Stephen Harper’s government has interpreted the rule of law rather flexibly in the arena of labour relations. In just six months in power, the Conservative majority has intervened three times to end or prevent work stoppages.
The first instance was in June, when Labour Minister Lisa Raitt announced, after less than one day of picketing, that she would forcibly end a strike by Canadian Auto Workers members at Air Canada. The two sides settled, sending one outstanding item, pensions for new hires, to arbitration. She established what we could call Raitt’s First Principle: Even at private non-monopoly companies, government can ban strikes.
Later that month, Ms. Raitt waded into the Canada Post dispute. It was management (not the union) that locked everyone out and closed the doors. But that was enough pretext for Ms. Raitt to legislate the posties back to work, imposing wages lower than what management had already offered. Raitt’s Second Principle was established: Government can explicitly dictate wage settlements.
In October, she pushed the legal boundaries even further, calling in the labour board to pre-empt a CUPE strike at Air Canada, laughably worrying about the “health and safety” of the travelling public. (Too much airport coffee in the tummies of stranded passengers?) She also invoked her government’s “strong mandate” from May’s election, when the Conservatives won 39.6 per cent of the vote. Raitt’s Third Principle is actually a blank cheque: Government can simply prohibit any work stoppage it wants to.
Each case represented an audacious willingness to intervene in labour-management relations, even at private companies. Each case moved the goalposts a little further. And now Ms. Raitt has speculated about amending the labour code so that the economy itself is defined as an essential service. That would codify Raitt’s Third Principle, giving government the explicit right to ban any work stoppage it deems damaging.
Of course, which work stoppages are or aren’t prevented will remain a matter of judgment. Imagine if all work stoppages were prohibited – lockouts, as well as strikes. All disputes would then be settled by binding arbitration, as currently occurs with true essential services, like police and hospitals. But employers don’t want that approach, fearing that arbitrators may occasionally side with the union. The arbitrator in the Air Canada-CAW case did exactly that, sparking a bizarre decision by the company to appeal his “final and binding” judgment to the courts (an appeal since abandoned, wisely).
When employers hold the better cards, as they do in today’s unforgiving labour market, they happily go for the jugular – work stoppage or not. Consider another epic dispute that ended last month: the 50-week lockout at the United States Steel Corp. factory in Hamilton. The company starved out the union with far-reaching demands to gut pensions and other long-standing provisions. The economic cost of that bitter, lopsided dispute didn’t slow the company, nor did it spur any level of government to action.
I estimate that the direct loss to GDP resulting from the lockout in Hamilton was four times larger than the effects of a one-week full shutdown at Air Canada. Indirect spinoff losses made the steel lockout even more painful. If government were truly concerned with “protecting recovery,” why didn’t it intervene? True, steel falls within provincial (not federal) labour jurisdiction. But Ottawa had plenty of leverage if it wanted to act – not least U.S. Steel’s galling violation of the production and employment commitments it made when it took over the former Stelco Inc.
In Hamilton, where workers held little power, the government stood idly by. It seems it’s only when workers have some leverage that it acts powerfully to “protect the economy.”
There’s no doubt Ms. Raitt’s actions were popular with many. And there’s no doubt work stoppages cause inconvenience and disruption. But because something is unpopular or inconvenient hardly gives government the moral authority to take away rights, making up the law as it goes – even if it does hold a majority of seats in Parliament.
Jim Stanford is an economist with the Canadian Auto Workers union.