Collective Bargaining

Preparing for negotiations

Reviewing existing collective agreement language

Before you renegotiate your existing collective agreement, you need to identify the weaknesses in your existing agreement.  This usually requires:

Ensuring your agreement is consistent with the current labour legislation, particularly if there have been any changes in the law since the last negotiation.

Reviewing all the grievances that have been filed over the term of this contract.  Determine what is not working, and whether the problem is with the contract language.

Performing a general review of all contract language.  Are there any weaknesses in the contract language that have not yet caused any problems, but might in the future?

Reviewing language and compliance with legislation can be complicated.  We can assist you with that review.

Reviewing your relationship with the union

A hostile relationship with your union will require you to invest time and resources fighting with the union, when those resources would be better spent somewhere else.   While you don’t need to love the union, you do need to work with them.  If the relationship is toxic, you need to figure out why.  Here are a few signs:

Is the union rep constantly at your workplace meeting with the employees?

Do you have a large number of grievances over the course of the year?

Does the union seem to grieve everything, regardless of the merits of the complaint?

Does the union take cases to arbitration that they have no chance of winning?

Whether you win or lose, the cost of processing grievances and particularly of going to arbitration, can be significant.  Getting assistance to improve and properly manage your relationship with the union will pay dividends. 

Compiling and analyzing competitors' settlements in your industry

Particular unions often focus on a particular industry, which means you may be certified to the same union as your competitors.   The union will use this to try to convince you that there is an “industry standard” in terms of contract language, wages and benefits that you must meet.  

You need to go into negotiations properly prepared.  This means properly analyzing your collective agreement against your competitors.  This can be difficult, since wage progressions and benefit terms often vary considerably, and are hard to compare straight across the board.   Your workplace may be significantly different than your competitor’s, so the language of your collective agreement must be tailored to your actual workplace requirements, and not to some “industry standard” claimed by the union.

If your experience with collective agreements is limited to your own contract, you may benefit from advice from someone who has negotiated and analyzed a wide range of collective agreements.

Compiling and analyzing broader industry trends

While local settlement trends in your industry will have a far greater impact on your negotiations than broad economic trends, you still need to consider those trends.  If your contract contains cost of living wage increases, those statistics will affect your bottom line.

Economic projections will also affect the length of the agreement you can expect from the union.  While from the employer’s perspective it might seem easier to negotiate when the economy is weak, the union will try to hold you to a short term agreement if economic indicators suggest things will pick up in the next year or two. 

While you will be able to find this economic information from government and industry sources, determining how to use it in bargaining may require you to get further advice and guidance.

Determining your bargaining position and strategy

Determining and drafting proposed language changes

Once you have determined what language changes are required in your collective agreement, you will need to come up with draft language to provide to the union during negotiations.  Properly drafting your proposed language is critical.  There is decades of case law dealing with contract language interpretation, and if you don’t fully understand the legal effect of the contract language you are proposing, you may be in for a surprise when the union interprets the language differently than you do.

The language in the collective agreement forms a legally binding contract between the parties.  If there is a dispute as to what it means, that language may ultimately be interpreted by an arbitrator.   The language must not be vague, and must not lend itself to more than one interpretation.  You may benefit from having your proposed language changes drafted or at least reviewed by legal counsel.

Costing out and determining your monetary position

Bargaining issues are usually divided into two categories – “monetary” and “non-monetary”.   Non-monetary issues are typically language issues that may affect how you operate your business, but do not have a direct dollar value associated with them.   Monetary issues are money issues, like wages and benefits.  Typically the parties negotiate the non-monetary issues first, then move on to monetary issues.

Beware of issues that don’t look like clear monetary issues, but have a direct hidden cost.   For example, the requirement to assign overtime by seniority may mean that the most expensive employees in the plant are the ones working most of the overtime.  This has a direct cost.

