Private and Public Sector Bargaining in Canada: 1980-2015.
Over the past several decades, unions in most advanced economies have been confronted by significant economic, technological, political and legal developments. In varying degrees, these changes have posed a challenge to the ability of unions to maintain membership levels and secure collective bargaining gains. For example, in contrast to the sharp decline in union density in other Anglo-American countries, the impact of these developments has been less pronounced in Canada (Fairbrother and Yates, 2003; Bailey and Peetz, 2014). Even though the decline in union density was relatively modest in Canada, it was recognized union renewal strategies would be required to address union membership stagnation and decline. Most advocates of union renewal argue it is imperative to address deficiencies in union structure, organization and leadership, and develop new organizing, collective bargaining and political strategies (Kumar and Schenk, 2005). Some critics maintain the revival literature avoids addressing fundamental changes in labour-capital and labour-state relations in the political economy of capitalism, choosing instead to ask "what kind of organizational restructuring and strategic repositioning is required if organized labour is to determine labour market outcomes and exert political power" (MacDonald, 2014:735).
Since 1980 collective bargaining in Canada has been influenced by economic recessions, structural changes in employment, technological, political and legislative developments. In the private sector, globalization, trade liberalization, deregulation, and technological advances have contributed to a rise in international and domestic competitiveness and shaped employer labour relations strategies. Many of the same forces led to changes in the public sector. Pressures to increase efficiency and fiscal responsibility were associated with the emergence of new public management, the adoption of "best practices" and alternative approaches to the delivery of public services. Further, economic downturns and the rise of neoliberalism prompted senior governments to introduce more stringent fiscal policies and legal restrictions on collective bargaining.
The purpose of this paper is to consider the response of Canadian unions to turbulent environmental pressures. The study focuses on selected collective bargaining indicators, including: union membership and density, the duration of collective agreements, settlement stages, wage settlements and strike activity. One important issue is whether union membership and density levels have stagnated, declined or increased. Whereas high and increasing density levels are associated with greater union power and collective bargaining gains, declining density levels have been associated with the erosion of the relative bargaining power of unions. Additionally, the study provides a comparative perspective of collective bargaining trends in the private and public sectors. Based on major collective bargaining settlements covering 500 or more employees, it updates earlier studies and seeks to illuminate the relative importance of various environmental pressures in each sector.
The first section of the paper provides a framework for assessing changes in collective bargaining patterns. This is followed by an overview of changes in the environmental context and their potential impact on collective bargaining. Given union bargaining power is closely associated with membership strength and the ability to take wages out of competition, the third section examines union membership and density patterns. Next we examine trends in the other collective bargaining indicators, with an emphasis on comparing bargaining patterns and outcomes in the private and public sectors. The concluding section summarizes our findings and assesses the implications for future collective bargaining.
There is an extensive comparative literature examining trade unionism and collective bargaining in Canada and the United States (Chaykowski and Verma, 1992; Rose and Chaison, 1996). A framework for evaluating significant changes in U.S. collective bargaining is found in the three-tier approach developed by Kochan, Katz and McKersie (1986). The framework (the strategic-choice model) was used to capture the transformation of the labour relations system in the private sector of the United States in the early 1980s. In the post-World War II period (to the mid-1970s), there was a consensus model of industrial relations characterized by a mature and stable collective bargaining system. Mutual accommodation allowed management to buy "peace and predictable labor costs" by taking wage and benefits out of competition (Strauss 1986:2).
According to the strategic-choice model, rising international competition, a highly competitive domestic nonunion sector, a severe recession in the early 1980s, and deregulation had shifted bargaining power in favour of employers. An important aspect of the transformation was "the growth of a parallel nonunion system that forced collective bargaining to reform itself in significant ways, even as the nonunion system supplanted collective bargaining in every sector of the economy" (Chaykowski and Verma, 1992: 3). These pressures enabled management to initiate changes at the strategic level (shifting investments and other changes to reduce union influence), the functional level (securing wage and other contract concessions) and the workplace level (reorganizing workplace practices, e.g., flexible work rules, job classifications and pay systems). Since 2000 competitive pressures have contributed to the continued growth of the nonunion system in the private sector (Katz and Colvin, 2016). In contrast, a recent study of state and local governments concluded there had not been a fundamental transformation of U.S. public sector labour relations (Katz, 2013).
