An interim report on Ontario’s workplace rules tabled many far reaching options for labour law reform including a new approach to collective bargaining aimed at smaller employers.

In the spring of 2015, the Government of Ontario initiated its Changing Workplaces Review to determine what changes, if any, should be made to the province’s labour laws in light of the fact that, in the government’s own words, “non-standard employment (which includes involuntary part-time, temporary, self-employment without help and multiple job holders) has grown almost twice as fast as standard employment since 1997”.

The specific focus of the Review is on possible changes to the Ontario Employment Standards Act (ESA) and Labour Relations Act (LRA). The ESA provides a minimum set of workplace standards that apply to all Ontario workers (albeit with many exemptions) while the LRA governs union-employer relations.

On July 27, 2016, Changing Workplaces released an interim report. The report canvassed a large number of issues affecting Ontario’s workplaces and provided a broad array of options to address each issue. For the majority of workplace issues canvassed, options presented included both maintaining the generally inadequate “status quo” as well as options that would significantly increase the protections provided to the province’s workers through fundamental and far reaching changes to the ESA and LRA.

In broad terms, the Interim Report:

concluded that there are “too many people in too many workplaces” not receiving their basic rights guaranteed under the ESA and LRA.

came to two general ESA conclusions: the administration and enforcement of the ESA should be strengthened; and there should be a comprehensive review and reform of exemptions from ESA protections. An example of the kinds of exemptions that the report is concerned about are the many occupations (liquor servers, etc.) that are exempted from ESA provisions related to minimum wage and hours of work.

reviewed what it deems a growing problem of employer misclassification of employees as independent contractors (and therefore not covered by the protections provided by the ESA or LRA), and the use of temporary workers (deployed through temporary help agencies, etc.) who are also not covered by many provisions in Ontario labour law. The potential options identified to address these problems include: expanding the definitions of what constitutes an “employee” and an “employer”; extending the ESA’s minimum standards to “dependent” contractors (a category of worker somewhere between an employee and an independent contractor); and reviewing existing ESA exceptions and special rules (including exemptions to overtime and hours of work).

examined a range of options that would support the enhancement of union rights, including the potential expansion of successor rights provisions to the contracting out of services, card certification (i.e. no vote required for union certification above a designated threshold of signed union cards), automatic access to first contract arbitration, and a possible prohibition on replacement workers (i.e. a ban on strike breakers); and

surveyed a number of issues related to termination of employment and severance pay. Significantly, one of the issues under consideration is whether the ESA should adopt “unjust dismissal” provisions, similar to those already in federal and Quebec legislation.

Although almost all the above interim report sections include options that would significantly change the rules governing Ontario’s labour market, perhaps the most surprising feature of the report was the prominence given to various options related to what the report calls “Broader-based Bargaining Structures”. This post will explore the debate on broader-based bargaining options that the interim report has kicked off.

First, some background on Ontario’s current labour relations framework.

Broader-based Bargaining – why now?

For the most part, the current industrial relations system in Ontario is rooted in the Wagner Act approach to collective bargaining. Under the Wagner Act model, it is assumed that the collective bargaining process will occur between one union and one employer at one location. For three or four decades following the war, this model was useful for workers employed in large, single site workplaces. However, in the post-1980 period, this model has been increasingly out of synch with a changing labour market.

For example, in the past 25 years the proportion of workers in smaller and “non-traditional” workplaces has been growing quickly. In fact, as of December 2015, there were 1.17 million businesses in Canada and of these, 1.14 million (97.9 percent) were small businesses, 21,415 (1.8 percent) were medium-sized businesses and 2,933 (0.3 percent) were large enterprises. In 2015, more than 85 per cent of workplaces in Ontario had fewer than 20 employees and nearly 30 per cent of all Ontario workers were employed in these small workplaces. It is important to note that these workplaces are generally associated with low wages, high rates of part-time, temporary, and contract jobs and an absence of health and pension benefits. Recent immigrants, women, and visible minorities are typically overrepresented in jobs in this sector.

Moreover, this sector of the economy has extremely low rates of unionization as the economics of organizing and servicing small workplaces is daunting. Employers such as Walmart, MacDonald’s and Tim’s devote massive resources to keeping unions out of their shops and the resources unions must deploy to even gain a toe-hold with such employers is enormous.

In summary, for sectors of the economy where small workplaces are prevalent and non-traditional work prevails, the current structure of collective bargaining rooted in the single-employer, Wagner Act model no longer allows workers meaningful access to collective bargaining. This is where the notion of broader-based bargaining comes in – it expands the opportunity for collective bargaining to workers who currently face barriers to organizing under the traditional model. With the right broader bargaining regime, the hope is that more workers will receive the benefits of unionization – improved wages, benefits and working conditions – as well as stronger enforcement of legislated workplace standards.

The Changing Workplaces interim report proposed several possible broader-based bargaining regimes but based on a review of third party submissions following the release of the interim report, the leading candidate amongst possible broader-based bargaining options is something commonly referred to as the Baigent-Ready model (or just the B.C. model). What follows is a brief discussion of the main features of Baigent-Ready.

What is the Baigent-Ready model?

In 1992, the B.C. government appointed a special panel of advisors to review its labour legislation. The advisers were John Baigent and Vince Ready on the labour side and Tom Roper on the management side. The report issued by the advisors included a recommendation for a sectoral certification procedure which would apply in sectors “historically underrepresented” by trade unions as determined by the B.C. Labour Relations Board, where the average number of employees at work locations within the sector was less than 50. The sectoral proposal was not supported by Tom Roper and was not implemented by the NDP government of the day.

