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Canadian Labour Policy in the
Aftermath of Fraser
1.
Richard P. Chaykowski*
INTRODUCTION
It is not surprising that the Supreme Court of Canada’s decision
in Ontario (Attorney General) v. Fraser1 was highly anticipated in
labour law circles. Perhaps somewhat less noticed was the fact that it
was also greatly anticipated among government policy-makers, who
saw it (together with the Court’s 2007 decision in B.C. Health2) as
having the capacity to shape future policy options for labour relations
legislation. The Fraser case represented a significant “policy event”
because it involved major issues concerning the impact of the
Canadian Charter of Rights and Freedoms. Depending on how the
case was decided, it could either impose significant constraints on
governments in formulating labour relations policy or give them considerable latitude in that area.
Before B.C. Health, labour relations law in Canada was largely
framed and driven by government policy-making. It is also important
to emphasize that it was very purposeful policy actions by the British
Columbia government which precipitated that case. In this light, the
Supreme Court decision in B.C. Health can be viewed as a significant victory for the labour movement on issues of fundamental rights
* Professor, School of Policy Studies, Queen’s University. Some of this paper follows, and builds upon, my submissions as an expert witness (for the unions) in
B.C. Health, and in Fraser (for the Attorney General). I have benefited from
comments received at the Workshop on the Implications of the Fraser Case,
held on June 13, 2011 at the Centre for Law in the Contemporary Workplace,
Queen’s University, and from Kevin Banks and Bernie Adell.
1 2011 SCC 20, [2011] 2 SCR 3. Unless otherwise indicated, when I refer to the
Supreme Court decision in Fraser, I mean the majority decision written by
Chief Justice McLachlin and Justice LeBel.
2 Health Services and Support-Facilities Subsector Bargaining Ass’n v British
Columbia, 2007 SCC 27, [2007] 2 SCR 391.
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and principles, as well an assertion of the preeminence of “legal policy” over “government policy.”
From a policy viewpoint, the Fraser decision was a natural if
not inevitable extension of B.C. Health, where the Supreme Court
had left unanswered large questions about the labour relations model
and the operational form of employee associational and bargaining
rights. In Fraser, the Ontario government forced the issue by enacting a new framework (in the form of the Agricultural Employees
Protection Act, 20023 — the AEPA) for giving agricultural workers
the right to associate and make representations to employers — a
framework which departed from the standard type of collective bargaining machinery set out in the Ontario Labour Relations Act4 (the
OLRA). This created the need to resolve the issue of whether
employee associational rights manifested through a trade union had
functional meaning (or were in fact “hollow”) if the union had no
assurance of a viable mechanism (specifically, collective bargaining)
to give economic and social effect to those rights.
Fraser was a specific instance of the more general question of
whether any particular regulatory framework for labour relations is
to be “constitutionalized.” The Court in Fraser clearly answered that
question in the negative, by rejecting the view of the Ontario Court of
Appeal that the constitutional commitment to freedom of association
and collective bargaining required the imposition of several key elements of the Wagner model (in particular, the rule that a union has to
obtain majority support in a unit of employees in order to have the
right to bargain collectively, and that it then becomes their exclusive
bargaining agent).5 This outcome has significant implications for
Canadian governments because it clarifies, considerably, the scope
they have to choose their labour relations policy approaches.
In addition, the Fraser decision has much more clearly identified the constraints on governments in terms of policy choices which
impinge upon the existing framework, and on the rights which that
framework provides and the outcomes it generates. This is especially
relevant during periods when some governments are particularly
3 SO 2002, c 16.
4 SO 1995, c 1, Sch A.
5 Fraser v Ontario (AG), 2008 ONCA 760, 92 OR (3d) 481.
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inclined to introduce reforms which affect the established ways of
conducting collective bargaining (e.g. changes to its scope) or which
affect bargaining outcomes (e.g. limitations on employment security
or wage levels).
Before the advent of the Charter, government policy was the
basis for determining what associational rights there would be in the
workplace, how those rights would be operationalized, and what role
collective bargaining would have. The Charter created a new basis
for determining those matters. B.C. Health and Fraser make apparent
the full potential of the Charter in this regard, and signal the emergence of Charter-based legal decisions as a transformative factor and
a potential counterweight to labour relations policy generated by legislatures.
In this paper, I appraise the Fraser decision from a labour relations policy perspective. I place the decision in the historical context
of long-term labour relations policy-making in Canada, I assess the
policy-relevant pressures it brings on the traditional labour relations
system, and I consider its implications for future policy-making.
2.
THE CONTEXT OF CANADIAN LABOUR
RELATIONS POLICY SINCE PC 1003
Early twenty-first century labour relations policy in Canada continues to reflect mid-twentieth century policy as established in 1944 in
the federal government’s order-in-council PC 1003, which was modelled on the United States Wagner Act and which applied to the entire
country under federal wartime emergency powers. This Wagner-based
framework was the product of government-led policy that was largely
motivated by the need to maintain industrial peace in the interests of
wartime production, and that went well beyond either established
labour law or reliance on employer-based rules and policies. Aside
from the concern of the federal government to ensure industrial peace,
a number of provinces had already begun to move their labour relations legislation in the direction of the Wagner framework:
The provinces, just before the war, had taken some halting and ineffectual legislative steps in partial imitation of American law. During the war stronger
provincial legislation began to appear on the statute books. Especially important was the Ontario Collective Bargaining Act of 1943. While purporting to
deal with the problems of freedom of association and right to negotiation, this
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act went beyond the pre-war laws of other provinces by providing machinery
of administration and enforcement. With its passage Ontario was brought
more or less into line with the United States with regard to labour-relations
legislation . . . .6
PC 1003 represented a significant progression, ushering in a new,
stable era of labour relations policy that would prove to be transformative for the labour movement as well as for the conduct of labourmanagement relations. However, rather than being the discrete shift
that it is often portrayed as being, PC 1003 was the logical outcome
of a multi-jurisdictional process of policy change over time.