Noting similar pressures for change in Canada, Chaykowski and Verma (1992) examined a cross section of industries to determine whether there had been a transformation of the Canadian industrial relations system during the 1980s. Whereas the emergence of a nonunion system was a significant development in the United States this was not the case in Canada. This can be attributed to several factors, including stronger labour laws, Canadian employers attached a lower priority to union avoidance as a value (even U.S. companies in Canada tended to adopt a union acceptance strategy), and there were fewer opportunities to avoid unions (Thompson, 2009). Overall, Canadian union membership grew and union density was relatively stable during this period. Changes from the pre-1980 era were largely evolutionary rather than transformational and there was considerable variation across industries. These findings "suggest that change in the industrial relations system, though underway in the 1980s, was not substantial ... and [b]y 1991, the traditional system remained largely entrenched because the parties continued to adhere to their traditional roles in industrial relations" (Chaykowski and Verma, 1992: 470).
Subsequent studies suggest environmental pressures have eroded the relative bargaining power of unions. This has been associated with a further decline in the numerical strength of private sector unions (Akyeampong, 2001), the adoption longer collective agreements often favoured by employers (Rose, 2004a), the moderation of wage settlements (Fang and Verma, 2008) and a downward trend in strike activity (Gunderson, et al, 2009). Relative bargaining power is associated with strike leverage and the elasticity of demand for labour in both sectors. Strike leverage reflects the relative ability of union members and employers to engage in and sustain strike activity, i.e., mitigate the economic costs associated with strikes. In the private sector, rising competiveness can alter the trade-off between employment and wages by increasing the elasticity of demand for labour. In contrast, the demand for labour is generally regarded as more inelastic in the public sector (Katz, 2013). Even so, given the political costs associated with public sector disputes, government intervention represents an added consideration.
A comprehensive analysis of whether external pressures have produced fundamental changes to the industrial relations system is beyond the scope of this paper. The objective is more modest. It examines the impact of the environmental context on collective bargaining processes and outcomes, and compares patterns in the private and public sectors.
The external environment shapes bargaining expectations and influences bargaining power. Any attempt to understand bargaining patterns must take into account the extent to which turbulent economic conditions and rising competitiveness have eroded union bargaining power. International product market competition contributed to the reorganization of productive activities, including the outsourcing of work and relocation of operations offshore.
As in most advanced economies, union density in Canada has been impacted by significant changes in the industrial and occupational structure of employment (Fairbrother and Yates, 2003; Bowden, 2018). In broad terms, the shrinking share of male, blue-collar jobs in manufacturing and other goods producing industries has led to the erosion of union membership in traditional union strongholds and a rising share of white-collar jobs (especially for women) in the growing low-density private services sector and the high-density public sector (Jackson, 2004). Another important structural change has been the rise in non-standard employment, e.g., part-time, casual and contract jobs (Zeytinoglu and Cooke, 2005).
In addition, advances in new technology contributed to employment losses and lower density in the private sector, e.g., manufacturing and natural resources (Chaykowski and Verma, 1992). Similarly, intensified domestic competition negatively impacted unionization. For example, in the 1980s the rise of nonunion competition in the construction industry was associated with declining union density (Rose, 2013).
Lower and declining density rates have made it increasingly difficult for private sector unions to take wages out of competition and increased the relative bargaining power of employers. This, in turn, constrained the ability of unions to achieve significant bargaining gains, defend against employer demands for contract concessions, e.g., wage freezes and two-tier wage structures, and engage in effective strike action. These developments reflected the symbiotic relationship between union density and union effectiveness. In other words, "higher densities allow unions to mobilize greater resources ... to achieve greater effectiveness and, equally important, that higher effectiveness in terms of attaining organizing, bargaining and political goals contributes to greater density" (Rose and Chaison, 1996: 79).
