Tuesday 29 November 2016

The Decline of the Defined Benefit Pension Plan

The defined benefit pension plan ("DBP") is becoming an endangered species in Canada. In 1977, 48.4% of working men had a defined-benefit pension plan; in 2011, that had dropped to 25.4%. The decline was less dramatic among women, though the percentage started out lower - 34.% of women had a DBP in 1977, which fell to 31.1% in 2011. The fact that more women than men now have DBPs is related to the decline of employment in heavy industry and manufacturing in the private sector, and the generally strong representation of women in the public sector. However, the future even of the previously-sacrosanct public sector defined benefit pension seems to be in question.

As I noted last time, the City of Saskatoon has moved away from a traditional defined benefit plan - one where the employer is ultimately responsible for the pension benefits of retired employees - to a plan with a "cap" on employer and employee contributions. (The ATU has described this as a "defined target" plan; as I mentioned last time, I'm not sure labels matter, but there's no question the changes to the City pension plan are a move away from what has traditionally been described as "defined benefit". It's probably safe to call the new City plan a "defined target" plan. If you don't feel like wandering through my last post, here is a link with some admittedly brief definitions of the different kinds of plans.)

There also appears to be an outstanding grievance filed by ATU regarding the pension plan changes. The Union's offer to settle includes (unsurprisingly) that if the ATU's grievance is successful, then the City would remain responsible for making up any shortfall in the City pension plan. If the grievance fails, then the ATU would, more or less, accept the City's offer regarding the pension plan.

In the meantime, the ATU has commenced an overtime ban to put pressure on the City to settle. We'll have to see how the City responds. A lockout, or partial lockout, may be a possibility; so might a simple "wait-and-see" approach. We'll also have to see where the blame lands - who the public holds accountable for the service disruptions.

And it's been four years since the last contract expired. It appears that defined benefit plans have recovered somewhat since 2012 - see for example this 2014 presentation by the Financial and Consumer Affairs Authority on the recovery of defined benefit plans, or this 2013 article at Benefits Canada. That said, it's possible that part of that recovery is due to increased member contribution rates - and certainly, that's the position the City has taken regarding its pension plan (i.e. that the relative health of the plan now is due to the now-increased contribution rates).

But the City of Saskatoon, obviously, isn't the only employer seeking changes to its defined benefit pension plan. Indeed, the changes the City is seeking are relatively modest, compared to what's going on in other industries. The City of Saskatoon, to be clear, isn't moving to a "defined contribution" plan, nor is it seeking to implement a two-tiered benefit scheme. Therefore, most of what follows is about the general context across Canada - not about the City of Saskatoon specifically.

But when taken in that broader context, perhaps ATU's reluctance to accept changes to the City pension plan makes more sense. That doesn't automatically make them right, and  it doesn't mean that their resistance will yield the results they want. But it might make the union's position more understandable.

"Defined benefit" pension plans are one of the current battlegrounds for labour, as unions struggle to maintain existing plans, and employers pursue strategies to change from "defined benefit" to either "defined contribution" or "defined target" pension plans. We saw that in the public sector  last summer in the Canada Post negotiations and threatened lockout (where the employer eventually backed down on that issue).

Defined benefit plans are not without their critics, of course. See here for Prof. Michael Armstrong's op-ed on the risks of DBPs - for instance, they're at risk if an employer goes bankrupt, and they tend to penalize workers who change jobs.

In the private sector, the the last round of bargaining (in 2012) between Canadian auto workers and their employers saw the introduction of a "hybrid plan" which had some elements of defined benefit and some of defined contribution.  In the latest (2016) round, even that seems to have been negotiated away for new hires in the agreements struck between UNIFOR and General Motors, Ford Canada, and Fiat Chrysler.  The existing plan would continue to apply to existing employees, but new hires in the Big Three's Canadian operations would seem to move to a strictly "defined contribution" model - introducing a more stark "two-tiered" model (where newer, younger workers are paid on a lower wage scale, and get fewer/lower benefits, than more senior, older workers).

The defined contribution model involves employees and employers both paying into the plan at set rates, but as with an RRSP, a defined contribution plan's payout is dependent on the market. In other words, there's no guaranteed monthly payment upon retirement, unlike in a defined benefit plan. There's much less security here for the retiree, but also no ongoing risk for the employer. Hence, there is a strong move afoot among many employers to shift from a defined benefit plan (where they must guarantee, wholly or in part, the pension payments) to defined contribution plans (where the risk falls upon the employee).

Sometimes this is pursued wholesale; often, an employer with an existing plan will retain the defined benefit plan for existing workers, but will seek to implement a defined contribution plan for new workers (as with the UNIFOR/GM deal, among many others). 

