Wednesday, January 19, 2011

Just cause dismissals

There is an interesting debate going on in the Edmonton Journal over the concept of just cause dismissals. Loosely, the doctrine of just cause says that employers who terminate the employment of a worker must provide reasonable notice (or pay in lieu of reasonable notice) unless the worker has done something so terrible that it is irreconcilable or inconsistent with continued employment and thus warrants immediate termination.

So if your employer catches you stealing, the employer knows you can no longer be trusted and out the door you go. On the other hand, if you make a mistake that isn't fatal to a continuing employment relationship, the employer must discharge you with notice or work with you to correct the error (a progressive discipline approach). Repeated failures to address the issue might then lead to a just cause termination.

Employer-side lawyer Howard Levitt, in an article originally printed in the Financial Post, suggests that the requirement that employers have just cause for terminating an employee is troublesome:

"The just cause requirement is one way unions erode the employer's control over the workplace. In a non-unionized workplace, the employee could be fired without any doubt or appeal. If there wasn't just cause for his dismissal, he would only receive severance pay."

This is partly correct. In a non-unionized workplace, an employee who has done something objectionable (but which does not meet the just cause standard) might well get let go with notice (or pay in lieu). More likely, though, the employer would simply fire the worker. If the termination was without cause and if the worker sought assistance through a provincial employment standards processes, the employer might well be on the hook for a few weeks of pay.

A worker with more resources might sue for wrongful dismissal and may, after a lengthy court battle, get a more generous settlement. But most of that will go to their lawyer. In effect, most workers under a common law contract of employment have few realizable rights in the event that an employer wants to terminate them--no matter how arbitrary or unfair the termination was.

Because of this (and other) examples of the power imbalance in employment, many workers have chosen to join unions and bargaining collectively. A significant difference between union and non-unionized employment is that, with a union, the remedy for an unjust termination is reinstatement (with backpay) rather than pay in lieu of notice.

This does, certainly, limit the employer's control over the workplace--arbitrary and unfair behaviour by the employer which significantly damages the worker is remediated more fully. Indeed, the threat of a meaningful remedy can well compel employers to act more carefully. This is the crux of the Alberta Federation of Labour's response.

The strategies Levitt suggests for handling just cause dismissal (when maybe the case isn't entirely open and shut) in unionized workplaces provide fascinating insight into the political economy of employment. He encourages employers to attempt to trap employees into conflicting statements of responsibility so as to undermine their credibility. He suggests carefully recording common and minor errors to create a pattern of misconduct to present to the arbitrator. And he suggests suspending a worker without pay so the worker starts to feel the pinch (and may even have found another job) and is thus more likely to accept a termination package.

None of these tactics is illegal. And they are all a rational way for an employer to advance its economic interests. That they come at the expense of the employee elicits no comment or consideration. Perhaps this lack of regard for the interests of workers is why workers often seek protection of a union?

-- Bob Barnetson

Friday, January 14, 2011

Asbestos and CNRL

I came across two interesting pieces this week. The first is a brief commentary by David Mandel addressing the conflicted position Quebec unions find themselves in regarding asbestos. While developed countries have sought to limit the use of this extremely hazardous material, Canada continues to export it to various developing countries.

Not surprisingly, workers in these countries are repeating the experience of workers in the developed worker during the 20th century: they are developing asbestosis, lung cancer and mesothelioma. And, given the toxicity of asbestosis, so are those who live or work around sites where the material is being used.

Quebec union federations gave a delegation of Asian unions and asbestos victims a cold reception in late 2010 when they came to Quebec. This delegation sought support for their request that public funds not be used to assist in the development of a new vein of asbestos in Quebec—the product of which would be exported to Asia.

This reception likely reflects the desire of unions to retain asbestos-mining related jobs for their members. Interestingly, these jobs pay poorly, entail exposing these miners to serious workplace hazards, and then inflicting this hazard on workers and citizens of the developing world. Canada’s asbestos industry has (ahem) a checkered past. Interesting how workers are now being co-opted to exploit other workers.

In other news, the CNRL explosion which injured five workers earlier this month has attracted some interesting commentary. Alberta Venture had some sharp comments about CNRL’s safety track record and its degree of engagement with the issue.

The Alberta Federation of Labour makes some salient points about CRNL’s safety record. CNRL has been charged in connection with four fatalities and three injuries since 2006. The AFL also comments on the government’s track record on investigating incidents:

"Nearly three years have passed since (two workers were killed in a tank collapse) and we still don't know what happened. We don't know what problems were at the root of the collapse and we don't what steps, if any, have been taken to fix those problems," said AFL President Gil McGowan.