Political and legal factors also combined to limit the influence of unions. The rise of neoliberalism across the entire political spectrum was evidenced by policies promoting the deregulation of markets, the reforming of welfare state policies, and, more recently, the adoption of harsh austerity policies in response to the global economic recession (Bartkiw, 2015). These developments were aimed at reducing the economic and political influence of unions and frayed traditional alliances between organized labour and social democratic parties (Rose, 2016).
At the same time, the emergence, extent and impact of neoliberalism varies across and within countries. There is a range from "softer" transitions to neoliberalism driven by internal forces to "harder" transitions in response to external crises. As a result, "neoliberal politics will continue to take localized forms and will be associated with profoundly uneven outcomes" as they are mediated by institutional and other arrangements in individual countries (Peck, 2004: 395). In this regard, Canadian unions have fared somewhat better given the highly regionalized nature of the economy, provincial control and regulation of the labour market, and the decentralized industrial relations system. This has resulted in an "uneven deregulation of labour markets and the dismantling of the existing industrial relations system" (Fairbrother and Yates, 2003: 14). In the public sector, governments often must weigh political realities, e.g., whether to avoid a public backlash to the disruption or curtailment important public services rather than promote the efficiency of the market (Bowden, 2018).
Although strong legal protection of collective bargaining continues, recent federal and provincial government policies have shifted the balance of power away from unions (Taras and Walsworth, 2016). Even so, these changes involved limits on union expansion and bargaining rights rather than promoting de-unionization. The erosion of state support for unions has limited the capacity of private sector unions to organize new members in several ways (Godard, 2003; Rose and Chaison, 2001). First, neoliberal governments emphasized a pro-business agenda, including tax cuts, reducing government expenditures and the deregulation of labour markets. Second, legislative changes to certification procedures had a negative impact on union organizing activity. Whereas every Canadian jurisdiction provided for card check certification to determine union representation in 1976, mandatory union representation votes covered nearly two-thirds of the Canadian labour force by 2001. The shift to mandatory votes significantly reduced certification success rates in Canada (Johnson, 2004; Riddell, 2004).
Third, and more broadly, little importance was attached to legislation supporting the expansion of collective bargaining. This was shown by the failure to enact labour law reforms in response to changes in the nature of work, most notably the growth in non-standard employment (e.g., temporary and part-time work) and the practice and impact of fissured workplaces (Weil, 2014). This had the effect of limiting opportunities to expand union representation to this growing segment of the labour market.
In the public sector, market forces also shaped political choices. The rapid expansion of public employment in the 1960s and 1970s was followed by slower growth (1980s) and a period of restructuring and downsizing (1990s). In response to macroeconomic conditions, e.g., high inflation in the 1980s and recessions in both decades, senior governments introduced compensation restraint policies, e.g., wage caps, wage freezes, wage reductions, and unpaid days off. In addition, legislation was used to temporarily suspend collective bargaining, extend collective agreements and restrict the right to strike (Swimmer, 2001). Not only did these temporal measures cast a shadow over public sector bargaining, but economic and political pressures led to additional legal constraints on collective bargaining after 2000.
Over the past decade, unions have mounted numerous constitutional challenges to determine the permissible limits of government interference in collective bargaining. The Supreme Court of Canada (SCC) recognized collective bargaining, including the right to strike, was protected under the freedom of association provisions of the Canadian Charter of Rights and Freedoms. The SCC also ruled a federal wage restraint law did not breach the constitutional guarantee of freedom of association, noting the legislation was a response to unique circumstances (the global economic recession) and was time sensitive (Lancaster House, 2015). It remains to be seen, whether wage restraint laws adopted following the economic crisis will withstand constitutional challenges (Lancaster House, 2016).
Union Membership And Density
Prior to 1997 there was no consistent time series of public sector membership and density. Even so, estimates indicate net union membership growth between 1981 and 1992 was almost entirely attributable to the public sector (Rose 1995).
Data limitations were remedied when the Labour Force Survey conducted by Statistics Canada began reporting annual membership and density figures for the public sector. Table 1 compares unionization patterns for the period 1997 to 2015. In the private sector, membership growth was minimal (4.8 percent) and the density rate declined from 19 to 15 percent. In marked contrast, public sector membership rose by about 40 percent, recorded modest gains after 2008 (8.7 percent) and the density rate was stable (at about 70-72 percent). As a result, the public sector share of total union membership reached 60 percent in 2015 (Statistics Canada, 2016).
