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Practical insight

Canadian lessons for American labour law
|Written By Henry Dinsdale and Jeff Goodman

There is renewed debate about labour law reform in the United States with the reintroduction of the Employee Free Choice Act (EFCA) in the U.S. Congress. The EFCA stalled in the U.S. Senate in 2007, but the political tide shifted with the election of President Barack Obama and a Democratic majority in Congress.

If passed, EFCA would change U.S. labour laws in several important ways, including amending the National Labor Relations Act (NLRA) to allow card-check certification, and permit firstcontract interest arbitration as a way to finalize a first collective agreement if the parties cannot negotiate one.

For Canadians, the debate over these issues is familiar. Labour law is largely a provincial matter in Canada, and our legislators have had a greater tendency to pursue creative legislative change than in the U.S. where the NLRA is a federal concern. Indeed, in Canada we have lived with many of the policy initiatives proposed by EFCA. As a result, Canadian labour lawyers and practitioners are in a unique position to provide practical insight into the EFCA.

Card-check certification allows a trade union to be certified as the exclusive bargaining representative of all employees in a bargaining unit, simply upon presentation of signatures on union membership cards for the majority of employees. This system of certification was the norm in Canada for many years. While there is little dispute that the card-check system resulted in more frequent and more successful union certification applications, it was a process distrusted by employers and often mired in delays and litigation.

In 1995, Ontario reformed the certification process to require a secret ballot vote to occur within five business days of a certification application. Now any disputes about the nature of a union’s proposed bargaining unit are decided by the Ontario Labour Relations Board after the ballots are cast and sealed in the ballot box. The integrity of the process is preserved by segregating disputed categories of ballots cast at the time of the vote. While the number and success rate of certifications have dropped somewhat under the vote system, there is more confidence in the process, lengthy campaigns are largely averted, and employees are empowered by virtue of the secret nature of their ballot.

Requiring a secret ballot vote in every case negates the spectre of pressure to sign, or refuse to sign, union cards. It enhances participation in the certification process because all employees are given the chance to participate, unlike card-check systems where the focus is on attracting just enough employees to meet a legislated threshold. Employers too are more likely to accept the union as the true representative of the employees after a secret ballot vote. First-contract work stoppages dropped considerably once the secret ballot process was introduced in Ontario. From the Canadian perspective, it is curious to see the U.S. heading down the seemingly antiquated path of card-check certification.

First-contract interest arbitration allows either party to apply for mandatory arbitration when negotiations have not resulted in agreement. This ultimately results in an interest arbitrator determining the unresolved bargaining issues and imposing the terms and conditions of the first collective agreement. First-contract interest arbitration has been part of Canada’s labour lexicon for nearly 25 years, but remains an unattractive alternative.

First-contract interest arbitration acts as a crutch for unions who cannot garner sufficient employee support for a strike. When an impasse is reached, the economic weapon of choice for trade unions is the strike. However, to strike effectively, unions need solid member support.

Arbitrated first collective agreements rarely result in stable collective bargaining relationships. The process tends to conceal the problems underlying the inability to conclude a first collective agreement and generally postpones the true test of a union’s employee support. In Quebec, for example, first-contract disputes referred to arbitration are followed by a second negotiated agreement less than half of the time, and less than a quarter are followed by a third collective agreement.

Successful collective bargaining relationships are predicated on free collective bargaining, meaning the parties are free to agree or not, provided they bargain lawfully. Unions and employers can use a wide range of lawful economic sanctions to attempt to compel agreement. Imposing, rather than negotiating, collective agreements has never been a preferred alternative and has not proven to be a reliable method of establishing stable labour relations in Canada.

The Canadian experience suggests that the policy approach that EFCA represents is largely out of date and should be revisited. Perhaps this issue is one for which our southern neighbours ought to look to Canada for guidance. IH

Henry Dinsdale and Jeff Goodman are partners in the labour and employment practice group of Heenan Blaikie LLP in Toronto.