Such changes aren't universally welcomed, of course. In the UNIFOR/GM deal, for instance, the vote by GM workers to accept the new contract - which, in fairness, also guaranteed continued investment in Canadian plants - was successful with a relatively anemic majority of 64.7%. At Fiat Chrysler support was a bit stronger, with 70.1% of workers voting to accept the new contract. Meanwhile at Ford Canada, the deal barely passed with approximately 58% of workers voting to accept. But the contracts were ratified nonetheless; and when the Big Three auto manufacturers, who have historically been part of the "gold standard" for workplace pensions and benefits in the private sector, move away from a defined benefit plan, it's a signal that other plans aren't safe.

The public sector isn't immune to such changes, either. The pension issue is almost certainly going to rear its head at Canada Post in the next couple of years. The federal government has recently introduced legislation that would allow for "defined target" plans; PSAC, at least, has described this move as an "attack" on pensions.

(This is under the leadership of Finance Minister Bill Morneau - the same Bill Morneau, of course, who was a principal of one of Canada's leading human resources consulting firms; who told workers that they should just "get used to" short-term employment; and whose own defined benefit MP pension, provided he's re-elected, seems to be doing just fine, thankyouverymuch.)

Meanwhile other employers - like the City of Saskatoon - in both the private and public sector are seeking to impose caps on employer contributions to a plan. As I mentioned in my last post, that leaves open the possibility of reduced pension benefits for retirees if the plan under-performs. At the same time, the public sector does have a different dynamic than, say, the auto makers, because it's the taxpayers who ultimately are on the hook (though private employers will tend to pass on costs, such as increased pension contributions, to their customers, too).

Unions are often criticized when they agree to move from a defined benefit to defined contribution  or defined target plan. Regarding the recent deal between UNIFOR and GM, see here for a general criticism of "concession bargaining" and two-tiered wage and pension structures , here for a more academic Q&A between Andrew Langille and Michael Mac Neil on the issue of two-tiered entitlement schemes, and finally here where the UNIFOR/GM deal is called a "stake through the heart" of company pensions. UNIFOR, in fairness, says that the GM deal (and the others) secures jobs and investment in Canadian plants. Notably, nobody seems to be going after the employers overmuch for aggressively pushing these changes - perhaps because we simply expect employers to act in this manner.

In any event, whether you agree or disagree with ATU's stance, and whether or not the ATU members get what they want in this contract negotiation, it might make more sense when considered in the broader national context - as part of the overall struggle by unions against the decline of the defined benefit pension.

Monday 10 October 2016

Saskatoon Transit: Pension Palaver

Three weeks ago, Amalgamated Transit Workers Local 615 - which represents transit workers for the city of Saskatoon - served the City with the statutory 48 hours' notice of strike action, as required by The Saskatchewan Employment Act. It seems only right that, since this blog started with the Saskatoon Transit Lockout of '14, it continue with the Saskatoon Transit Strike of '16.

...Except there's no strike, yet. While the ATU is now in legal strike position, it appears that bargaining between the Union and the city is reconvening on October 11th, (tomorrow!) and that there will be no job action taken until then. If bargaining doesn't go well, it's possible that the ATU will take job action other than complete withdrawal of services, such as transit employees refusing to wear their uniforms (as they did back in March), a ban on working overtime, rotating strikes, and so on - though a full-on withdrawal of services would be legal, and a possibility.

Bus Riders of Saskatoon, a local group that "advocates for better public transit in our city,"  hopes that the parties can come to an agreement.  I recently opined that this disagreement between the City and ATU may be difficult to resolve without a strike or lockout, but (as a citizen, taxpayer, transit user, labour law wonk, union member, and all-around nice guy) I hope that the City and the Union can come to an agreement and prove me wrong.

...within reason.

The main barrier to reaching an agreement, according to both sides, is the proposed changes to the City's pension plan (which I'll refer to as "the Plan"). There are, of course, any number of issues that must be dealt with in collective bargaining; but both sides seem pretty clear that the pension changes are what's stopping them from reaching a deal.

[Caveat: Before I go any further, I'll note that all of what follows is based on public statements and documents from the City and from the ATU. I haven't spoken to anyone from either side, nor do I have any particular knowledge of what's going on behind closed doors or at the bargaining table.]

For what it's worth, the City's final offer regarding wages - 10% total over four years - seems to be in the ballpark for public sector unions in Saskatchewan. In their most recent round of bargaining, Saskatoon employees represented by CUPE Local 59 accepted the same offer - 10% over four years;  Saskatoon firefighters bargained, in total, a 20% increase over six years; Saskatoon police bargained wage increases of 11% over three years; and Regina Transit negotiated a wage increase of 6% over three years with its workers.