There have notable variations in unionization across industries and demographic characteristics. Private sector decline in this period was most evident in the goods-producing sector. Despite rising employment, union membership fell by 12.6 percent and the density rate declined from 32.5 to 25.6 percent. Sustained economic growth beginning in the late 1990s did not alter the long-run decline in private sector unionization. Union membership and density continued to be impacted by globalization, trade liberalization, structural changes in employment and technological change. The downward trend was perpetuated by the global economic recession. The decline in manufacturing employment (14.4 percent) was associated with the steepest decline in union membership (nearly 40 percent) and density (from 33.3 to 23.5 percent). Even in goods-producing sectors experiencing employment growth, e.g., natural resources, union density declined (Statistics Canada, 2016).
In most service-producing industries, strong employment growth led to union membership increases and relatively stable density rates. A notable exception to the overall pattern was transportation and warehousing where density declined by over 6 percent. Despite rising employment, the deregulation of the transportation industry and technological changes appear to have negatively impacted unionization. It is also noteworthy that although membership increased in private services where unions are underrepresented (finance and related industries), the density rate was virtually unchanged. In contrast, there was stronger membership growth in public services--health, education and public administration--and density rates were either stable or recorded modest increases.
Between 1997 and 2015, there were substantially higher membership gains for women (43.6 percent) than men (7.3 percent) and, as a result, women accounted for more than 80 percent of total union growth. This contributed to significant changes in gender density rates. In 1997, the density rate for men was higher than women (32.2 and 29.4 percent, respectfully). In 2015, the reverse was the case; the density rate for women reached 30.4 percent and the rate for men fell to 26.8 percent.
As in other advanced economies, this shift was associated with changes in the employment of men and women (Bowden, 2018). The declining density rate for men, especially older men, was associated with a decline in full-time employment. Between 1976 and 2014, the decline in the full-time employment rate for men aged 30 to 54 was primarily the result a drop in the labour force participation rate (40 percent), the growing importance of part-time work (41 percent) and, to a lesser extent, increases in unemployment (20 percent). The decline was even greater for men aged between 55 and 64. In marked contrast, the rise in the full-time employment rate for women aged 25 and older was almost entirely attributable to growing labour force participation rates (Morissette, et al, 2015).
The aforementioned environmental pressures did not have the same effect on public sector unions. Although union growth slowed in response to economic and political developments, e.g., the global recession, austerity budgets, wage restraints and related measures, public sector union membership gains were commensurate with increases in public employment. The largest gains were in the broader public sector, e.g., health care occupations.
Duration Of Collective Agreements
Since the 1980s the average length of major collective agreements (500 or more employees) increased in both the private sector (from 27.3 to 41.3 months) and the public sector (from 22.6 to 38 months). For an extended period, private sector agreements were longer and increased faster in response to increasing competitive pressures. Longer contracts indicated "the underlying trade-off has shifted from one involving a trade-off from work for pay to one involving work for employment" (Murray, et al, 2000: 243). They also promoted stability and accommodated the mutual interests of the parties by providing private employers with "a degree of budget stability, better long-term planning and a decrease in bargaining costs" and recognized union preferences for "long-term safeguards and increased security during unstable economic conditions" (HRSDC, 2012: 6).
After initially lagging the private sector trend, the demand for longer contracts in the public sector accelerated after 2000 and average contract duration narrowed between sectors. What accounts for the lagged demand for longer contracts in the public sector? In part, the reliance of senior governments on unilateral legislative action in the 1990s obviated the need to pursue longer contracts. Specifically, it enabled them to achieve wage restraint and restructuring objectives. They were also able to minimize labour disputes by prohibiting strikes or passing back-to-work laws. Following the removal or expiration of legal restraints, governments and public employers attached greater importance to pursuing longer contracts and labour relations stability. Public sector unions may also have been more amenable to longer contracts, particularly where the threat of legislative intervention, privatization and contracting out remained distinct possibilities. Accordingly, longer contracts may have been seen as providing a measure of job security protection.
