Fortunately, everyone in Canada still has the freedom to join a group, such as a Political Action Committee, a Bible study group, a Rotary Club or the Chamber of Commerce. And, of course, we all have the freedom to join labour groups, such as the CAW in Canada and the UAW in the U.S. However, unlike other groups, the CAW and the UAW have been given special legal authority by the various labour relations boards to violate your right to negotiate for work.
In a unionized work environment, the labour laws force an employer to only hire union workers who must pay fees to the union leaders—the individual worker has no other choice except to go elsewhere, or be unemployed. A unionized employer cannot negotiate with individuals directly, and hire them according to mutually agreeable terms and conditions.
There are several instances recently in North America where a union dispute resulted in significant job losses or substantial costs for everyone. For instance, the recent closure of the Electro-Motive plant in London resulted in the loss of approximately 650 unionized and non-unionized workers because the union leadership refused to negotiate and the employer was not allowed to negotiate with individual workers who would have been happy to work at the plant.
Similarly, many jobs were lost when Intertape Polymer closed its last Ontario manufacturing facility after a three-year strike. The company was not allowed to negotiate mutually agreeable terms and conditions with individual workers who would have been happy to work at the plant.
In the U.S., the International Longshoremen’s Association (ILA)—a union of dockworkers—threatened to shut down 14 major shipping ports unless the United States Maritime Alliance met their demands to preserve the need for an army of longshoremen, even though the introduction of the shipping container in the 1960s revolutionized transportation by eliminating the need to unload cargo ships one crate at a time. A strike would have cost billions for businesses depending on imports, and for the shipping companies who had to divert shipments to other distant ports in anticipation of the strike. Once again, these companies providing the jobs were not allowed to negotiate mutually agreeable terms and conditions with individual workers.
Similarly, the iconic 82-year-old bread and snack maker, Hostess, closed down forever because it was unable to resolve a longstanding labor dispute with the unions representing its truckers and bakers. The union was demanding that breads and snacks be delivered in separate trucks, and that the workers who unloaded the bread could not unload the cake products, and vice versa. Approximately, 18,500 people lost their jobs because Hostess was not allowed to negotiate with workers who would have been happy to work in a way that allowed the company to be competitive. Many other similar examples could be cited.
To understand these labor disputes, it is important to know the legal limitations of the employer-union relationships. One of the great things about living in a relatively free society, like North America, is that we are free to choose who to do business with. For example, if you contract with someone to renovate your home, and that contractor turns out to be unreliable and performs sloppy work, you are free to end your relationship with him and to pursue business with someone else.
However, for employers, this freedom is restricted by our labour laws. These laws make it illegal for a firm to refuse to bargain with union representatives; no matter how unreasonable they may be, calling it unfair labour practice. It is illegal for a unionized firm to negotiate with, and hire individual workers according to mutually agreeable terms and conditions.
Rather than helping workers stay employed, the labour laws allow the unions to make unreasonable demands—demands that would never be presented in free market negotiations. Many businesses reluctantly accept some of these demands because they perceive it is less damaging in the short term to lose money from union featherbedding than to risk losing a lot of money on a strike, or on costly and time-consuming litigation. Others are forced to shut down.
In the long-term, accepting unreasonable demands is very damaging as is evident from the fact that the North American auto industry has lost about half its market share to the Japanese during the last 50-plus years, finally reaching pseudo-bankruptcy during the recent recession. It would never have happened if the labour laws had allowed employers to walk away from unreasonable union demands and negotiate mutually agreeable terms and conditions with those who wanted to work.
It should be no surprise that workers are voting in favour of “right to work” legislation. They want to regain their right and freedom to negotiate their own terms and conditions with employers, and to accept the work when those terms and conditions are met. They are fed up with being forced out of work when a plant closes due to unreasonable demands by the union, the leadership of which continues to be fully employed and well paid, of course.
It’s time for “right to work” legislation in Ontario, and all of Canada, especially now that our labour costs are no longer competitive with our friends in Michigan. We cannot afford to lose any more jobs because of unreasonable union demands.
Maurice Marwood, BSc., MSc., MBA has over 40 years of international business experience, including 30 years working with the Caterpillar organizations in the USA, Europe, Africa, the Middle East and Asia and is a former Director of The Nassau Institute.