Although it was heavily influenced by the Wagner Act, it also drew
on the 1943 Ontario statute and on federal statutes that had existed
since the early years of the twentieth century.7
The main contribution of the original Wagner policy was to
establish a functional framework within which the basic rights of
employees could be determined in accordance with their economic
interests and with the idea of workplace democracy. Labour relations
legislation defined the basic mechanisms by which workers could
attain some measure of freedom of association and freedom of
expression (i.e. through a union) and could participate in the governance and regulation of their working lives (i.e. through the web of
rules created by the collective agreement, through grievance and
arbitration systems, and through access to quasi-judicial boards):
The whole development can be considered as a movement from interests to
rights. The policy of 1944 had established clearly in statutory form the rights
of the individual in relation to both a union and employment: the right of
workers to be represented by a union or independent association, the right of
such a representative to collective bargaining with the object of concluding a
collective agreement, the right of the employer and union signing an agreement to industrial peace, the right of such an employer to freedom from additional demands backed by strike threats, and the right of employees to a
peaceful and impartial procedure for grievance settlement.8
6 HD Woods, S Ostry & M Zaidi, Labour Policy in Canada, 2d ed (Toronto:
MacMillan, 1973) at 27.
7 Those federal statutes were the influential Conciliation Act of 1900 and the
Industrial Disputes Investigation Act of 1907. See Task Force on Canada Labour
Code, Part 1, Seeking a Balance (Ottawa: Minister of Public Works &
Government Services, 1995) at 13 [Sims Task Force]; Woods, Ostry & Zaidi,
supra note 6 at 27.
8 Woods, Ostry & Zaidi, supra note 6 at 346.
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The policy of the Wagner model represented a clear shift from previous government policy, away from an emphasis on mediating the
conflicting interests of employers and workers and toward a more
coherent and robust policy which continued to focus on balancing
interests but also ensured a higher level of worker rights. However,
the rights that were to be protected were still defined by the government of the day, and were not enshrined in any constitutional charter.
In the economic sphere, the new labour relations policy clearly
shifted the balance of economic power in favour of the employee, by
further legitimizing unionization (collective action) and by circumscribing the rights of employers in the workplace.
After the end of World War II, the federal and provincial governments further advanced labour relations policy by creating more
comprehensive private-sector legislation9 enforced by new administrative tribunals. In the 1960s, through new legislation that was consistent with the basic principles enshrined in PC 1003, governments
across Canada began the process of extending the Wagner model to
employees in a range of occupations and industries in the broader
public sector, including government employees (e.g. through the federal Public Service Staff Relations Act in 1967).10 These extensions
of the right to form unions and bargain collectively had the effect of
rapidly increasing union membership and union density levels in
Canada.11 Taken together, they moved trade unions and collective
bargaining from the periphery of employment relations and labour
markets to the focal point, making them the centerpiece of postWorld War II labour policy.
9 Sims Task Force, supra note 7 at 13.
10 On the establishment of the right to forms unions and bargain collectively in the
federal public service, and on the influence of the Wagner Act, see Advisory
Committee on Labour Management Relations in the Federal Public Service,
Identifying the Issues: First Report (Ottawa: May 2000) at 20.
11 Between 1961 and 1981, the number of public-sector unions increased from 15
to 71, their membership grew from 182,887 to 1,347,073, and membership in
public-sector unions increased from 12% of total union membership in Canada
to 38.6%. See J Rose, “Growth Patterns of Public Sector Unions” in M
Thompson & G Swimmer, eds, Conflict or Compromise: The Future of Public
Sector Industrial Relations (Montreal: Institute for Research on Public Policy,
1984) at 93 & 96.
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In the period extending roughly from the 1950s to the end of the
1980s, the Wagner policy framework flourished within a context of
widespread economic expansion, accompanied by significant labour
force growth in industries where unions were already concentrated.
Moreover, in certain industries, unions benefited from somewhat
protected domestic markets.12 The overall strength of the growing
labour movement politically backstopped the stability of the Wagner
model, and the labour relations of unionized employers were centered on that model. Under these conditions, the labour relations policy framework was largely stable.
Over the years, a number of task forces and commissions established by federal and provincial governments made recommendations aimed at updating and improving the legislation and the
functional machinery of labour relations, but the basic framework
remained unchanged. The reports of those task forces and commissions were notable, however, in that they enunciated broader principles that were consistent with the shift in the focus of policy toward
ensuring basic worker rights — moving beyond the original objectives of balancing interests and regulating conflict that had been
embodied in the Wagner Act and in PC 1003. A fundamental theme in
many of those reports was the importance of unions in furthering
workplace democracy. For example, in 1968 the Woods Task Force
explicitly identified the role of unions in achieving “industrial
democracy,” and therefore in advancing employees’ basic workplace
rights.13 “Freedom to associate and to act collectively,” the Woods
Report concluded, “are basic to the nature of Canadian society and
are root freedoms of the existing collective bargaining system.”14
In the mid-1990s, the Sims Task Force again affirmed several
basic principles that reflected the general focus of labour policy on
worker rights of association and collective action: furthering “the
social purpose of collective bargaining as an instrument for the
12 See R Chaykowski & A Verma, eds, Industrial Relations in Canadian Industry
(Toronto: Holt, Rinehart & Winston, 1992); A Verma & R Chaykowski, eds,
Contract and Commitment: Employment Relations in the New Economy
(Kingston, Ont: Queen’s University IRC Press, 1999).