Another perspective on collective bargaining involves the various stages where collective agreements were settled. The direct bargaining stage includes settlements without any third-party intervention. The next two stages include settlements involving non-binding dispute procedures: conciliation and mediation. When combined these three stages represent the overall settlement rate, i.e., the proportion of settlements reached by the parties themselves without proceeding to what normally would be considered the final impasse stage. Arbitration and work stoppages represent negotiations that reach a final impasse stage. However, legislation is another and important stage of settlement. In some instances, government intervention takes place following a strike and in other cases legislation "suspends collective bargaining and imposes collective agreements" (Gunderson, et al., 2009: 348). When combined settlements involving arbitration, work stoppages and legislation represent the overall dispute rate. Finally, "other" is a residual category, e.g., settlements pursuant to industrial inquiry commissions (ESDC, 2015a).
Table 3 provides a breakdown of settlement stages for major collective agreements. The results are broadly consistent with earlier findings comparing settlement stages in the public and private sectors in the period 1980-1998 (Gunderson, et al, 2009). First, the private sector had a higher overall settlement rate because a larger percentage of settlements were reached at the direct bargaining, conciliation and mediation stages. Second, even though there were fewer settlements at the work stoppage stage in the public sector, the overall dispute rate was higher than the private sector, largely because there were substantially more legislated and arbitrated settlements. Finally, settlement patterns in the 1990s differed from the previous decade. Whereas the overall settlement rate in the private sector increased in the 1990s, it fell in the public sector. This reflected the dramatic rise in legislated settlements from 12.4 percent (1980-1989) to 20 percent (1990-1999).
Since 2000, the overall settlement rate increased in both sectors, but the public sector continued to lag behind the private sector (83.4 percent and 91.5 percent, respectively). Public sector settlement rates were consistently lower for the direct bargaining, conciliation and mediation stages. Conversely, there was a substantial decline in the public sector's overall dispute rate (from 26.9 percent in the 1990s to 14.6 percent after 2000). Although not shown in Table 3, a rise in legislated settlements following the global economic recession pushed the overall dispute rate higher in the public sector.
In conclusion, comparisons across time periods disclose similarities and differences in bargaining patterns between sectors. Common features include: (1) an upward trend in overall settlement rates and settlements at the direct bargaining stage and (2) a decline in overall dispute rates including settlements at the work stoppage stage. An important difference was the higher percentage of arbitrated and legislated settlements in the public sector. Unfortunately, it is not possible to directly measure and compare strike rates between sectors. Without question legislated settlements have been the most distinguishing feature of bargaining patterns between sectors since 1980 (Panitch & Swartz, 1998; Rose, 2016). This reflects both the increase in back-to-work laws by senior governments and the adoption wage restraints in response to inflation (1980s), budget deficits (1990s) and budget deficits and austerity policies (since 2009).
It can also be observed the number of collective bargaining settlements has declined significantly since the 1980s. The largest decline was in the private sector, where the average number of annual settlements fell from 216 (1980s) to 177 (1990s) to 117 (2000-2015). The 45.8 percent decrease was attributed to declining unionization, union mergers and longer collective agreements (ESDC, 2015b). The public sector decline was 28.4 percent; the average number of annual settlements fell from 317 (1980s) to 268 (1990s) to 227 (2000-2015). Given higher and stable unionization in the public sector, the decline in settlements is primarily associated with longer collective agreements.
Wage settlements have trended downward since 1980 and have been closely associated with changes in the rate of inflation (ESDC, 2015b). Between 1990 and 2015, average annual wage increases in the private and public sectors fell to approximately one-third the level in the 1980s (see Table 4). Although a period of sustained economic expansion at the end of the century produced a rise in wage settlements, wage increases slowed following the global economic recession. Using a wage index (1979=100), the cumulative wage increase between 1980 and 2015 was considerably higher in the private sector (331.3) than the public sector (311.5).