The Minister’s statements on CNRL are interesting. Before explaining what OHS investigators are doing, he consoles the families of the victims and then proceeds to give the industry some political cover by touting its “excellent” safety record.

It is difficult to believe the Minister’s statement in July that (I’m paraphrasing) he is intent on ensuring workplaces are safe when his first reaction to a multiple-injury explosion is to point out how safe an industry is. This is particularly troubling given CNRL’s safety record over the past five years which includes a high (for Alberta) number of charges and an undetermined number of injuries.

-- Bob Barnetson

Friday, January 7, 2011

Saskatchewan 20 times more likely than Alberta to prosecute safety violations

Thursday, another five workers were injured at the CNRL Horizon site, south of Ft. McMurray. A coker unit appears to have exploded, leaving one worker with third-degree burns.

The government has made the usual response (stop work order, investigation). The government has begun taking criticism, with one group noting that Saskatchewan is more likely than Alberta to prosecute employers for injuries.

Saskatchewan has a workforce approximately one-quarter of the size of Alberta’s workforce. But Saskatchewan completed 47 prosecutions in the first nine months of the 2010/11 fiscal year. Alberta completed 11 prosecutions in 2010. Corrected for workforce size, this means Saskatchewan prosecutes at 20 times Alberta's rate.

The Calgary Herald is reporting that Alberta fatalities were also up in 2010 (111 to date), over 2009 (85 to the same point). These statistics have not appeared on the government’s website that I can find.

In this same article, Minister of Employment and Immigration Thomas Lukaszuk is reported to say workplace investigators forward cases to Crown lawyers for review but, as a politician, he can't press for charges, even when safety infractions are found.

It is fairly disheartening to hear the Minister effectively throw up his hands and say “I can’t enforce my legislation”. If I were an employer, I would take that as confirmation that there is almost no chance I will be prosecute regardless of what safety violations I may have.

This knowledge may explain the widespread violation of safety laws (e.g., in construction) and the hundreds of thousands of workplace injuries (reported and unreported) in Alberta each year.

Ontario has recently reviewed it OHS legislation. Given the widespread non-compliance in with Alberta’s safety laws, an independent review may be of use here as well--it appears public embarrassment is the only trigger for improving worker safety in Alberta.

-- Bob Barnetson

Thursday, January 6, 2011

AEG: Evading Contractual Obligations

The Alberta Enterprise Group’s report making recommendations about reforms in Alberta’s laws proposes eliminating successor rights provisions because they are, allegedly, economically damaging.

What are successor right provisions?
Section 46 of the Labour Relations Code ensures that union certifications and the resulting collective agreements survive changes in company ownership. Basically, employers cannot sell, lease, transfer, double-breast, or merge their way out of a collective bargaining relationship or contract they have signed with a union.

These provisions exist because employers have (and do) try to evade their legal obligations to workers in order to reduce their labour costs. AEG tries to frame the issue as one of ensuring labour market flexibility. But the actual issue is that AEG wants to give employers a way to nullify workers’ rights to join a union and evade the binding contracts employers have signed with those unions. The evidence provided by AEG that successor right provisions (or unionization more generally) is economically damaging is unconvincing.

Analysis or Ideology?
AEG’s “study” is simply another lobbying document that dresses up employer self-interest as analysis. This can be difficult to see because of AEG’s careful framing of the issues and the charged nature of labour relations in Alberta. But consider this statement from the report:

“Employment standards legislation governs such things as hours of work, the minimum wage, over time pay, and termination of employment. These standards reduce flexibility when they are overly prescriptive. For example, employment security provisions can make termination of employment prohibitively expensive for businesses and in that way can limit the ability of the labour market to adjust to economic changes.” (p.8)

In effect, what AEG suggests is that requiring a period of notice to workers that they will be sacked (or providing pay in lieu of notice) is too expensive for businesses. The maximum notice Alberta’s Employment Standards Code provides is eight weeks (if you have been employed for 10 or more years). While this does impose some costs on employers, it does so to provide workers with some buffer against termination on employer whim. And Employment Standards requirements cost employers nothing if they choose to plan their workforce reductions and give notice, rather than pay in lieu of notice.

Interestingly, AEG’s assertion re: the burdensome nature of employment standards ignores that minimum notice period required under Employment Standards is less than the “reasonable notice” requirements by the common law. That is to say, even if Employment Standards was eliminated, it would not reduce the employer’s obligation to provide reasonable notice under the common law. It would just make it harder for workers to collect what is owed to them because they would have to sue.