13 Task Force on Labour Relations, Canadian Industrial Relations: The Report
(Ottawa: Privy Council Office, 1968) at 97 [Woods Task Force].
14 Ibid at 138.
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advancement of fundamental freedom in Canadian industrial society”; “ensur[ing] access to the fundamental rights to associate and act
collectively”; and “encourag[ing] voluntarism and good faith negotiations rather than prescrib[ing] results.”15
After Fraser, the emerging policy issue is whether governments
— now more confident that the Charter subjects them only to the
most basic of constraints — may begin to move away from some of
the explicit tenets of labour relations policy enshrined in the Wagner
model, and from the general policy focus on worker rights that
emerged in the decades after PC 1003. The Ontario government’s
strong policy stance on maintaining the Agricultural Employees
Protection Act in force is a prime indicator of this possible shift away
from the Wagner model, and it is consistent with a move by governments to view unions and collective bargaining as but one among
many mechanisms that can protect Charter rights. This may open the
door wider to new policies that seek to establish and promote forms
of employee representation other than traditional unions.
3.
THE RELATIVE POWER OF LABOUR AND
MANAGEMENT, AND THE ROLE OF COLLECTIVE
BARGAINING IN THE FRASER DECISION
The operation of competitive labour markets is associated with
a fundamental source of an imbalance of power between employees
and employers16 — a point recognized by Adam Smith in 1776:
What are the common wages of labour, depends every where upon the contract usually made between those two parties, whose interests are by no means
the same. The workmen desire to get as much, the masters to give as little as
possible. The former are disposed to combine in order to raise, the latter in
order to lower the wages of labour. It is not difficult to foresee which of the
two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into compliance with their terms.17
15 Supra note 7 at 41.
16 See J Dunlop & B Higgins, “ ‘Bargaining Power’ and Market Structures” (1942)
50:1 Journal of Political Economy 1.
17 Adam Smith, An Inquiry into the Nature and Consequences of the Wealth of
Nations (New York: Modern Library, 1994) at 75 (Bk I, c VIII) (1st edition
1776).
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A consequential power asymmetry between employers and employees is still recognized as inherent in the nature of contemporary markets and production systems, and is taken to be further exacerbated as
markets and production systems become increasingly globalized —
or, in the public sector, as the government assumes the roles of both
employer and lawmaker.18 A central focus of labour relations policy
has therefore been on functionally addressing that power imbalance.
From early on, a critical issue has been whether the right to form and
join an employee association can meaningfully be separated from the
means by which that association attains greater relative power and is
therefore better positioned to achieve its workplace objectives.
The original crafting of the National Labor Relations Act in the
United States (explicitly)19 and PC 1003 in Canada (implicitly) recognized the fundamental inequality of economic power between
employers and their employees; and therefore put practical emphasis
on the ability of employees to combine as well as to bargain collectively. Both the American and the Canadian policy that emerged from
the Wagner model clearly envisaged the successful rebalancing of
employee-employer power relations as hinging on the government’s
conferring on employees the “right” to associate in the form of
unions as well as the “right” to bargain collectively. The guarantee of
both of these rights in legislation appears to reflect recognition by
policy makers that it was a functional necessity to grant them jointly.
18 Ian Shapiro, Democratic Justice (New Haven: Yale University Press, 1999) at
145 & 165. See also Paul Weiler, “Promises to Keep: Securing Workers’ Rights
to Self-Organization under the NLRA” (1983) 96:8 Harv L Rev 1796 at 1822, on
the employer-employee power asymmetry. In the public sector, the government’s ability to invoke special labour relations legislation (including back-towork legislation) adds to the power weighing against unions and employees.
19 The preamble to the National Labor Relations Act, 49 Stat 449, included the
following:
The inequality of bargaining power between employees who do not possess
full freedom of association or actual liberty of contract, and employers who
are organized in the corporate or other forms of ownership association substantially burdens and affects the flow of commerce, and tends to aggravate
recurrent business depressions, by depressing wage rates and the purchasing
power of wage earners in industry and by preventing the stabilization of competitive wage rates and working conditions within and between industries.
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In reflecting on labour relations law reform in the 1980s, Paul
Weiler acknowledged that although trade unions and collective bargaining are not one and the same, unions serve as the instrument
through which collective bargaining occurs.20 Employees associate in
order to achieve a rebalancing of the power relations between
employers and individual employees, and in order to secure their
economic well-being and achieve greater workplace rights.21 In policy terms, unions are assumed to function primarily through welldefined rules regarding collective bargaining and work stoppages,
and their existence is intrinsically identified with their mode of collective action.
The Fraser decision directly addresses the question of the need
to guarantee both the right to unionize and the right to bargain collectively as legal rights under the Charter, and therefore has significant
implications for labour relations policy. From a policy viewpoint,
while Fraser essentially affirms the holding in Dunmore22 that the
capacity to form a union can fulfill the right to freedom of association,
it also affirms that the particular approach to unions and to collective
bargaining which is set out in the Wagner model, and which is predominant in Canada, is not necessary in order to fulfill Charter rights.