Once you are in negotiations, you will need the ability to cost out the union’s proposals as you receive them.  Creating a spreadsheet ahead of time with current employee costs that can be revised as proposals are received is usually a good way of preparing for negotiations.  Your CFO or accountant is probably in the best position to produce this for you.  Your chief negotiator or lawyer should review this in advance to ensure that all the relevant data is included in the spreadsheet.

Anticipating the union's proposals

If you can anticipate the union’s proposals before bargaining starts, you will be better prepared to respond to those demands.  There are a few sources to consider when trying to determine in advance of negotiations what the union’s proposals might be:

Grievances – if the union has filed grievances about certain issues, and did not succeed in those grievances, the subject of those grievances will likely become a bargaining issue.  If the current language does not get the union what it wants, the union’s solution will be to change the language.

Revisiting old demands – last round of negotiations the union probably made demands that you did not agree to.  How long it took you to get those demands off the table is a good indication of how important those issues were to the employees and the union.   If the issue was important to the union and its membership, it will be back during the next round of negotiations.

Shop floor discussions and complaints – shortly before negotiations commence, the union will often distribute a questionnaire to the employees asking them what they would like to see in a new collective agreement.  This generates discussion among the employees.  If there is something your employees think they are entitled to and not getting, they are often quite vocal about it, even directly to their supervisors.  Your front line supervisors should be listening to any complaints that the employees have about their wages and benefits, and how the business is being run.  These may well become bargaining issues.

You may benefit from advice on how best to anticipate and respond to the union’s demands.  Your bargaining position will be stronger if you can take the time to craft a response in advance of the negotiations, rather than doing it “on the fly” during bargaining.

Planning for a strike or lockout

Most negotiations do not end in a strike or lockout, but you need to be prepared in the event negotiations break down.  Contingency measures should be in place in the event that you can’t reach a deal.  

Can your operations continue during a strike?  

Can you move production to a different jurisdiction?  

How long can you weather a strike before it does permanent damage to your business?  

Is now a better time for a strike than later?  

All these issues must be considered.

A strike will involve picketing and business interruption, and will often result in applications before the Labour Relations Board.  You will need legal advice should this occur.

Conducting the negotiations

Should you conduct your own negotiations?

There are 3 ways of conducting your negotiations:

You can do it yourself;

You can conduct your own negotiations, while getting “behind the scenes” legal advice; or

You can hire an experienced negotiator to conduct the negotiations for you. 

Whether you should be handling your own negotiations will depend upon whether you have the necessary skill and experience.

Do you understand the negotiating process?

Are you comfortable negotiating with the union and your employees?

Would it be useful to have an “outsider” at the table representing you if the negotiations become heated?

Do you understand the implications of the language you are agreeing to?

Do you have the ability to properly draft your own proposals?

Are you familiar with the available LRB mediation process in the event negotiations break down?

The union will be represented by a professional negotiator, who will have regular contact with the union’s in-house legal counsel.   If you do not have the necessary expertise and access to at least some legal advice, you will be at a distinct disadvantage.

Should you hire a negotiator?

When going into contract negotiations, every employer will have to determine whether they have the ability to negotiate on their own, or if they will be better served by using a professional.   There are a number of advantages to using a professional negotiator, because ideally an employer needs to:

Match the union’s expertise – The Union will be using a professional union negotiator who has considerable experience in negotiating collective agreements.  While the union negotiator will rarely be a lawyer, he or she will likely have unlimited access to legal advice through the union’s in house or outside counsel.

Know the law – an Employer’s bargaining obligations are subject to legislation, arbitral precedents and common practice.  The Employer needs solid knowledge of bargaining law and process.

Understand the contract – The Employer needs to understand not only the contract language being proposed, but how that language will be implemented and interpreted.

Understand the process – In many jurisdictions, the Employer must be prepared for the imposition of a first collective agreement by the relevant Labour Board.  Throughout the negotiating process, the Employer must also lay the groundwork for the use mediation, final offer vote, or other tools made available under labour legislation.