There's been some argument over whether the change amounts to turning the plan from "defined benefit" plan into a "defined target" plan, but I'm not sure that labels or definitions really matter in this scenario. ("A rose by any other name..." and all that.) If you're interested, here's a quick set of definitions of each type of pension plan, from the Globe & Mail back in 2014, when the federal government was seeking to shift some public employees' pensions from a defined benefit plan to a defined target plan.

But the problem here - labels notwithstanding - is, simply, that the City and the ATU don't accept each others' numbers. They don't agree on whether the Plan has to change and, in particular, on whether a "contribution cap" is the kind of change needed.

The City's position is that the City of Saskatoon General Superannuation Plan - i.e. the pension plan for all City employees who aren't covered by the police or firefighters' pension plan - needs to be changed to protect the Plan's long-term health. Changes include an increase to the percentage of an employee's earnings that are contributed to the plan, an increase to the retirement age, and a cap on the City's "administration fees" (i.e. those fees relating directly to the City's costs of administering the plan).  Every other municipal union involved in the plan has signed on to the changes, except ATU, and the City isn't willing to carve out an exception for transit workers.

The Union's position is that the pension plan is in good shape, that the City has provided incorrect or misleading information regarding the health of the plan (and, by implication, that the other municipal unions have accepted a bad deal) to justify changes that aren't required, and that there are other ways to deal with the Plan.

ATU says it has an actuarial report that backs up its position. The City, meanwhile, responds that the Union's report is operating with the benefit of hindsight - that the Plan is in good shape now because of the changes agreed to by the other unions.

[Another caveat: I am not an actuary, nor an expert on pension law, and so I am in no position to judge on whether the City or the Union - or both, or neither - is correct on whether the pension changes are necessary for the long-term health of the pension plan.]  

Right, so. The main issue here, as far as ATU is concerned, is that the new language puts a "cap" on contributions to the plan. That means that, bluntly, if the Plan performs badly in the future, pension benefits might be reduced. Other changes (such as the increase in retirement age) seem to be less controversial - or, at least, has not been the focus of ATU's criticisms.

The language that the ATU apparently takes issue with is found at p. 14 of the City's final offer. (The actuarial report commissioned by the Union, which questions the City's financial statements, is available online, here.  The actual changes to the pension plan that the City seeks are found in the City's final offer to the Union, on pp. 12-15. And the pension plan itself, including many of the changes agreed to by other City unions but not by ATU, is here (Article 1.04(10) summarizes the changes stemming from the last round of bargaining.)

On a very basic level: Under the Plan, each employee contributes a percentage of his or her "earnings" to the Plan. The City matches that contribution. When an employee retires, he or she gets a monthly pension payment from the Plan's fund.

Prior to the last round of bargaining, if the Plan performed poorly and the fund couldn't pay retirees' pensions, either the City and its unions would have to negotiate increased contribution rates, or the City (and therefore taxpayers) would have to step in to make up the shortfall. Under the new language, contributions are "capped" at 9.0% of earnings (they're currently at 8.8% - see Art. 4.01 of the Plan). If the Plan performs so badly in future that it can't fund pension payments even after an increase in contribution rate to 9.0%, then benefits will have to be cut - since the parties have agreed not to increase contributions any higher. (See p. 14 of the City's final offer.)

(The contribution rate can increase to as high as 9.5% temporarily, but that can only last for up to six years, and the overall "target" of the plan is to have a maximum contribution rate of 9.0%. In any event, that doesn't seem to be an immediate risk.)

 That's one sticking point for the ATU. There's another: if the City and its unions can't agree on what benefit reduction is required, then an arbitrator will be appointed, will review submissions from all involved, and then make a decision on what is required to keep the plan solvent at a 9.0% contribution rate. So, whether by negotiation, or by a binding decision by a third party arbitrator, the 9.0% cap will be enforced.

The changes wouldn't seem to affect those who have already retired, or those who retire prior to the changes being made - the proposal states that any such changes to benefits would fall upon future service, and Section 14.01(1) of the Plan sets out that changes to the Plan, unless otherwise specified, only affect retirements on or after the date of the change. But it looks like the proposed changes could affect those who retire after the change is implemented (as you would expect - otherwise what would be the point of the changes?).