In the majority judgment in Fraser, Chief Justice McLachlin and
Justice LeBel clearly frame the central policy-relevant issue in these
terms: “The ultimate question is whether section 2(d), properly understood and applied, requires the Ontario legislature to provide a particular form of collective bargaining rights to agricultural workers, in
order to secure the effective exercise of their associational rights.”23
Addressing that issue, the majority judgment concludes as
follows:
. . . Health Services does not support the view of the Ontario Court of Appeal
in this case that legislatures are constitutionally required, in all cases and for
all industries, to enact laws that set up a uniform model of labour relations
20 Paul Weiler, Reconcilable Differences: New Directions in Canadian Labour
Law (Toronto: Carswell, 1980) at 11.
21 Weiler, supra note 18 at 1822 n 181, expressed the functional dimension of
unions in describing them as “the medium through which workers bargain collectively about their conditions of employment . . . .”
22 Dunmore v Ontario (AG), 2001 SCC 94, [2001] 3 SCR 1016.
23 Supra note 1 at para 18.
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imposing a statutory duty to bargain in good faith, statutory recognition of the
principles of exclusive majority representation and a statutory mechanism for
resolving bargaining impasses and disputes regarding the interpretation or
administration of collective agreements . . . . What is protected is associational activity, not a particular process or result.24
The Fraser decision opens up the possibility of exploring mechanisms other than traditional collective bargaining that would enable
employer-employee negotiations, as long as those negotiations are
“meaningful” and are conducted by the parties in “good faith.” From
a policy standpoint, there may be a variety of labour relations models
that satisfy these criteria and do not involve replicating the standard
Wagner-model machinery — just as the AEPA departed significantly,
in functional terms, from the OLRA.
4.
LABOUR RELATIONS FRAMEWORKS AS A
PRODUCT OF POLICY AND POLITICS
The choice of models for facilitating employee representation is
a matter of labour policy. A wide spectrum of such models is used in
progressive industrialized countries. For example, Germany has both
unions and works councils, as well as employee representation on corporate boards, while both union and nonunion employee representation are found in the United Kingdom, Australia and Japan. Union
representation predominates in Canada and the United States, with
non-union employee representation being permitted in Canada but not
for the most part in the U.S. (where unionization rates in the private
sector had dropped below ten percent by 200025).26 These variations in
representation models arise because governments decide, in view of
the circumstances, priorities and objectives of the day, to give effect to
24 Ibid at para 47.
25 J Delaney, “Contemporary Developments in and Challenges to Collective
Bargaining in the United States” in J Addison & C Schnabel, eds, International
Handbook of Trade Unions (Cheltenham, UK: Edward Elgar, 2003) 504.
26 See B Kaufman & D Taras, “Nonunion Employee Representation: Findings
and Conclusions” in B Kaufman & D Taras, eds, Nonunion Employee
Representation: History, Contemporary Practice, and Policy (Armonk, NY: ME
Sharpe, 2000) at 527-557; and D Taras, “Why Nonunion Representation is Legal
in Canada” (1994) 54:4 RI 763.
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specific labour policies, using approaches and models that may be
acceptable to some stakeholders but not to others.
The precise form that unions and bargaining units take on, and
the variety and complexity of mechanisms for regulating employeremployee relations, are primarily the outcome of political decisionmaking processes. The particular institutional form that unions and
collective bargaining assumed under the Wagner Act, and later under
Canada’s PC 1003, reflected policy choices that emerged from a
political process set in the context of extraordinary economic and
political circumstances. In the U.S., the Wagner Act developed as
part of the distinctive New Deal policy agenda.27 It resulted from a
political calculus, not a search for fundamental rights. The political
nature of that calculus was so evident that the Wagner Act has been
referred to as the product of an “accord” between employers, government and labour.28 The factors underpinning that accord were quite
similar in Canada and the United States.29 The fundamentally political basis of the labour relations policy-making process was well documented by U.S. Secretary of Labor Frances Perkins, who noted that
President Franklin Roosevelt was not particularly sympathetic to the
policy agenda underlying the Wagner Act.30
Kaufman and Taras have emphasized the point that the historic
decision to establish a framework for union representation and collective bargaining in Canada through PC 1003 fulfilled a political
27 “Wagner’s view, it is true, was grounded in the exigent social projects of the
mid-1930s: the drive for recovery from the Great Depression and the effort to
reconstitute a democratic, capitalist order during the class-fractured emergence
of a mass consumption economy.” See M Barenberg, “The Political Economy of
the Wagner Act: Power, Symbol, and Workplace Cooperation” (1993) 106:7
Harv L Rev 1379 at 1388.
28 See R Adams, “North American Industrial Relations: Divergent Trends in
Canada and the United States” (1989) 128:1 Int’l Lab Rev 47 at 47-49.
29 Ibid.
30 “It ought to be on the record that the President did not take part in developing the
National Labor Relations Act and, in fact, was hardly consulted about it. It was
not a part of the President’s program. It did not particularly appeal to him. All
credit for it belongs to [Senator Robert F.] Wagner.” See F. Perkins, The
Roosevelt I Knew (New York: Viking Press, 1946) at 239. See also I Bernstein,
The New Deal Collective Bargaining Policy (Berkeley: University of California
Press, 1950).
