Looking Ahead to Labour Relations in 2011

Union militancy appears unabated in manufacturing sector
By Danielle Harder
|Canadian Labour Reporter|Last Updated: 01/19/2011

With the global economy still in a precarious state, labour unrest should be somewhat muted in 2011, with the exception of the manufacturing industry, according to the Conference Board of Canada’s report Industrial Relations Outlook 2011: From Conflict to Cooperation?

The state of trade unions

While organized labour in Canada is in decline, trade union density is estimated at 29.6 per cent – higher than the European Union and significantly higher than in the United States. In 2009, Canada experienced 2.2 million working days lost compared with France (1.4 million), Britain (450,000), Germany (125,000) and the U.S. (120,000).

According to the report, the fact that Canada’s economy and workforce are substantially smaller than those countries, Canadian workplaces are “excessively prone” to job action by international standards.

However, recent settlements such as the agreement between the federal government and nearly 100,000 members of PSAC — reached a year before the expiry of the current agreement and with a 5.3 per cent wage increase over the next three years — suggests “a degree of pragmatic goodwill” in public sector bargaining, according to the report’s authors.

In contrast, there has been only a modest decline in work stoppages in the manufacturing sector. The CAW’s “Enough is Enough” campaign against concessions in the auto parts sector foreshadows potential unrest in manufacturing.

The economic climate

The Canadian economy lost 417,000 jobs during the recession. While most of that 2 per cent decline has been recaptured, according to the report, the impact of those losses was uneven. Most came in the manufacturing and construction sectors in Ontario, Alberta, British Columbia, Quebec and Newfoundland and Labrador.

At the same time, labour markets remained tight in some regions, particularly the Prairies and in sectors requiring skilled workers, such as health, management and trades.

Productivity continues to be a concern. Statistics Canada data suggests Canada has underperformed on productivity growth for decades relative to other countries, particularly the U.S. The result is an income gap with Americans estimated at about $7,000 per capita.

The Conference Board expects demographic pressures to further tighten labour markets which may lead to substantial wage increases that can only be sustainable if productivity increases.

Collective bargaining in 2011

There will be considerable collective bargaining in 2011 with more than 480,000 unionized workers affected. The majority of those employees are in the health and education sectors.

Outside of highly competitive sectors such as manufacturing and food services, the Conference Board expects to see a greater degree of co-operative labour relations in the coming year, particularly with respect to issues such as productivity, workload, labour shortages and diversity.

Key issues for management will be fitness for duty (including broader issues of safety, such as fatigue) and ability to contract out.

Contracting out and privatization will also be important issues for labour in 2011, as will bigger picture issues, such as increased social responsibility and pensions. Unions, especially in manufacturing, will also be wary of companies using the recession to demand concessions at the bargaining table.

Compensation

Overall, average wage settlements in 2011 are expected to be 0.2 per cent lower than the actual wage increases negotiated in 2010.

Among unionized workers, the average wage increase projected for year one of a collective agreement is 1.8 per cent.

It should be noted that while public sector workers fared better than those in the private sector during the recession — in part because of multi-year agreements negotiated before the bottom fell out of the economy — that trend is expected to reverse in the coming year.

Meanwhile, wages among non-unionized workers are projected at 2.8 per cent overall, ranging from 3.6 per cent in oil and gas, to 1.4 per cent in education and health.

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