. Some say the moving of jobs overseas is the reason for the decline, or reductions in the numbers of government employees, or the use of technology which has also reduced the number of employees required in manufacturing, mining and forestry.
- The labour movement is responsible for many of the working conditions we take for granted today, such as an 8 hour workday and overtime pay.
- The United States has a low number of union members compared with other countries. Much of Europe, for example, has over 30 percent of their workforce in Labour unions, while in some countries as much as 50 percent of the workforce are members of a Labour union.
- The LABOUR RELATIONS BOARD is the overseeing body for labour unions, and it handles disputes between companies as well as facilitates the process of new labour unions in the developing stages. Its job is to enforce the labour code. Each province and territory has its own Labour Board and Labour Code, in addition to the national Labour Board that governs unions and employers in industries that fall under federal jurisdiction.
- To form a union in BC, the organizers have 90 days to collect signatures from 45 percent of the employees in the proposed bargaining unit. If this occurs, the BC Labour Relations Board will facilitate a card check to determine the signatures are valid. If they are valid, a vote will be called within 10 days, 55% of all employees must participate in the vote and the majority must vote for the union in order for it to be certified. The employer and union must then negotiate in good faith.
- To form a union in a federally regulated industry, the organizers have 6 months to collect signatures and $5 from 35 percent of the employees in the proposed bargaining unit; if more than 50% of the employees indicate their support for the union, it can be certified without a vote.
- Unions affects costs and operations, including staffing and selection practices, promotions, performance measurement, discipline and termination, and pay and benefits. Some companies will try to prevent a union from organizing in their workplace.
- In order to determine an appropriate bargaining unit, the Labour Board will hear arguments from the union and employer, and then make a decision after considering four factors: Management, Employee Wishes, Community of Interest, and Employer Structure.
Exercises
1: Visit the BC Labour Relations Board website. View the Decisions section and look at “Leading LRB Decisions”. Pick one of them, and determine why the decision is so important. Discuss it in at least two paragraphs, stating your opinion on this case.
2: Would you like to work in a unionized organization? Why or why not? List the advantages and disadvantages of unions to the employee and the company.
[1] “Union Members: 2010,” Bureau of Labour Statistics, US Department of Labour, news release, January 21, 2011, accessed April 4, 2011, http://www.bls.gov/news.release/pdf/union2.pdf.
[2] “Teamsters Escalate BMW Protests across America,” PR Newswire, August 2, 2011, accessed August 15, 2011, http://www.teamster.org/content/teamsters-escalate-bmw-protests-across-america.
[3] Gerald Friedman, “Labour Unions in the United States,” Economic History Association, February 2, 2010, accessed April 4, 2011,http://eh.net/encyclopedia/article/friedman.unions.us.
[4] Claude Fischer, “Why Has Union Membership Declined?” Economist’s View, September 11, 2010, accessed April 11, 2011,http://economistsview.typepad.com/economistsview/2010/09/why-has-union-membership-declined.html.
[5] Federation of European Employers, “Trade Unions across Europe,” accessed April 4, 2011,http://www.fedee.com/tradeunions.html.
[6] “Federal Judge Orders Employer to Reinstate Three Memphis Warehouse Workers and Stop Threatening Union Supporters While Case Proceeds at NLRB,” Office of Public Affairs, National Labour Relations Board, news release, April 7, 2011, accessed April 7, 2011,http://www.nlrb.gov/news/federal-judge-orders-employer-reinstate-three-memphis-warehouse-workers- and-stop-threatening-un.
[7] Change to Win website, accessed April 7, 2011, http://www.changetowin.org.
[8] “Investors,” Walmart Corporate, 2011, accessed August 15, 2011,http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-irhome.
[9] “Investors,” Walmart Corporate, 2011, accessed August 15, 2011,http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-irhome.
[10] Los AngelesTimes Wire Services, “Wal-Mart Accused of Unfair Labour Practices,” accessed September 15, 2011, http://articles.latimes.com/2005/apr/13/business/fi-walmart13.
[11] UFCW Canada, “Want a Union? You’re Fired,” n.d., accessed August 15, 2011,http://www.ufcw.ca/index.php?option=com_multicategories&view=article&id=1935&Itemid=98&lang=en.
[12] “Union Push in For-Profit Higher Ed,” Inside Higher Ed, May 24, 2010, accessed August 15, 2011, http://www.insidehighered.com/news/2010/05/24/union.