What this means is it is not nasty government regulation that makes it expensive to terminate workers, but rather judicial precedent. The underlying purpose of the doctrine of reasonable notice is that, when an employer repudiates a contract, the workers (who depend on the job to feed their kids), ought not be kicked to the curb to starve. Rather, they ought to get some compensation for the employer breaching their contract. But (apparently) AEG disagrees with holding employers accountable for their actions and to their contracts.

Overall, the analysis in AEG's report is poor quality. It is also self-serving. My assumption is that this report is intended to pressure the Conservative government (which is getting outflanked on the right by the Wild Rose) to further contract the statutory protections available to workers.

Yet is screwing workers really in the public interest? Or is it just in the craven political interest of AEG and its members? Thoughtful practitioners and policy makers are already dismissing AEG’s paper as meaningless. You should too.

-- Bob Barnetson

Wednesday, January 5, 2011

AEG and the End of Binding Rights Arbitration?

The Alberta Enterprise Groups’s report making recommendations about reforms in Alberta’s laws proposes eliminating regulations that can force the parties into final and binding arbitration when labour disputes arise. This is a bizarre recommendation and that deserves some unpacking.

Sections 135 and 136
The Labour Relations Code requires that every collective agreement have some means by which to settle disputes about the meaning or implementation of the agreement. If the agreement does not contain such a mechanism, the legislation imposes rights arbitration (i.e., a neutral third party hears the dispute and decides the outcome).

The requirement has its roots in the compromise struck between workers and employers during the second world war: workers agreed not to stop work (i.e., strike) during the term of a collective agreement and, in return, employers agreed to subject disputes to binding arbitration. There were other aspects to this agreement but these are the important dimensions for this discussion.

So let’s say AEG gets its way and the provisions about dispute resolution are struck from the Labour Relations Code. Soon enough an instance will come along where a collective agreement has no dispute resolution provision. There might not be one because the parties have always relied on the statutory provisions. Or an employer will refuse to negotiate one into a new agreement. Or an employer will force one out of an agreement.

Why would an employer do that?
Almost all grievances are filed by workers. This reflects one of the asymmetries of unionized workplaces. Employers interpret and administer the agreement and, if workers object, their unions file grievances.

When there are dispute resolution procedures, workers can have employer decisions that violate the contract overturned via arbitration (assuming the arbitrator agrees with them). If there are no provisions requiring arbitration, the employer then has the opportunity to simply deny the workers’ complaint and suggest the union bargain clearer language in the next round.

AEG vaguely discusses other means of dispute resolution, such as mediation. But without a binding means of dispute resolution, the worker must live with the situation until the next round of bargaining. And it is unclear that the union will choose to negotiate clearer language the next time (there are usually more important issues) and it is unclear the employer would agree to such language.

In effect, AEG is advocating workers can have rights under the contract but no means of remedy if the rights are violated. And, as we all know, rights without remedy for violation are no rights at all.

So what happens then?
Well, workers will likely do what they have always done when faced with a grossly unfair situation. They’ll resist. Some will do it covertly—by not working as hard or perhaps sabotaging or stealing. Others will resist publically—perhaps by quitting. But sooner or later an employer is going to do something egregious that will set a group of workers off. And those workers will put down their tools and stage a (illegal) mid-term strike.

But why should a mid-strike be illegal? The quid pro quo for not engaging in illegal strikes was that there would be some way to remedy violations of the contract. If AEG wants to get rid of mandatory rights arbitration, then the ban on mid-term strikes should go too.

Yet that isn’t in AEG’s proposals.

The reason this is missing from AEG’s proposal is because employers need the ban on mid-term strikes. Workers putting down their tools is a very effective weapon. A wildcat strike can seriously damage a company, especially in a just-in-time economy. And employers who have production process that cannot be easily (or even safely) stopped quickly would be incredibly vulnerable to threats of job action. There is lots of stuff that could go boom in Alberta if workers just walked away.

What does this tell us?
At a most basic level, this tells us that AEG’s proposals are not designed to create “balance” in the labour relations environment (as AEG purports). Rather, these proposals are designed to tip the balance in favour of employers by eliminating basic rights. And they do so by eliminating a statutory requirement that ensures that workers have a remedy when employers violate the contract. The more one reads, the more politically craven AEGs report appears.

Up next: Successor employer provisions and conclusions

Tuesday, January 4, 2011

Labour reform courtesy of the Alberta Enterprise Group

In December, the Alberta Enterprise Group released a report making recommendations about reforms in Alberta’s laws governing unionization and collective bargaining. In the next few posts, I will examine these recommendations in some detail. We’ll start with some basic background and discussion of AEG’s proposal regarding unionization votes.

Who is AEG?
AEG is a policy advocacy group that represents employers. It is funded by employers, its members are employers, its Board is populated by corporate big wigs and it clearly seeks public policy that advance the interests of corporate Alberta.