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policy objective: “Behind PC 1003 was the Canadian government’s
fear of disruptions to wartime production and the electoral danger
posed by the developing alliance between unions and an emergent
social democratic party.”31 In both the United States and Canada, the
preamble to the original Wagner-model legislative instruments
makes clear that a primary policy purpose was to ensure industrial
peace. In the words of the preamble to the Wagner Act:
Experience has proved that protection by law of the right of employees to
organize and bargain collectively safeguards commerce from injury, impairment, or interruption, and promotes the flow of commerce by removing certain recognized sources of industrial strife and unrest, by encouraging
practices fundamental to the friendly adjustment of industrial disputes arising
out of differences as to wages, hours, or other working conditions, and by
restoring equality of bargaining power between employers and employees.32
Similarly, the preamble to PC 1003 said:
Whereas it is deemed in the public interest, especially during the war period
and more particularly in industries essential to the prosecution of the war . . .
[t]hat both employers and employees should be free to organize for the conduct of negotiations between them and that a procedure should be established
for such negotiations.33
Unions have come to be acknowledged as serving broader
social policy objectives through the performance of their economic
and democratic roles — by improving standards of living for their
members, and by furthering workplace justice. Collective bargaining
is in practice considered a necessary condition of allowing unions to
achieve these outcomes.34 However, the process of conferring new
“rights” on workers was something of a by-product of a labour policy
that sought primarily to ensure economic stability. In Canada,
achieving industrial peace was especially important at the time PC
1003 was issued, because of the economic exigencies imposed by
World War II. Government labour relations policy was decided in
light of the priorities and objectives of the day, and was given effect
31
32
33
34
Kaufman & Taras, supra note 26 at 534.
National Labor Relations Act, 49 Stat 449.
Wartime Labour Relations Regulations, 1944, vol 1, No 8, at 439-450.
See the extensive discussion in R Freeman & J Medoff, What Do Unions Do?
(New York: Basic Books, 1984); and Weiler, supra note 18.
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through legislation. Then, as now, labour relations policy evolved
in accordance with the changing social and economic objectives of
governments.35
However, since the enactment of the Charter, government policy has had to be consistent with a new set of fundamental rights. The
Supreme Court’s decision in B.C. Health made it clear that policymakers would have to consider the extent to which the judicial interpretation of Charter rights might constrain government policy. In
Fraser, however, as noted above, the Court clearly concludes that the
Wagner model is not the only legitimate model for policy-makers to
consider.36 The Court further affirms that no particular form of negotiation or employee representation — in this case, the Wagner model
as embodied in the OLRA — is to be privileged over other legitimate
forms of employee association: “What is protected is associational
activity, not a particular process or result.”37
Fraser gives governments a clear indication that they are under
fewer constraints than they may have feared in adopting new and
varied policies that may fundamentally affect workers’ economic
rights and outcomes, and that may differ from the Wagner model.
Government policies aimed at providing employee representation
clearly need not, in principle, focus on unions and collective bargaining as the only acceptable institutional model; the policy door has
been opened wider to other models. The test of the constitutionality
of such models, as the Fraser majority said with reference to the
35 “From an evolutionary viewpoint, a law that is appropriate for one stage in the
development of a country’s labor movement may be ill-suited for an earlier or
subsequent stage.” See Richard Lester, As Unions Mature: An Analysis of the
Evolution of American Unionism (Princeton: Princeton University Press, 1958)
at 141.
36 Supra note 1 at para 18. In my submission as an expert witness in the Fraser
case, I said:
“The basic issue of concern is whether or not affording agricultural workers
the right to bargain collectively with employers is the only way or, in fact,
even the best way for the Ontario government to achieve the objective of
supporting and advancing the employment interests of these workers . . . .
[E]xtending collective bargaining represents but one possible set of arrangements designed to advance the economic and workplace interests of
workers.”
37 Supra note 1 at para 47.
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AEPA, is “whether the legislative scheme . . . renders association in
pursuit of workplace goals impossible, thereby substantially impairing the exercise of the section 2(d) associational right.”38
In realistic policy-making terms, this implies that governments
can put forward new operational models of employee relations, or
modifications to existing models, as long as they require that
employer-employee negotiations be “meaningful” and conducted in
“good faith.” But as the Fraser majority makes very clear in dismissing the Charter challenge to the AEPA, the onus of ensuring that
those conditions have not been met continues to rest squarely on
employees and unions; they must first make use of any statutory
enforcement machinery, and only if that machinery fails to provide
effective recourse may they then bring a constitutional challenge to
the particular governmental policy as embodied in the legislation.39
5.
FACTORS INFLUENCING LABOUR RELATIONS
POLICY AFTER FRASER
In the post-Fraser period, there will be significant pressures on
the established industrial relations system as well as on government
policy. Several broader legal, economic and political developments
over the past few decades have important implications for the future
direction of labour relations policy.
(a)
The Decline of Private-Sector Unionism, and
Growing Pressures on Public-Sector Unions
The rate of unionization in the private sector continues to
decline in Canada, from 24.4% in 1997 to 17.5% in 2011.40 This
growing “representation gap” means that an increasing proportion of
the private-sector labour force is being left without independent
38 Ibid at para 48.
39 Ibid at paras 109-112.
40 For 1997, see E Akyeampong, “A Statistical Portrait of the Trade Union
Movement,” Perspectives on Labour and Income (Winter 1997), Statistics
Canada Catalogue No 75-001-XPE, Table 2. For 2011, see S Uppal,
“Unionization 2011,” Perspectives on Labour and Income (Winter 2011),
Statistics Canada Catalogue No 75-001-X, Table 1.