Now, to be clear: nobody is going to lose their pension. And the changes aren't anywhere near as stark a difference as moving from a "defined benefit" plan (where the employer is usually on the hook to make up any shortfalls in the fund) to a "defined contribution plan" (where the fund operates much like an RRSP - both parties pay in, but there's no guaranteed payout upon retirement). Retirees will still get whatever level of pension benefit would be sustainable at a contribution rate of 9.0%, in the long term. And there's no suggestion at this point that there's any immediate risk of contribution rates having to increase from their current levels.

(There's nothing saying the Plan can't be further amended in the future, either. But of course it's harder to bargain away from a contribution cap once a cap has been agreed to.)

Both sides face challenges here. One, if the City concedes and carves out a pension deal for ATU - one different from what the other city unions have accepted - it will almost certainly lead to labour relations problems. Either: the other unions agree (as they seem to) that the Plan changes are necessary, and will have real concerns about one union, ATU, not "pulling its weight" in funding the Plan; or, the other unions (or their members) will feel that they got a bad deal in bargaining, and will demand the same deal as ATU next time around. For a sizeable employer like the City, with multiple unions and bargaining units to deal with, neither option is a good one. From the City's perspective, a different deal for ATU is likely a non-starter.

Two, the Union has taken a vocal, public, and uncompromising stand against the pension changes.  ATU membership seems to be behind its leadership (of those ATU members who voted, 92 per cent voted not to even consider the City's offer). This makes it difficult for the ATU bargaining committee to compromise on this issue and, specifically, to accept the same deal as the other city unions. The ATU's press releases have suggested that it's proposed alternatives, but those don't seem to be available online - and are probably moot in any event since, as I mentioned above, the City isn't going to want to have a different deal for ATU.

(...Given the current election, I'm also skeptical that any mayoral candidate or City Council candidate has "the answer" to this dispute, by the way.)

So - to bring this to a conclusion - nobody disputes that the City's proposal contemplates that pension benefits might be reduced sometime in the future, or that contributions might increase (slightly) from their current level.

But the City insists the specific changes it's put forward are necessary for the long-term health of the Plan, and it's entirely understandable that the City is reluctant to carve out an exception for transit workers when every other municipal union covered by the Plan has agreed to the changes.

The ATU, meanwhile, appears convinced the City is either wrong or, worse, lying about the numbers, and that the changes aren't necessary, and has taken a strong stance against the proposed changes.

And when you have entrenched, seemingly irreconcilable positions, that makes it difficult - but not impossible - to conclude a deal.

Wednesday 6 July 2016

You Don't Have to Unionize but you Can't Stay Here: Supervisory Employees and the Saskatchewan Employment Act

[I've also posted this to the Usask Law Blog.]

The City of Moose Jaw recently made an application to the Labour Relations Board to remove "supervisory employees" from the existing bargaining unit of city employees. The Saskatoon Public Library made noises about doing the same thing in March and it appears that the Library has now commenced its own application. (I was recently interviewed  on this issue.)

These two employers - with, one assumes, more to come - have taken this action because The Saskatchewan Employment Act, proclaimed on April 29, 2014, set out that "supervisory employees" could not be included in the same bargaining unit as those employees they supervise. That provision, however, did not take effect until April 29, 2016; and now employers seem to have decided that it's in their best interests to attempt to have supervisors removed from the bargaining units in which they've operated for a number of years.

(A good, quick summary by employer counsel Kevin Wilson, Q.C., can be found here.)

I should note that this is all contingent on these supervisors being found to be "supervisory employees" under the statute. Most of them, I would imagine, probably are; there may be some edge cases where someone who is ostensibly a "supervisor" isn't a "supervisory employee" under the Act. That's not something I can comment on in these particular cases. But the definition of "supervisory employee" is pretty broad - "assigning hours of work and overtime" seems to include schedulers, for instance, who are only "supervisory" by the most tenuous definition.

The statutory language in the SEA is as follows, and it's unique in Canada:

6-1(o) "supervisory employee" means an employee whose primary function is to supervise employees and who exercises one or more of the following duties:

(i) independently assigning work to employees and monitoring the quality of work produced by employees;

(ii) assigning hours of work and overtime;

(iii) providing an assessment to be used for work appraisals or merit increases for employees;

(iv) recommending disciplining employees...

[exceptions are excluded]

6-11(3) Subject to subsections (4) to (6), the board shall not include in a bargaining unit any supervisory employees.

(4) subsection (3) does not apply if:

(a) the employer and union make an irrevocable election to allow the supervisory employees to be in the bargaining unit; or

(b) the bargaining unit determined by the board is a bargaining unit comprised of supervisory employees.

(5) An employee who is or may become a supervisory employee:

(a) continues to be a member of a bargaining unit until excluded by the board or an agreement between the employer and the union; and

(b) is entitled to all the rights and shall fulfil all the responsibilities of a member of the bargaining unit.

