Business and Liberals set to deal with Labour

It didn't take long ...

The BC Business Council has raised the issue of allowing replacement workers (scabs) during labour disputes on its website. The Council wants the BC Liberal government to revamp labour
laws to permit the use of scabs during a strike or lock out.

Fraser Institute made public a list of changes a re-elected Liberal government needed to make with respect to labour relations in our province. Politics in BC commented on these possible changes on April 15, and that seems to be the end of the discussion as far as the provincial election went.

Yesterday, August 2, the BC Business Council added to its website a paper on industrial relates calling for an end to the ban on scabs. The paper entitled, "The Replacement Worker Ban in BC: It's origin and Impact." Research Assistant Aruna Ranganathan prepared the paper for the BC Business Council, relies heavily on the work of Peter Crampton.

Crampton published a report in September 1999 titled "Impacts of Strike Replacement Bans in Canada". The Crampton et al paper concludes,

"In essence, in a typical contract renegotiation in large bargaining units the union stands to gain almost $3 million and the firm stands to lose almost $5 million over the life of the contract if a legislative ban on replacement workers is in place.

The fact that the gain to the union is less than the loss to employers reflects the fact that approximately $2 million of lost wages and output is a real resource cost -- lost from the system as a result of the higher strike incidence and duration.

With such large losses and redistributive effects from one party to the other, associated with almost $8 million being "on the table" in each bargaining round with respect to this issue, it is not surprising that the legislative ban on replacement workers generates such intense controversy."

Not surprisingly, employer groups have fought almost as hard against a ban on replacement workers as they do with certification of unions. One of the few bargaining leverages a union has is the withdrawal of labour. Without that tool an employer can prepare for a strike or lockout and have scabs ready to work. The incentive for an employer to reach an agreement will be removed as they will be able to with good planning continue to operate while the regular workforce in on strike or lockout pay.

The paper argues further that there is no incentive for a union to reach an agreement under the current rules. That would be the case if the union were able to replace the wages of its members for the time they were on strike. That is not the case. A union defense (strike) fund is built up over time and is not something it can readily replenish. The myth around rich unions is just that, a fabrication perpetrated by business interests in the ongoing effort to demonize unions.

Unions were created to protect workers interests much like insurance policies protect us in the event of loss, they are there to assist workers with the administration and an employer's compliance to the rules both have agreed to live by. It really is not unlike many agreements made in business, where one company or individual makes an agreement to do something for someone else.

Big oil companies have franchise agreements with many operators of their service stations. These agreements require the person operating the store to comply with a set of conditions. Those conditions can require an operator to buy a certain product from a specific supplier even when the cost maybe higher than where you can buy it elsewhere or to provide a standard level of service.

Unions are in fact a result of the free market, rather than a hindrance, they are an evolution of that market. No market of course is ever really free, if it were so, we could terminate business contracts whenever we wanted. If someone came along with a better deal, or we just did not like the look of the person supplying the service or product. We also curb the market from complete monopoly in many cases unless there can be demonstrated public benefit from doing so.

Public benefit was the reason for public auto insurance. It was possible to create the conditions for cheaper insurance for people with one entity. We do it in transportation, where we restrict operations on some routes to only certain companies. This is done largely to ensure a needed service can be provided.

Business efforts to end the ban on scabs have more to do with building an advantage for the employer. Both parties in a strike or lockout have financial pressures applied to them. The employer cannot provide the same level of service or product if they have only management and or ownership working and employees lose their income and face a decreased financial resources despite what the Business council wants us to believe, unions can not replace wages to striking or locked-out members.

The change being requested by the BC Business Council is only the beginning of changes the business community wants implemented. On April 13th the Fraser Institute ran an editorial calling for further changes to the Labour Code in BC. The changes reported here at Politics in BC were not raised during the election other than one question to then Minister of Labour;

Graham Bruce from a reporter on the possibility a re-elected Liberal government would end the ban on replacement workers. Bruce waved it off and said the government had no plans to do that. This morning new Labour Minister, Mike De Jong has stated that the government is not planning any changes, it will however listen to those being brought forward by anyone.

This is where the situation has the potential to get ugly. The BC Liberals have run over union rights in BC, making changes to the Labour code, tearing up contracts and preventing unions and employers from signing contracts that prohibit contracting out of services. Where are we headed in BC? I suggest the changes being put up now by the business council are being done to create some semblance of public support for the changes it wants government to make.

The Fraser Institute has a significant list of changes they state are required. From their editorial ...

"Some changes that would improve flexibility and balance include allowing workers a choice as to whether to join and financially support a union; removing the ability of unions to impede investments in new machinery, equipment and technologies; allowing the renegotiation of collective agreements when companies are sold, and permitting the use of replacement workers during strikes."

That is a pretty drastic overhaul of the labour code in BC. Such a change would see further decline of workers salaries, benefits and join BC in the race to the bottom. The changes may entice people to invest in BC but is it required to do this? I suggest it isn't given BC and Canada rate comparably with many of our western trading partners.

The BC Government is facing a large and potentially damaging couple of years ahead of them. Large sectors of workers in BC will be looking for new contracts as old ones expire. After four years of fewer strikes and lockouts, the government will likely not get away so lucky this term.

Government workers have seen lost jobs, reduced job security and wage freezes for the last four years. Health workers saw their wages slashed by 15%, jobs contracted out and job security eliminated. Teachers has their last contract imposed last time out, nurses and doctors want big increases and the lowest paid, those in community services had a 4% cut to wages that were already low and a delayed implementation of a pension plan until 2006.

Today Cominco and Telus workers are on strike, independent truckers in construction stopped working in order to get funds to pay for their increased fuel costs and we have just gone through a lengthy dispute at the Vancouver Port over fuel costs. Despite rising fuel costs companies were not willing to provide independent truckers with a fuel increase.

What will 2005 and the next year bring? I expect the labour climate will heat up a lot. The Liberals can look at this in one of a couple of ways. They can say the heated labour climate is a result of unbalanced labour law or they can legislate workers back to work. These efforts will only serve to heighten tensions in BC and the mood among workers will become angrier.

Could we face a general strike that was so close to happening during the Hospital Employees Union strike? The Liberals have a chance to move back to the centre and prevent this. Do the Liberals want labour peace heading into the Olympics? That is something they cannot count on if they embark on wholesale changes to the labour law or turn to legislating workers back to work.

A clue to the BC Liberals thinking came early this year when the head of the Vancouver Olympic committee mentioned they would be seeking a six-year contract with the union trades that would prevent any strikes or lockouts. A government minister and the non-union trades responded that it wasn't needed. We will see.

Tags: Victoria, BC, Health, Politics, BC Liberals, NDP, Gordon Campbell,Labour, Unions, Right wing, Big Business