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workplace representation. It also means that the reach of traditional
labour relations policy is in decline.41
Public-sector unionization levels remain at high levels (i.e. at
about 75% overall), and the membership of major public-sector
unions is strong.42 However, those unions are generally coming under
increasing pressure, as growing fiscal constraints lead governments
to contain compensation increases and to limit the right of unions to
use the strike weapon when contract negotiations fail.43 The decline
of private-sector unionization, and the defensive posture of publicsector unions due to the difficult economic conditions brought about
by the 2008 global financial and economic crisis, are likely to be
associated with a decline in the political influence of organized
labour and in its capacity to influence labour relations policy. The
41 On the notion and importance of a “representation gap,” see Daphne Taras,
“Alternative Forms of Employee Representation and Labour Policy” (2002)
28:1 Can Pub Pol’y 105; B Kaufman & D Taras, “Introduction” in Kaufman &
Taras, supra note 26; and R Freeman & J Rogers, What Workers Want (Ithaca,
NY: Cornell University ILR Press, 1999). For analyses of the current reach of
labour relations policy and the need for reform, see B Langille, ”Labour Policy
in Canada – New Platform, New Paradigm” (2002) 28:1 Can Pub Pol’y 133; G
Lowe, “Employment Relationships as the Centrepiece of a New Labour Policy
Paradigm” (2002) 28:1 Can Pub Pol’y 93; and G Trudeau, “Changing
Employment Relationships and the Unintentional Evolution of Canadian Labour
Relations Policy” (2002) 28:1 Can Pub Pol’y 149.
42 See Uppal, supra note 40.
43 With regard to pay restraint, the Ontario 2010 budget, for example, announced
the setting of “guidelines” for negotiated pay increases of zero percent for two
years:
Going forward, the fiscal plan provides no funding for incremental compensation increases for any future collective agreements. All existing collective
agreements will be honoured. As agreements are renegotiated, the government will work with transfer payment partners and bargaining agents to seek
agreements of at least two years’ duration.
Ontario, 2010 Ontario Budget. Budget Papers. Open Ontario: Ontario’s Plan for
Jobs and Growth (Toronto: Queen’s Printer) at 51-52. See also the discussion, in
Part 6 below, of recent back-to-work legislation at Canada Post and in Toronto
public transit. For analysis of the long-term tendency of governments in Canada
to impose back-to-work and related restrictive legislation, see G Swimmer & M
Thompson, eds, Public Sector Collective Bargaining in Canada (Kingston, Ont:
Queen’s IRC Press, 1995); and Thompson & Swimmer, supra note 11.
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open question is whether, as unionization rates in Canada decline, the
increasingly marginalized union movement will lose even more of its
political influence on policy outcomes.
(b)
Significantly Altered Economic Circumstances
Economic developments over the past several decades have
transformed the context within which unions function, and within
which labour relations policy is formulated. Competitive pressures
have been increased by the process of globalization,44 and by the shift
in Canadian economic policy (domestically) toward deregulation and
privatization45 and (internationally) toward the development of free
trade agreements.46 Employment relationships are being altered by,
among other things, the rise of non-standard and contingent employment.47 In addition, there is the prospect of a prolonged period of
slow economic growth and significant government fiscal constraints.
These factors have led governments to shift their policy emphasis
away from labour relations and toward broader labour market policies that focus on worker adjustment (e.g. unemployment insurance
training and retraining, and education). Insofar as this change in
emphasis means that governments no longer view unions and collective bargaining as the centerpiece of labour policy, it has worked
against Canadian unions.
44 See R Chaykowski & M Gunderson, “The Implications of Globalization for
Labour and Labour Markets” in R Chaykowski, ed, Globalization and the
Canadian Economy: The Implications for Labour Markets, Society and the State
(Kingston, Ont: Queen’s University School of Policy Studies, 2001) 27.
45 See A Roberts, “Altered States: Public Sector Restructuring and Government
Capacity” in Chaykowski, supra note 44 at 105.
46 These now include the North American Free Trade Agreement and separate
agreements with Honduras, Panama, Jordan, Columbia, Cost Rica, Chile, Israel
and the European Free Trade Association countries of Norway, Switzerland,
Liechtenstein and Iceland. See Foreign Affairs & International Trade Canada,
available at <http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/index.aspx?lang=en&view=d>.
47 See M Gunderson & WC Riddell, “The Changing Nature of Work: Implications
for Public Policy” in WC Riddell & M Gunderson, eds, Adapting Public Policy
to a Labour Market in Transition (Montreal: Institute for Research on Public
Policy, 2000).
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The pressures on Canadian labour relations policy arising from
globalization are likely to be determinative for the future of unions.
Globalization has had a direct impact on employment relations by
shifting the balance of power decidedly in favour of employers. It has
given management the option of avoiding unions altogether by locating plants beyond a union’s established geographic scope. The resulting process of global de-unionization has seriously compromised the
standard union objective of taking wages out of competition in order
to maintain the “relative wage advantage” of union members.48 The
current era of globalization mirrors the continental expansion of
American markets in the past, in terms of its impact in increasing the
employer’s advantage in the employment relationship.49
(c)
The Advent of the Charter
The Charter created a new avenue, entirely separate from the
use of the traditional levers of political influence and economic pressure, to shape government policies which determine how workers’
collective rights are defined and protected through legislation. Key
decisions in such cases as Delisle50 and Dunmore51 illustrated the
importance of the Supreme Court’s role in defining the rights of workers independently of the conferral of those rights through government
policy. Those decisions, taken together with B.C. Health and Fraser,
48 See Chaykowski & Gunderson, supra note 44 at 42.
49 A century ago, John R. Commons’ landmark examination of the experience of
American shoemakers from 1648 to 1895 traced the influence of the expansion
of markets on labour and price bargains:
Thus it is that the ever-widening market from the custom-order stage,
through the retail-shop and wholesale-speculative stage, removes the journeyman more and more from his market, diverts attention to price rather
than quality and shifts the advantage in the series of bargains from the journeyman to the consumers and their intermediaries.
