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.