Avoid future costs – Bad collective agreements have long term costs.  Obvious negative results include the Employer losing flexibility in managing their business, the Union exercising significant control over production, the Employer being subject to constant challenges to management authority, and the Employer having to constantly respond to union grievances.  This will ultimately lead to production delays, increased legal costs, and the Employer ultimately losing its competitive advantage.

Have a backup plan – The Employer needs to develop both a strike contingency plan and a lockout strategy.  While the goal of negotiations is to avoid this outcome, to exercise any leverage at the bargaining table, the Employer needs to be ready for both, and the Union needs to know that the Employer is prepared.

Should you use a lawyer as your negotiator?

The union will be represented by a professional negotiator at the bargaining table.  During negotiations, that union negotiator will regularly consult with the union’s in-house legal counsel.  If you do not have the same access to expertise and legal advice, you will be at a disadvantage.

Employers will often have to decide between hiring a lawyer or hiring a consultant to represent them in collective bargaining.   Some consultants are quite skilled and experienced negotiators, but they are not lawyers.

Only a lawyer can provide you with legal advice.  While timely legal advice may be less critical in simple negotiations where no problems arise, it may be naive to expect that your negotiations are going to proceed in that manner.

Lawyers have legal training that consultants do not have.  An experienced labour lawyer will be able to draft language from scratch (rather than just cutting and pasting language from old contracts), and can advise you about its effect and enforceability based upon legal precedent.  If negotiations break down and you end up before the Labour Relations Board or in a strike position, you will likely need to get a lawyer involved anyway.

When an Employer requires and seeks advice from a lawyer midway through the bargaining process, that lawyer will have to become familiar with the state of the negotiation before offering useful advice.  While details about the negotiations can be provided, the lawyer will be providing strategic advice without the benefit of understanding the bargaining dynamic, and without first-hand experience of the negotiations themselves. 

If you if you hire a non-lawyer to negotiate on your behalf, but then every time a significant issue arises you need to “run it by legal counsel” to ensure you are properly protected, you will be unnecessarily driving up your costs.  You can avoid this duplication of work (and can avoid paying two professionals instead of just one) if your lawyer handles the negotiations from the beginning.

Consultants are often perceived to be less expensive than lawyers, but that is not always the case.   When we handle contract negotiations on behalf of a client, we generally do the work at a discount to our regular hourly rates for legal services.  We want to represent your company in its next contract negotiations.  We would be happy to work out a budget with you to ensure that your next negotiations are cost effective. 

Dealing with Labour Board involvement in the bargaining process

Mediation before the LRB

During the negotiating process, either the union or employer can apply to the Labour Relations Board to appoint a mediator to assist with the bargaining process.   The Minister of Labour can also unilaterally appoint a mediator if he or she feels that a mediator could assist the parties to reach a collective agreement.  The union can not commence a strike while the mediator is engaged in the process.  If a mediator is appointed under the Labour Code, the parties are required to participate in the process (whether they want to  or not).

If it looks like the union and employer are not going to reach an agreement on their own, a key element of your bargaining strategy will be to determine whether to ask for a mediator to be appointed, whether to wait to see if the union makes the request, and when to make the request.  If you think the parties will end up using a mediator, it will have a significant effect on your bargaining strategy, particularly in the final negotiating sessions leading up to the mediation.

You may be well served at a mediation by being represented by a negotiator who has experience in the process and already knows the mediators.

Other applications before the LRB

While most negotiations are resolved by the parties without Board involvement, when negotiations run into difficulties, it is not uncommon for the parties to end up before the Labour Relations Board.

Common applications before the Board are: bargaining in bad faith complaints and unfair labour practice complaints.  Both can often raise complex legal issues and will require written submissions to the Board or a hearing before the Board.  It is important that you are properly represented in this process, since the Board has broad powers to impose remedies upon the parties, and a decision from the Board will often determine the outcome of your negotiations.

Other applications that regularly occur during bargaining are final offer vote applications and applications for the Board to impose a first collective agreement on the parties.   Either of these applications will often determine the outcome of the collective bargaining process, so it is important that you properly initiate or respond to these applications.