See JR Commons, “American Shoemakers, 1648-1895: A Sketch of Industrial
Evolution” (1909) 24:1 Quarterly Journal of Economics 39 at 67. The consequences of this process directly parallel the effects of globalization, as employers seek to reduce labour costs with the worldwide expansion of markets.
50 Delisle v Canada (Deputy AG), [1999] 3 SCR 1016.
51 Supra note 22.
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and with a growing number of other Charter cases related to labour,
point to a growing role for the judicial system in shaping the parameters (if not the substance) of contemporary labour relations policy.
(d)
Recent Developments in American Labour
Relations Policy
Recent developments in the United States may well influence
Canadian labour relations policy, for several reasons: there is a high
degree of economic integration between the two countries; American
policy choices have historically had a strong influence in Canada;
and there are both state and provincial governments that face escalating fiscal pressures.
Legislative initiatives in several American midwest states, most
notably Wisconsin, signal a potential shift in labour relations policy
away from support for unionism and collective bargaining — a shift
that may eventually lead to significant declines in public-sector
unionization in some states. Early in 2011, a statute was introduced
in the Wisconsin legislature which severely restricted the collective
bargaining rights of state and municipal employees. In the legislature’s words, the statute “limits the right to collectively bargain for
all employees who are not public safety employees (general employees) to the subject of base wages,” and further confines that right “to
bargaining over a percentage of total base wages increase that is no
greater than the percentage change in the consumer price index.”52
In Ohio an even more restrictive bill was introduced, to the following effect: “public employees” were prohibited from striking, and
if they did strike, their employer had to deduct two days’ pay for each
working day lost; union decertification was made easier; the subject
matter of collective bargaining was restricted; the parties could no
longer agree on a dispute resolution procedure; and the scope of
employee and union unfair labour practices was expanded and made
subject to more severe penalties.53
52 State of Wisconsin, Assembly Bill 11, 2011-2012 Legislature, January 2011
Special Session, LRB−1426/1, at 1.
53 JA Rishel et al, Ohio Legislative Service Commission: Final Analysis (updated,
corrected version) (the Public Employees’ Collective Bargaining Law), Am.
Sub. S.B. 5, 129th General Assembly.
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Although the Ohio legislation was ultimately rejected in a statewide referendum, these developments illustrate the increasingly divisive and acrimonious level of debate over labour relations policies in
the U.S.54 Those policies play a critical role in determining unionization rates in the U.S., and it will be important to see how much the
Canadian discourse is influenced by American developments.55
6.
LABOUR RELATIONS POLICY OPTIONS
AFTER FRASER
In light of the developments canvassed in the preceding section,
progressive labour relations policy needs to be assessed against two
key objectives. First, it needs to ensure basic rights, such as those
embodied in the Charter or set out in international agreements. This
is a necessary but not a sufficient condition for a labour relations policy if it is to be successful in the sense of advancing the social and
economic well-being of Canadian workers. Second, labour relations
policy must be judged by its capacity to facilitate measurable positive outcomes in improving standards of living, furthering upward
economic mobility, and keeping economic inequality within socially
acceptable limits.
The established model of Canadian labour relations policy, centred on trade unions, did support those objectives. But the decline of
unions and the rise of globalization have compromised the viability
of this model. With the Fraser decision, policy-makers have a clear
signal that policy choices regarding employee representation and
workplace rights remain in their domain, subject to the basic principles laid out in the Charter. What, then, are some of the broad policy
alternatives available to Canadian governments?
54 J Siegal & J Vardon, “Unions Get Revenge as Issue 1 Fails,” The Columbus
Dispatch, 9 November 2011. Accessed 11 November 2011 at <http://
www.dispatch.com/content/stories/local/2011/11/08/1-issue-2-election.html>.
55 For a Canadian commentary that draws directly on the American debates, see N
Reynolds, “We don’t have to surrender to public-sector unions,” The Globe and
Mail, 24 October 2011. Accessed 28 November 2011 at <http://www.the
globeandmail.com/news/opinions/opinion/we-dont-have-to-surrender-to-publicsector-unions/article2209954/>.
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One alternative is for governments to strengthen conventional
unionism, with a view both to assuring basic rights and facilitating
positive economic outcomes. It is unlikely that this alternative will
be adopted. In fact, there is mounting evidence of a move in the
opposite direction, with a progressive weakening of the labour relations policy framework in a number of key jurisdictions.56 In the
broader public sector, where unionization rates are highest, Canadian
governments have been treating greater proportions of public-sector
employees as essential, enacting back-to-work legislation, and
imposing settlement terms. This tendency, which significantly
restricts the effectiveness of collective action by public-sector workers,57 has manifested itself at both the federal and provincial levels.
For example, in June 2011 the federal government imposed back-towork legislation on postal employees, and also imposed settlement
terms.58 Another example is provided by the Toronto Transit
Commission Labour Disputes Resolution Act, 2011,59 enacted by the
Ontario government on March 30, 2011. That Act prohibited work
stoppages in the Toronto public transit system, on the grounds (in the
words of the statute’s preamble) that “[w]ork stoppages involving
these parties and the resulting disruption of transit services give rise
to serious public health and safety, environmental, and economic
56 Godard makes this point generally for Canada. See J Godard, “Labour Unions,
Workplace Rights and Canadian Public Policy” (2003) 24:4 Can Pub Pol’y 449.