(6) Subsections (3) to (5) apply only on or after two years after the date on which subsection (3) comes into force.
Our labour relations system is based upon "majoritarian exclusivity" - that unionization occurs when the majority of workers within an "appropriate bargaining unit", as determined by the Board, have indicated that they wish to be represented by and collectively bargain through a particular union. That union then has the exclusive right (and accompanying responsibility) to bargain for that group of workers. It's a model that is subject to growing criticism, but there's little appetite among Canadian governments to change it.

Historically, Saskatchewan (and indeed every other Canadian jurisdiction) did not necessarily prevent supervisors and the workers they supervise from being within the same bargaining unit - governed by the same contract, bargaining at the same table, represented by the same union reps, and so on. There have been scenarios where various Labour Relations Boards have declined to certify a unit that included both supervisory and supervised employees, but it's not been required and many "mixed" bargaining units have existed and do exist.

The main argument raised in favour of supervisory exclusion is that supervisors who are within the same bargaining unit as the employees they supervise may find themselves in a conflict of interest, for example between their duties to their employer and their duties and/or loyalties as union members. It's also been argued that supervisors' bargaining priorities may not be respected within the larger bargaining unit, and that supervisors will be better off bargaining with the employer within their own bargaining unit. For instance, the City of Moose Jaw's news release (from the Regina Leader-Post article linked above) stated:

“The City has opted to structure its operations in accordance with the new legislative provisions and believes it can better manage its operations with supervisory exclusion,” the city wrote in a news release. “The concern is that supervisors and employees in the same bargaining unit can create conflict situations in disciplinary, performance assessment or grievance situations.”
(I have to make a quick distinction: these are supervisory employees. Managerial employees are already excluded from collective bargaining under the Act entirely. A "managerial" employee is an exception to the definition of "employee" under the Act and means "...a person whose primary responsibility is to exercise authority and perform functions that are of a managerial character..." (s. 6-1(h)(i)(A)). The distinction between a "supervisor" and a "manager" isn't always easy to draw (and is a prime subject for labour law exam questions), and I won't get into the distinction overmuch here.) 

Needless to say, unions in Saskatchewan are greeting applications to exclude supervisors less than enthusiastically.  The major concern is that such changes, first, fragment the existing bargaining unit, weakening its bargaining power; and second, disempower supervisory employees by effectively decertifying them - rendering them non-union - by removing them from the bargaining unit, and then by mandating that they collectively bargain as a smaller unit, if at all, reducing their bargaining power further. It also means that an employer must now deal with the supervisors as individual employees (if the supervisors choose not to re-certify) or as a separate bargaining unit (if they choose to re-certify). There's also uncertainty about the supervisory employees' future and what the Board will decide to do in this new regime, and whether we may find situations now where supervisory employees are simply unable to unionize at all.

See Professor Eric Tucker's take in his 2014 article "Shall Wagnerism Have No Dominion?", page 7, in Just Labour:

"While the managerial exclusion is standard in Canadian Wagnerism, special treatment of an additional layer of supervisory employees, who presumably do not fall into the managerial exclusion, is not. The exclusion of these supervisory employees from all employee bargaining units will not only further fragment an already highly fragmented bargaining model, but in many cases will effectively prevent them participating in the collective bargaining regime at all. This is because in all but the largest workplaces, the number of supervisory workers is likely to be too small to support viable a viable bargaining unit. Moreover, thestatutory exclusion of supervisory employees from larger bargaining units overrides the preference of supervisory and non-supervisory workers to bargain together, where such a preference exists."
It's also worth pointing out that other jurisdictions, such as B.C., address the issue of supervisors on a case-by-case basis. It's not mandated by statute; the Board can tailor a bargaining unit to address the issue of conflicts of interest of supervisors within that particular unit. The Saskatchewan approach is, I think, unduly intrusive, mandating a particular result regardless of the realities within the proposed bargaining unit before the Board.

Personally, I think the mandatory supervisory exclusion is lousy labour relations policy. I'd much prefer an approach that allows the Board to use its expertise to determine what is appropriate in a given case - though that, too, has risks. Contrast the Saskatchewan Act with language from the B.C. Labour Relations Code:
29  If a trade union applies for certification as the bargaining agent for a unit consisting of

(a) employees who supervise other employees, and
(b) any of the other employees,

the board may certify the trade union for the unit, for a unit consisting only of employees who supervise or for a unit composed of some or all of the other employees.