What does the AEG “study” recommend?
The “study” recommends altering Alberta’s labour laws. The proposed changes will make it more difficult for workers to form union, for unions to collect dues from members, and for unions to enforce worker rights. The proposed changes will also make it easier for employers to evade unions and the contracts they have signed with them through corporate maneuvering. How these recommendations jive with the AEG’s mandate to “promote policy fairness for all Albertans” is difficult to fathom.

How was the “study” conducted?
The “study” begins with a review of “the literature” about the effect of regulation of economic performance. In this case, “the literature” comprises eight studies which all support the unqualified conclusion that less regulation increases employment levels. This not a convincing or auspicious start.

The study then examines one aspect of Alberta’s regulatory framework: the laws governing unionization and collective bargaining. The “analysis” is thin and essentially regurgitates typical employer arguments in favour of American-style labour legislation. The study also contains the results of a telephone survey, which purport to support some of the conclusions advanced by AEG.

Unionization in Alberta
Workers who want to be represented by a union in Alberta typically sign petitions or buy membership cards. If 40% of the workers support the union’s application for certification, the Labour Relations Board (LRB) will conduct a vote of the workers. If greater than 50% of workers who vote support the union, the union is certified by the LRB and the employer must bargain with it.

AEG proposes several ways to make it harder for a union to be certified:

• unions must have 50% support to file an application (versus 40% now),
• the support must be a signed membership card with a $20 fee (versus signing a petition),
• at least 70% of eligible voters must vote (versus no quorum now), and
• employers must be able to argue against the union (which is precluded now) and have a minimum of three weeks to do so.

Many people will find these proposal not unreasonable. But let’s stop for a minute and consider why the rules (which are already the most employer-friendly in Canada) are what they are.

Threshold support
Unions must show at least 40% support among workers before applications are accepted to prevent spurious applications. Increasing the requirement to greater than 50% (an increase of 25%) will simply make it that much harder for workers to exercise their rights under the Labour Relations Code.

This difficulty will be compounded by doing away with petition evidence and requiring workers to drop $20 on a union membership card. There is no reason why workers ought to have to pay $20 each to exercise their right to have a vote except to discourage votes. There is hardly a flurry of spurious certification applications now.

This burden will be disproportionately felt by workers in low-wage jobs—those with perhaps the most to gain via unionization. Low-wage workers in Alberta are disproportionately immigrant, female and young. This hardly seems to “promote policy fairness for all Albertans.” Human rights complaint anyone?

Quorum and employer free speech
The proposal for a 70% quorum for votes to be valid is without merit. There is, for example, no minimum number of voters who must cast ballots in provincial or federal elections for those results to be valid. And those elections are much more important than a certification vote.

The reason for the 70% threshold is so create a further barrier to certification. When I worked at the Labour Board, I recall one employer sending two of his four employees out of town on the date of the vote so that (in his mind) it was not possible for a majority of the four-man unit to vote in favour of the union.

As it turned out, he should have read the current law more carefully (or at all). By requiring a majority of votes (not voters), the law precludes employer gerrymandering of elections. For this same reason, the current law limits employer “free speech” during certification drives.

This limitation reflects that there are important differences between political elections and certification votes. In a political election, free speech (theoretically) increases voter knowledge and has no coercive power. Workplaces are, however, not democracies. When the employer says “don’t vote for the union” or “the union will bankrupt us and you’ll lose your job” that information is both suspect and coercive. Instead, employers are told to let the workers make up their minds without being unduly influenced by the employer.

Why have votes at all?
An interesting question the AEG report side steps is why a union should have to show greater than 50% membership support and then face a vote? If the purpose of the AEG proposal is to ensure that a majority of workers wish to be represented by the union, surely the union should be automatically certified without a vote if more than 50% sign membership cards and give up $20.

AEG addresses this by suggesting union cards are not necessarily a good indicator of worker preferences (because workers might be pressured by the union to sign them). If cards are not a valid indicator of worker preferences, then why is AEG advocating using only signed cards as support for a membership application? And why is AEG advocating increasing the percentage of cards needed to start an application from 40% to 50%?

The answer is pretty obvious. Cards are harder to get than petition signatures, especially if you also need to get $20 out of a worker. And cards from 50% of the membership is harder to get than cards from 40%. So it will simply become harder to workers to get a vote and there will be fewer applications and fewer unionized workplaces. Again, this hardly seems to “promote policy fairness for all Albertans.” And it ignores that the purpose of the Labour Relations Code is to give workers a meaningful opportunity to exercise their rights.

Up next: Binding Arbitration