Other factors contributed to wage moderation in the private sector. As intensified competitive pressures weakened centralized bargaining structures and disrupted pattern bargaining, the ability of unions to take wages out of competition became more difficult (Chaykowski, 2009). Economic crises, such as the post-9/11 Air Canada bankruptcy proceedings in 2003 and the government bailout of the auto sector in 2009, resulted in major union contract concessions. More generally, unions increasingly responded to employer demands for contract concessions, e.g., two-tier wage structures and changes to defined benefit pension plans, by moderating wage demands and placing greater emphasis on employment security (Chaykowski, 2009). This pattern suggests "a loss in union bargaining power and/or shift towards non-wage priorities" (Bartkiw, 2015:3). Additionally, declining unionization has been associated with a decrease in the union wage premium (Fang and Verma, 2002; Walsworth and Long, 2012).
Whereas the cumulative increase in public sector wages exceeded the private sector in the 1980s, this was not sustained in subsequent years. In the 1990s, public sector wage settlements lagged settlements in the private sector for ten consecutive years. Although favourable economic conditions fuelled demands for wage catch up, unions did not achieve any appreciable wage catch up after 2000. This may indicate a shift in public sector union bargaining priorities, e.g., an increased willingness to trade off wage increases to preserve the status quo or improve job security and/or benefits. This would reflect the increased precariousness of job security in the public sector and employer demands for concessions on pensions and other benefits (Swimmer, 2001; Rose 2004b).
Our results also suggest that since 1990 political factors became an increasingly significant and binding constraint on public sector wage settlements (Gunderson, 1995). To begin with, wage restraint measures have become more restrictive. Whereas wage guidelines were relied to combat inflation in the 1980s, wage freezes and rollbacks became more commonplace to eradicate large budget deficits during the retrenchment years (1990s). They were also part of other reforms, notably extensive restructuring and downsizing. By 2000, fiscal vigilance was the dominant theme of governments and public employers seeking to consolidate their gains from the retrenchment period (Rose, 2004b). This approach was reinforced by taxpayer resistance to higher taxes and the greater willingness of the public to resist union demands for higher pay on economic, ability-to-pay grounds. By 2008, most senior governments had achieved balanced budgets or surpluses. In response to the global economic recession and large budget deficits, there was a return to wage restraint measures and broader austerity policies as senior governments concluded market forces alone were insufficient to remedy their fiscal position.
Table 5 provides average annual figures for the number of public sector work stoppages and person-days lost, and the public sector's share of overall strike activity. It shows a downward trend in the average annual number of work stoppages and person-days lost between 1980 and 2015. As well, since the decline was greater in the private sector, the public sector accounted for a larger share of total strike activity. For example, the average annual number of strikes in the public sector fell 55 percent from 153 strikes (1980-1989) to 68 strikes (2000-2015), yet its share of total strikes rose from 20.3 to 29 percent. Person-days lost exhibited a broadly similar pattern. Although the public sector share of total strike activity increased after the global economic recession, this was primarily associated with two major disputes (ESDC, 2016).
The overall decline in strike activity appears to be associated with the long-run decline in the instrumentality of strikes, i.e., the willingness and capability to engage in work stoppages, especially in the private sector. A recent review of the research literature suggests the instrumentality of strikes has been influenced by socio-economic factors: "heightened capital mobility and globalization of production; cultural and ideological forces; shifts in managerial strategies and capacities; and organizational restructuring" (Bartkiw, 2015: 4). This would suggest the threat of strike action or the occurrence of strikes may no longer be the primary factor driving collective bargaining settlements.
Another factor impacting the downward trend in strike activity has been the increase in the duration of collective agreements discussed above. Longer contracts have led to fewer collective bargaining settlements over time. Although the potential for work stoppages declined in both sectors, the impact was more significant in the private sector. Additionally, declining private sector union density has been associated with a reduction in the relative bargaining power of unions and a greater awareness of the precariousness of strike action in troubled economic times. Further, the fragile recovery from the global economic crisis heightened concerns of threatened government intervention. This was evidenced by the federal government's intervention to prevent or end national transportation disputes in recent years (Rose, 2015).
In the public sector, legal restrictions on strike activity negatively impacted union bargaining power. Temporal restrictions including wage restraint laws and the threat or use of back-to-work laws, strengthened the relative bargaining power of employers. The balance of power has also been altered by laws permanently removing the right to strike for some essential service employees (Rose, 2016).