In B.C. the Board will still examine a variety of factors to determine if supervisors should be within the same bargaining unit as the workers they supervise; whether a second bargaining unit consisting of supervisors should be granted; or whether supervisors should be denied access to collective bargaining entirely, in the interests of industrial stability. See, e.g., B.C. Ferry Corporation v. Canada Merchant Service Guild et al., which summarizes the s. 29 approach taken by the B.C. Board. In Canada Merchant Service Guild, for instance, the Board refused to create a separate, supervisory, bargaining unit for supervisors who were not within the broader bargaining unit - so those employees, whether or not they were "supervisors" or "managers", were not able unionize under the Code at all. (
(This is of course only one case, which turned on the fact that the work being done was part of an essential public service, and whether this analysis will change (or has changed) in light of the labour jurisprudence, especially Mounted Police Association, I can't say.) It seems possible that a similar analysis might be incorporated into Saskatchewan's case law and, in certain rare circumstances, being a "supervisor" will mean not just being unable to belong to a particular bargaining unit, but to any bargaining unit.
A few closing points:

1. These applications are not mandatory.

Nothing in the Act requires that an employer make such an application. Certainly an employer can do so; but nothing in the Act is forcing the City of Moose Jaw, nor the Saskatoon Public Library, to make these applications.

2. Irrevocable elections are still possible.

While CUPE, the union for the library employees, seemed to feel that an irrevocable election under s. 6-11(4) had to be made prior to April 29, 2016, I don't see any language in the Act that limits elections in this way. On the contrary, the language is open enough that employers and unions can still agree to include supervisors even within new bargaining units.

3. How does the SEA apply to existing vs. new bargaining units?

It's absolutely certain that for new bargaining units, supervisors must be excluded.The Act is, however, somewhat ambiguous on the application of the supervisory exclusion to existing bargaining units.

Arguably, the language of the Act could be read so that it does not require the Board to eject all supervisory employees from all existing certification orders. The bargaining unit, as it stands, is already defined; it's already been determined that supervisors are appropriately members of the unit. I don't think saying that the Board "shall not include" supervisors within a bargaining unit is necessarily the same thing as saying the Board "shall amend existing bargaining units to exclude" supervisors.

The Board has generally required demonstration of a "material change in circumstances" before considering any change to an existing bargaining unit. But the Board has also held that change in statutory language - as here, with the introduction of the "supervisory employee" category - is, at least potentially, a "material change" which allows the Board to consider ordering a change. (See e.g. SGEU v. Saskatchewan, [1984] Nov. Sask. Lab. Rep. 38, regarding changes to the definition of "employee".) If there has been a change in circumstances, it's then up to the Board to determine whether the change is "necessary" - whether there's a compelling reason to change the parameters of the bargaining unit. 

Again, arguably, even where there has been a statutory change, amending a certification order is not the same thing as certifying a bargaining unit in the first place. The Board is not required to find that a change - in this case ejecting supervisory employees from their bargaining units - is "necessary".

Which is all well and good, but likely a moot point. The Labour Relations Board has given indications that it will review such applications with a view to enforcing the new definition. Employers and unions, in both consultations prior to introduction of the SEA and in discussions afterwards, have accepted that changes are coming (and many have negotiated "irrevocable elections" under the Act already). Perhaps surprisingly, an (admittedly cursory) review of Hansard doesn't reveal much about legislative intent here; it was implied once or twice - mostly by the opposition NDP - that the changes in the SEA would fragment existing bargaining units, and the few government references seem to implicitly accept that that is the way things will be. But there's no strong statement of legislative intent to be found in Hansard or in government press releases, as far as I can tell; it's more the case that everyone involved has assumed, all the way along, that supervisors will be unceremoniously ejected from their bargaining units when push comes to shove.

And of course even if the Board accepts that it's not technically required to eject supervisors, it would still be open to the Board to do so under its interpretation and application of its governing statute.

4. Supervisors can (probably) still unionize.

The CEO of the Saskatoon Public Library stated that there's nothing preventing supervisory employees from forming a new, exclusively supervisory, bargaining unit. That is, at least theoretically, true - the Act provides for supervisory-employee-only bargaining units (s. 6-11(4)(b), above). However such units must still be certified under the usual process, and the Board must determine if the units are appropriate for collective bargaining.

The Saskatchewan jurisprudence may evolve to reflect this new reality, and it may evolve in ways that will surprise even the employers who are now pushing to exclude supervisory employees.  It's possible that the concept of "fragmentation" within an employer's industrial relations - i.e. proliferation of bargaining units making it unwieldy or impossible for an employer to collectively bargain - will take a higher priority in the Saskatchewan Board's approach, leading to supervisory employees of some employers being denied the ability to collectively bargain at all. On the other hand, the fact that supervisors are now always excluded from the broader bargaining unit, and that the Act specifically contemplates a supervisor-only bargaining unit, might encourage the Labour Relations Board to give greater priority to supervisors’ right to collective bargaining and less to concerns about fragmented bargaining units or industrial stability.