57 For reviews of the evolution of government restraints in various segments of the
Canadian public sector, see R Chaykowski, “Prospects for the National Joint
Council in the Renewal of Labour-Management Relations in the Canadian
Federal Public Service” (2002) 9:3 CLELJ 387; G Swimmer, “Collective
Bargaining in the Federal Public Service of Canada: The Last Twenty Years” in
Swimmer & Thompson, supra note 43 at 368; L Panitch & D Swartz, “From
Free Collective Bargaining to Permanent Exceptionalism: The Economic Crisis
and the Transformation of Industrial Relations in Canada” in Thompson &
Swimmer, supra note 11 at 407; and Advisory Committee on Labour
Management Relations in the Federal Public Service, supra note 10 at 22-25.
58 Restoring Mail Delivery for Canadians Act, SC 2011, c 17. This statute is the subject of a constitutional challenge. See M Fitzpatrick, “Postal union mounts legal
battle with Ottawa: Back-to-work legislation violates Charter rights, union says,”
CBC News (12 October 2011). Accessed 28 November 2011 at <http://
www.cbc.ca/news/politics/story/2011/10/12/pol-cupw-legal-challenge.html>.
59 Toronto Transit Commission Labour Disputes Resolution Act, 2011, SO 2011, c
2 (Bill 150).
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concerns.” This explicit addition of an economic justification for
back-to-work legislation goes beyond the usual, widely accepted criteria of concern for public health and safety and for personal wellbeing. The statute provided for the binding arbitration of interest
disputes, and stipulated that “the employer’s ability to pay in light of
its fiscal situation” and “the economic situation in Ontario and the
City of Toronto” were among the factors that the arbitrator was to
take into account in setting new collective agreement terms.60
Aside from Wagner-model trade unions, there are various other
forms of collective organization that can provide employees with some
degree of security and collective activity, including professional and
staff organizations.61 Formal public policies could substantially
encourage their development and their capabilities as effective
employee associations. This could be one element of a renewed labour
policy aimed at expanding the scope of employee representation.
Criticism of such alternatives to the Wagner model posits that they
are substandard and ineffective because they fail to provide as robust a
set of workplace rights and economic advantages as the Wagner model,
and that, by extension, they can undermine the labour movement.62 This
failure on the part of the Agricultural Employees Protection Act to match
the standard of employee protection set by general Canadian labour relations statutes was a key rationale for the challenge to that Act in the
Fraser case, and for a similar challenge to legislation denying unionization rights to members of the Royal Canadian Mounted Police.63
60 Ibid, s 10(2).
61 See Taras, supra note 41; and Kaufman & Taras, supra note 26.
62 Kaufman & Taras, supra note 26 at 10, review the main criticisms of non-union
employee representation (NER):
Trade unionists and other critics of NER stoutly reject that on balance there
are any net benefits and criticize any purported advantages as wishful thinking or employer propaganda . . . . NER also has adverse social and economic
effects, say the critics. For example, because non-union representational
groups are limited to individual plants or companies, they cannot stabilize or
standardize wages and labor conditions across firms in a particular product
market, maintain aggregate purchasing power by making sure that wages
grow in line with increased profits, or offset the power of business interests
in the legislative and regulatory process.
63 Mounted Police Ass’n of Ontario v Canada (AG) (2009), 96 OR (3d) 20 (Sup Ct);
reversed 2012 ONCA 363.
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The overarching labour relations policy problem lies in the fact
that in Canada we have no coherent government policies that are aimed
at enhancing employee rights and outcomes, beyond the baseline of
conventional unionism and collective bargaining rooted in the Wagner
model. Seldom have Canadian governments sought to establish or promote alternative, innovative models to Wagner-based unionism.64 The
policy predicament is that unionism is in decline, and is expected to
continue to decline. This creates a vacuum in the area of employee representation, and a power imbalance in the employment relationship.
The Fraser decision provides governments, regardless of their
political preferences vis-à-vis unions and collective bargaining, with
some assurance that they have the ability to craft their own brand of
policy, as they did with PC 1003 and its progeny in the 1940s.
However, even as the Wagner model erodes, Canadian governments
have demonstrated little initiative in either replacing it or augmenting
it with any meaningful alternative.65 Government policy typically
incorporates political objectives, and some governments which as a
matter of principle do not support unions and collective bargaining
may see Fraser as a licence to continue to erode the Wagner model
without replacing it with anything more effective.
Fraser affirms that labour relations policy may deviate from the
Wagner model and explore new variations, or perhaps even quite new
models. Whether governments actively take that route or remain content
to oversee the current combination of weakening traditional unionism
and incremental strengthening of non-union human resource management models, Canadian trade unions stand to be profoundly affected.
64 Other models, although rare, do exist in Canada. An example is the federal
National Joint Council of the Public Service of Canada (NJC), which was
imported from Britain in the early 1900s. The NJC brings federal government
employers and their unions to a joint consultative table that determines many
terms and conditions of employment. Before there was Wagner-model unionization in the federal public service, the NJC brought together employee associations and the federal government as employer. See R Chaykowski, “The
National Joint Council and the Development and Future of Labour-Management
Consultation in the Canadian Federal Public Service” (2002) 5:3 Workplace
Gazette 71; and R Chaykowski “Advancing Labour-Management Relations
through Consultation: The Role of the National Joint Council of the Public
Service of Canada” in Kaufman & Taras, supra note 26 at 328.
65 See R Chaykowski, “Industrial Relations Policy: Active or Reactive?” (1995)
16:8 Policy Options 24.