As in other advanced economies, globalization and other environmental pressures have impacted unionization and collective bargaining in Canada. At the same time, national institutional arrangements played an important role in influencing overall collective bargaining patterns and contributing to different outcomes across sectors. Owing to regional differences in the regulation of the labour market, the general acceptance of the legitimacy of unions by employers and the extensive government regulation of union-management relations, Canada experienced "few of the overt signs of structural changes seen in other developed countries" (Taras and Walsworth, 2016: 98).
Over the period 1980 to 2015, several notable collective bargaining trends emerged. The numerical strength of unions represents the biggest difference between sectors. In contrast to marginal private sector membership growth and falling union density, the public sector experienced substantial membership gains and stable union density. Despite the similarity of other bargaining patterns in both sectors, there were some differences in the timing and magnitude of these trends and the underlying factors contributing to them.
In broad terms, collective bargaining trended in the same direction in the private and public sectors in response to the confluence of economic, technological, political and legal developments. These factors led to a decline in the relative bargaining power of unions. The greater sensitivity of private employment to macroeconomic factors and in particular the long-run decline in employment in traditional union strongholds, e.g. manufacturing, contributed to the lower unionization rates. Additionally, unions have not been able to replenish membership losses with organizing gains in the private service sector. Competitive pressures and declining unionization enabled employers to take the initiative in collective bargaining and achieve long-run stability. This was reflected in longer collective agreements, wage moderation and declining strike activity.
In contrast, there was a lagged response to macroeconomic conditions and rising competitiveness in the public sector. Although there were increased demands for the more efficient and effective delivery of public services, the adoption of "free-market" policies by neoliberal governments was uneven. Such policies often represented "softer" transitions to neoliberalism mediated by differences in regional economies and industrial relations. With the exception of a period of restructuring in the mid-1990s, public employment and unionization expanded. Support for privatizing public services has slowed since the start of the twenty-first century (Thompson and Slinn, 2013).
The most significant change in the public sector was the adoption of stringent fiscal policies. With revenue growth constrained at various times by uncertain and difficult economic conditions and the reluctance to raise taxes, fiscal policies stressed the importance of reducing government expenditures, most notably compensation costs, and establishing balanced budgets. To that end, senior governments enacted wage restraints laws, imposed limits on strike activity and adopted hard bargaining strategies. These initiatives contributed to the downward trend in wage settlements and strike activity.
Our results indicate environmental pressures produced notable, albeit gradual, changes to collective bargaining. In contrast to developments in the United States, there was no evidence of wholesale de-unionization and, consistent with previous findings (Chaykowski and Verma, 1992), the parties maintained their traditional roles in collective bargaining. As well, government intervention remained a central feature of Canadian industrial relations. The findings do not signify a paradigm shift, but rather a continuing evolution of collective bargaining processes and outcomes. This confirms the centrality of collective bargaining to the industrial relations system. There was a pattern of long-run labour relations stability as demonstrated by adjustments to the length of collective agreements, higher overall settlement rates, and the decline in wage settlements and strike activity. These indicators point to the erosion of the relative bargaining power of unions.
Economic, political and legal developments will continue to be the dominant influences on collective bargaining in the future. While the prospects for union expansion in both sectors appear modest at best, there is a reasonable expectation collective bargaining can adapt to changes in the external environment. In the private sector, the parties were able to respond to competitive pressures through mutual accommodation and achieve flexible and cost-effective agreements with minimal labour disruption. Government intervention in difficult economic times will continue to influence collective bargaining in both sectors.
In the public sector, governments have shown an unwillingness to rely exclusively on market forces to effect changes in collective bargaining. Legislative fiat and/or the threat of legal intervention, was relied on to align bargaining processes and outcomes with government budget plans. There is reason to believe governments may move more cautiously in the future since the courts have ruled many legal restrictions on collective bargaining were unconstitutional. A reluctance to intervene could also be influenced by a strong and sustained economic recovery from the global economic crisis and waning political support for harsh austerity measures.