As MLT's Kevin Wilson points out in his post linked above: 
Some unions are advising employers that they should sign an irrevocable election to exclude supervisors because if they do not the supervisors will be placed in a separate supervisory bargaining unit, and then the employer will have to deal with two collective agreements, rather than one. However, employers should be aware that this is not the automatic outcome from excluding supervisors from a bargaining unit. 

I would tend to agree. I'd hope that any excluded employees who wish to remain unionized have the opportunity to re-unionize with a union of their choice. In any event, I'll be very interested to see what the Board does with the applications currently before it.

Friday 27 May 2016

Missed Deadlines and the Future of Collective Bargaining in the RCMP

(This post will also be posted to the Usask Law Blog.)

Bill C-7, An Act to amend the Public Service Labour Relations Act, the Public Service Labour Relations and Employment Board Act and other Acts and to provide for certain other measures, is the federal government's response to last year's decision in Mounted Police Association of Ontario v. Canada, where the existing labour relations scheme for RCMP members (and the absolute exclusion of RCMP members from unionizing under the Public Service Labour Relations Act, of which they would otherwise be able to avail themselves) had been declared unconstitutional. Bill C-7 tries to bring RCMP members under the PSLRA, but with significant procedural and substantive differences in how that Act applies to RCMP members vs. other public servants.

(It also seems to change the name from the PSLRA to the Federal Public Sector Labour Relations Act for some reason, possibly because the government sees the RCMP as part of the federal public sector without truly being part of the public service?)

Bill C-7 is currently before the Senate but has not yet been proclaimed into law. This means that the federal government has now missed the (extended) deadline set by the Supreme Court, the upshot of which is that right now RCMP members lack a collective voice with which to deal with management., because the unconstitutional Staff Relations Program (which was a management-controlled venue which previuously allowed RCMP officers collectively to raise concerns, and didn't have sufficient independence to pass constitutional muster) has been disbanded, and Bill C-7 has not yet been proclaimed to replace the SRP with something else.

Quick! Bring a Certification Application!

It's a bit of an odd situation. RCMP members couldn't unionize under the Public Service Labour Relations Act because they were excluded from the statutory definition of "employee" under that Act (and only "employees" can certify a bargaining agent under the PSLRA, just like other labour relations statutes in Canada.)

The statutory exclusion was struck down in Mounted Police Association in 2015, and the deadline to introduce new legislation has passed. That means that in the interim,  RCMP members are technically now "employees" (without restriction) under the PSLRA, and able to exercise their rights to unionize thereunder with any union they please (subject to the usual requirements of delineating an appropriate bargaining unit, proving majority support within that unit, and so on).

As Michael Mac Neil of Carleton Univerity wryly tweeted:

Of course a union would probably be foolish to do so; bill C-7 will likely be proclaimed shortly. (And the Mounted Police Association of Ontario, at least, states it's "eagerly awaiting" the new legislative framework, which doesn't suggest an appetite to upset the applecart by filing for certification right now.)

Further, the amended Federal Public Sector Labour Relations Act sets out that there will be a single bargaining unit, covering all RCMP members and reservists in Canada, and that such a bargaining unit is the only possible bargaining unit under the Act.

238.‍13 (1) Subject to section 55, an employee organization within the meaning of paragraph (b) of the definition employee organization in subsection 2(1) that seeks to be certified as the bargaining agent for the group that consists exclusively of all the employees who are RCMP members and all the employees who are reservists may apply to the Board, in accordance with the regulations, for certification as bargaining agent for that group. The Board must notify the employer of the application without delay.

The Act further sets out that the bargaining agent - i.e. union - that represents the RCMP members can't represent any other bargaining unit (s. 238.15), and the bargaining unit can't include anyone other than RCMP members and reservists (s. 238.16).

In other words, while RCMP members can select their bargaining agent (in Mounted Police Association there were three associations seeking representation rights, one based in B.C., one in Ontario, and one in Quebec, so there may be some competition for that role), they all have to select the same one, and that bargaining agent can only represent the RCMP. So, we won't be seeing the United Steelworkers or United Food and Commercial Workers representing RCMP members any time soon.

Choice in bargaining agent notwithstanding, it's quite similar to "designated bargaining agent" labour relations models, such as those designating unions for teachers and nurses. But the practical effect is that any pre-existing union, even if successful, couldn’t maintain representation rights after the passage of the new Act.

