Commentary | Unions and Labor Standards

Arbitration, Canadian style

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It is often overlooked in the heated debate over workers’ rights to organize, but most American workers who do manage to form unions remain unable to bargain for a first contract in a timely manner. This hurdle commonly results from employers who fail to bargain in good faith and use stalling tactics as a way to preserve the status quo even after a union is in place.

While American workers seek a way around this all-too-common impasse, many in Canada have found one. Most provinces in Canada regularly use a mechanism called First Contract Arbitration (FCA), which gives the union or the employer the option of entering binding arbitration after 90 days of unsuccessful contract negotiations.

EPI’s Briefing Paper, First Contract Arbitration: The Canadian Experience, co-authored by EPI Vice President Ross Eisenbrey, outlines how the mechanism is regularly used in Canada with good results for workers and employers.

One labor relations official from Saskatchewan recently spoke with EPI about when and how FCA is used, and why it is a win-win proposition.

“It is a good deterrent for the silliness on both sides,” said Kelly Miner, acting board registrar and senior industrial relations officer/investigating officer of the Saskatchewan Labor Relations Board, who oversees a variety of industries from mining and forestry to typical services businesses like grocery stores. Even though FCA is commonly presented as a labor-friendly tool, Miner said employers use it too, as a means to refocus the talks around core issues in instances when unions are negotiating in bad faith and “trying to push everything through.”

Miner, who oversees mediation in initial collective bargaining agreements in Saskatchewan, said that FCA is used about four times a year when the parties can’t reach a contract on their own. But she stressed that having the mechanism in place also served a second purpose, encouraging many other bargaining groups to reach agreements independently. When first-contract arbitration was added to Saskatchewan’s labor laws in 1995, it initially resulted in numerous requests for binding arbitration in work places where collective bargaining had failed. Once everybody came to understand that an independent panel could determine the details of their work contracts, the stalled contract talks became a lot less common, said Miner.

In the United States, the Employee Free Choice Act (due for a vote in Congress later this year) would provide for FCA. It stipulates that in cases where negotiation of a first contract drags on without resolution for more than 90 days, either side may seek the help the Federal Mediation and Conciliation Service (FMCS), and then, if they remain at an impasse, receive the help of an arbitration panel to determine the terms and conditions of the contract, which would be binding for two years.

A study in the United States by MIT researchers John-Paul Ferguson and Thomas Kochan found that between 1999 and 2004, only 38% of unions established by a majority vote and certified for collective bargaining by the National Labor Relations Board were successful in reaching a first contract within one year, and only 56% obtained a contract in two years. Cornell University researcher Kate Bronfenbrenner has documented that many employers rely on delay tactics to block the formation of a contract, often defeating the union even after it has been elected.

But as Kelly Miner points out, FCA can also protect employers from workers who seek unreasonable demands, and needs to be viewed as a tool that serves both sides in building a friendly and productive work place. As it is applied in Saskatchewan, a request for first-contract arbitration can block employers from locking out workers, and block workers from striking. “We do see employers applying to use FCA,” she said.

Some sticking points that employers often find objectionable, she said, include unrealistic application of seniority to cover not just appropriate uses such as promotions and layoffs, but to dictate all aspects of the work place, down to how vacation time is scheduled. Miner said unions have also stalled contract talks by demanding a whole new set of worker benefits be negotiated in the first contract, even though a benefits package was already in place and should not come up for review in initial contract talks.

“What we have generally seen,” she said, “is a decrease in claims of unfair labor practices and a labor relations environment that is a little bit more stable.”


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