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Joseph B. Rose McMaster University, Canada
Joseph B. Rose
Professor of Industrial Relations Degroote Sschool of Business McMaster University Hamilton, Ontario, Canada
TEL: (905) 525-9140 X23951 FAX: (905) 521-8995
Table 1: Union Membership and Density, 1997-2015 Years Private Density Public Density Sector Rate Sector Rate ('000) ('000) 1997 1,658.5 19.0% 1,849.6 69.8% 2008 1,782.2 16.2% 2,395.2 71.1% 2015 1,737.8 15.0% 2,603.6 72.4% Percentage Change in Membership Private Sector Public Sector 1997-2008: + 7.5% + 29.5% 2008-2015: - 2.5% + 8.7% 1997-2015: + 4.8% + 40.8% Public Sector Membership as a Percentage of Total Union Membership 1997: 52.7% 2008: 56.5% 2015: 60.0% (Source: Calculations by author based on Statistics Canada, 2016). Table 2: Average Duration of Major Collective Agreements (in months), 1980-2015 Years Public Sector Private Sector Public-Private Difference 1980-89 22.6 27.3 4.7 1990-99 25.9 (+14.6%) 32.8 (+20.1%) 6.9 2000-15 38.0 (+46.7%) 41.3 (+25.9%) 3.3 Pre- and Post-Global Recession 2000-2008 36.6 40.4 3.8 2009-2015 39.9 (+9.0%) 42.7 (+5.7%) 2.8 (Source: Calculations by author based on a special tabulation provided by the Workplace Information and Research Division, Employment and Social Development Canada.) Table 3: Major Collective Agreements by Settlement Stages, 1980-2015 1980-1989 1990-1999 Public Private Public Private Settlement Stages Sector Sector Sector Sector (N=3,167) (N=2,158) (N=2,684) (N=1,769) Direct Barg. 52.6% 54.5% 56.0% 69.0% Conciliation 11.5% 18.1% 6.3% 12.8% Mediation 10.1% 12.0% 10.5% 8.6% Arbitration 8.8% 0.9% 4.6% 1.5% Work Stoppage 2.8% 14.0% 2.3% 6.7% Legislation 12.4% 0.2% 20.0% 0.8% Other 1.7% 0.2% 0.3% 0.5% 2000-2015 Public Private Settlement Stages Sector Sector (N=3,625) (N=1,874) Direct Barg. 62.8% 65.2% Conciliation 8.5% 13.3% Mediation 12.1% 13.0% Arbitration 7.7% 5.3% Work Stoppage 0.9% 2.3% Legislation 6.0% 0.1% Other 2.0% 0.6% (Source: Calculations by author based on a special tabulation provided by the Workplace Information and Research Division, Employment and Social Development Canada.) Table 4: Indices of Average Annual Wage Increases, 1980-2015 Years Public sector Wage Index Annual Average 1980-1989 (1979=100) 184.3 (6.4%) 1990-1999 (1989=100) 118.6 (1.8%) 2000-2015 (1999=100) 142.5 (2.2%) 2000-2008 (1999=100) 127.8 (2.7%) 2009-2015 (2008=100) 111.5 (1.6%) 1980-2015 311.5 (3.4%) Years Private sector Wage Index Annual Average 1980-1989 (1979=100) 182.9 (6.0%) 1990-1999 (1989=100) 126.8 (2.5%) 2000-2015 (1999=100) 142.7 (2.3%) 2000-2008 (1999=100) 124.5 (2.6%) 2009-2015 (2008=100) 114.6 (2.0%) 1980-2015 331.3 (3.6%) (Source: Calculations by author based on a special tabulation provided by the Workplace Information and Research Division, Employment and Social Development Canada.) Table 5: Average Annual Public Sector Work Stoppages, 1980-2015 Years # Stoppages % of total Person days lost % of total ('000) 1980-1989 153 20.3% 1404 25.7% 1990-1999 92 26.9% 921 35.2% 2000-2015 68 29.0% 822 43.9% 2000-2008 70 25.9% 909 42.3% 2009-2015 66 34.9% 712 46.8% (Source: Calculations by author based on a special tabulation provided by the Workplace Information and Research Division, Employment and Social Development Canada.)
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|Author:||Rose, Joseph B.|
|Publication:||International Journal of Employment Studies|
|Date:||Apr 1, 2019|
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