So practically speaking, RCMP members are collectively without representation until Bill C-7 is passed; when it will be passed depends on the Senate's schedule. But should the government take too long in implementing the new regime, I wonder if one of the staff associations involved in the appeal in Mounted Police Association would take matters into its own hands and apply for certification for a group of RCMP members, if only to encourage the government to move things along?

(I'll answer my own question: No, they probably wouldn't, for the reasons already given.)

Bill C-7's Restrictions on Collective Bargaining

Bill C-7 hasn't been uncontroversial; there are still provisions, unsurprisingly unpopular with RCMP members, that strictly limit what any prospective RCMP union will be able to negotiate for its members.

Specifically, s. 238.19 of the new Act states:

238.‍19A collective agreement that applies to the bargaining unit determined under section 238.‍14 must not, directly or indirectly, alter or eliminate any existing term or condition of employment or establish any new term or condition of employment if
(a) doing so would require the enactment or amendment of any legislation by Parliament, except for the purpose of appropriating money required for the implementation of the term or condition;
(b) the term or condition is one that has been or may be established under the Royal Canadian Mounted Police Superannuation Act, the Royal Canadian Mounted Police Pension Continuation Act, the Public Service Employment Act, the Public Service Superannuation Act or the Government Employees Compensation Act; or
(c) the term or condition relates to
(i) law enforcement techniques,
(ii) transfers from one position to another and appointments,
(iii) appraisals,
(iv) probation,
(v) discharges or demotions,
(vi) conduct, including harassment,
(vii) the basic requirements for carrying out the duties of an RCMP member or a reservist, or
(viii) the uniform, order of dress, equipment or medals of the Royal Canadian Mounted Police.
So: no negotiation over pensions (governed by the federal superannuation and pension acts), nor wages if the government (as it did in Meredith) sets, by statute or regulation, what wages will be. No negotation over probation periods, performance appraisals, or discharge or demotion procedure. (Would that mean that negotiating a grievance procedure under which discharge or demotion could be challenged is also off the table?) No negotiation regarding duties or conduct while on the job. Frankly, it's difficult to see what substantive areas are left for an RCMP union to negotiate.

The RCMP itself has portrayed these changes as ensuring that RCMP members can "exercise their Charter-protected freedoms, including freedom of association," but I think these restrictions raise the question of whether the new Act prevents "meaningful collective bargaining", in the sense used by the Supreme Court in B.C. Health Services in 2007 and in Mounted Police Association, Meredith v. Canada, and Saskatchewan Federation of Labour in 2015. In Meredith a rollback of negotiated wage increases was not unconstitutional, but this Act prevents both present and future negotiations on a whole host of issues. Job security, wages, pensions, the ability to challenge whether your dismissal was for just cause, having some say in the employer's ability to transfer employees from one workplace or job to another...these are important issues that many unions negotiate hard for. To have them taken off the table entirely seems to leave any RCMP union the ability to nibble around the edges of its members' terms and conditions of employment, but leaves it without much actual clout. In other words RCMP members may be able to exercise sufficient choice in selecting their union, and their union may have sufficient independence from the employer, to satisfy the (quite basic) requirements set out by the Supreme Court in Mounted Police Association.

But whether the union could actually engage in "meaningful collective bargaining" is another issue. One of the reasons the health sector legislation passed by the B.C. Liberals was struck down in B.C. Health Services was because the legislation not only made significant changes to negotiated terms and conditions of employment; it also prevented any negotiation between health care unions and health care employers regarding those, and other, contractual terms.

It's worth noting that the B.C. Liberal government is facing another Charter challenge which is heading to the Supreme Court of Canada, this time regarding a prohibition on negotiating class sizes in the public school system. It's a similar issue, though to a lesser degree - to what extent can a government limit the ambit of collective bargaining without running afoul of s. 2(d)'s guarantee of freedom of association? (Mind you, no Canadian government has gone as far as Scott Walker's Republican administration in Wisconsin, which limited collective bargaining in the public sector only to wages - and any wage increases were then capped to the Consumer Price Index, at that - but there is still significant uncertainty about just how far a government can go.)

I would not be surprised if the courts haven't seen the last of the RCMP unionization saga.


Thursday 26 May 2016

Check out the Usask Law Blog!

The University of Saskatchewan College of Law now has an official blog, which I think is a great move. I'm hopeful that under the benevolent (?) leadership of Professor Michael Plaxton, graduate students and faculty will find it a useful outlet for the writing-but-not-quite-enough-for-an-article-writing urge.

Check it out at Usask Law Blog!

(I will be cross-posting whatever I post there here as well, for what it's worth.)