Under the B. C. proposal, sectors were defined as geographic areas, such as a neighbourhood, city, metropolitan area or province, containing similar enterprises with employees performing similar work. An example of such a sector would be “employees working in fast food outlets in Burnaby” (Government of British Columbia, 1992, pp. 31).

Once a historically underrepresented sector is identified, then any union that can obtain at least 45% support in each of two “eligible” workplaces in the sector can trigger a certification vote (45% is the B.C. threshold for the proportion of the workforce at a given location which needs to sign cards – Ontario’s current threshold is 40%). The union would then have to win a majority in a secret ballot vote of all employees combined. If the union was successful, it would obtain a sectoral certification.

If a union is certified for a sectoral unit, it would then commence bargaining with all employers whose employees have been certified. For example, if Unifor obtained a sectoral certification for “fast food workers in Ottawa” and it was certified at one Tim’s and one Wendy’s, then Unifor would bargain with an employers’ council comprised of representatives from Tim’s and Wendy’s towards reaching a standard collective agreement that would apply to both employers.

Perhaps most importantly, if Unifor then organized workers at additional Ottawa Tim’s or Wendy’s locations (again, through a majority vote at each work site), or at outlets of other employers in the Ottawa fast food sector, the new outlets (and new employers if any) would be swept into the existing collective agreement. The new employers would then be able to participate in the next round of collective bargaining.

It is worth noting that, unlike the B.C. model, most Ontario unions supporting a variation on Baigent-Ready (not surprisingly, the proposal appears to have little if any employer support), propose no limit on the average number of employees in a workplace to which the new bargaining regime would apply. Again, in the original B.C. model the average number of employees at work locations within an eligible sector would have to have been less than 50. Presumably, Ontario unions are eying larger retailers such as Walmart, Costco, HBC, Canadian Tire, etc. in adopting the “no limit” position.

In summary, supporters of variations on the Baigent-Ready sectoral bargaining regime believe that the implementation of such a proposal would give unions an incentive to organize smaller workplaces by making the organization of such workplaces more cost-effective. Further, the organization of small workplaces along sectoral lines also provides the opportunity for more effective collective bargaining, as a larger number of employees increase the union’s bargaining power, with the result that there will also be more pressure on non-union employers in the industry to match the terms and conditions of employment provided under existing sectoral collective agreements. The B.C. model also preserves employee choice by requiring a majority of employees at each location to support the union for the purposes of its initial sectoral certification and subsequently if it wishes to expand the scope of its existing collective agreement.

Finally, it should also be noted that the B.C. model preserves the notion of union competition. Under the model, any union can apply to represent workers within a designated sector. So for example, Unifor might represent workers at seven different fast food outlets in Ottawa, with three different employers. The United Food and Commercial Workers might then move into the sector and organize three McDonalds and three Pizza Pizzas and bargain a collective agreement for those employers. Finally, the Steelworkers might nab a few Tim’s and a couple of Burger King’s. The B.C. model allows Unifor, UFCW and the Steelworkers to each have their own Ottawa area, fast food sector collective agreement and to bargain with one employer association comprised of the employers they have organized in the Ottawa fast food sector.

Conclusion

While the Baigent-Ready model appears to be generating more buzz than other broader-based bargaining regimes under consideration by the Changing Workplaces review, there is a legitimate argument for the notion that there is no single model of broader bargaining that will be appropriate for all sectors of the Ontario economy. After all, there are existing sectoral bargaining regimes in Ontario for construction, education and health care which are all very different than the proposed Baigent-Ready regime and these regimes very much reflect the specific dynamics of those sectors. For example, a modified version of the Status of the Artist Act would likely be more useful for freelancers in the cultural industries than Baigent-Ready.

That said, there is also a danger that if the Ontario labour movement does not clearly signal its top priorities for labour law reform to the Wynne government, that the government will make their choice for them. In other words, while it may very well be smart tactics to keep the pressure on the Wynne government on all fronts (ESA and LRA, Wagner Act and broader-based bargaining, etc.) in the period before the release of the final report (the scheduled final release of the Changing Workplaces report is February, 2017), at some point well before the tabling of actual legislation, organized labour and its political allies will have to indicate their top 3 or 4 priorities to the government. This, in turn, may very well require a choice between reforms that will strengthen the Wagner Act model and reforms related to implementing a new broader-based bargaining regime.

As the evidence strongly suggests that the single biggest factor behind the decline in private sector union density in Ontario has been labour’s inability to organize smaller workplaces in the growing private service sector, serious attention must be paid to new sectoral approaches to collective bargaining such as the Baigent-Ready model. Changing Workplaces represents a once in a generation opportunity to put in place a collective bargaining regime that will reverse the decades long decline in private sector union density in Ontario and a failure to do so virtually ensures the continued stagnation of private sector wages rooted in a lack of bargaining power on the part of Ontario’s private sector workers – particularly those in the service sector.

In the best of all possible worlds, Ontario labour wouldn’t have to choose between its top priorities on the Wagner Act side (card certification, first contract arbitration, etc.) and the implementation of Broader-based Bargaining (BBB) regimes. But if the Wynne government sends a clear signal to labour that it is unwilling to legislate significant LRA changes on both the Wagner Act and BBB fronts (in addition to ESA changes), labour needs to be realistic about where its future growth lies and forcefully present something like Baigent-Ready as a top priority.

Ontario business is already mobilizing to oppose any and all progressive reforms to Ontario’s labour laws and once the final Changing Workplaces report is released, business will step up its efforts and present a united front aimed at stopping any legislative change it believes will strengthen labour bargaining power in the province.

In other words, the future of organized labour in the private sector is on the line and the fight over LRA reform that will play itself out over the next 12 months in Ontario is one that labour and its political allies simply can’t afford to lose.