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Rand Formula Required by Charter!

The Alberta Labour Relations Board issued an interesting Charter decision recently, ruling that the absence of the Rand Formula from the Alberta labour relations code was a violation of freedom of association in Section 2(d).  It involves Old Dutch Foods and the UFCW.  Here is the decision.  The Board gave the government 1 year to introduce some form of Rand Formula.  Of course, a review of the decision may be well underway by then.

The Rand Formula describes a statutory provision introduced decades ago in most provinces that provides that, where a union so requests, the collective agreement must include a clause requiring the employer to deduct union dues from all employees in a bargaining unit (employees covered by a collective agreement) and remit the money to the union.  In Ontario, it appears in Section 47.   It was the solution proposed by Justice Ivan Rand to end a bitter strike at Ford in Windsor back in the 1940s.

Alberta, and some of the maritime provinces (N.B., N.S., and PEI), have not included a mandatory union dues provision like the other provinces.  The Alberta Board decision notes that the Rand Fomula was part of a package of reforms that comprise the core of our labour law model in Canada, which includes majority representation (unions are elected by a majority of employees), exclusive representation (once the union is seletected, it becomes the representative of all employees in the bargaining unit), and a duty of fair representation (the union has a legal obligation to represent all bargaining unit employees, even those who are not union members–i.e. haven’t signed a union card).  The justification for a Rand Fomula is that all employees benefit from the union’s services, and the union is legally mandated to represent all employees, and therefore it is only fair that all employees should have to contribute their share to the costs of the union performing these services.  Plus,  a Rand Formula puts an end to strikes for union security, a common event in Canada labour history.

Alberta’s government felt fine about imposing the duty to represent all workers on unions, but not the reciprical duty on employees to pay their share of the costs of that representation.  In my opinion, the obvious reason is that the Alberta government does not actually want to empower unions by securing them a stable source of financing.  However, the government explains its position as protecting the free ‘choice’ of workers (to free ride on the services paid by others, I presume).  Interestingly, the government did not argue that the violation of Section 2(d) was justified under Section 1.

The Labour Board ruled that not including a provision that requires all bargaining unit employees to pay union dues is unconstitutional because it substantially impedes the ability of workers to join together and engage in meaningful collective bargaining.

  In the case before us, as already mentioned, we accept the Union’s claim that the Code is underinclusive because it fails to provide adequate statutory protection to enable it and its members to engage in meaningful collective bargaining, the effect of which is to substantially interfere with the fundamental freedom of association.  

I consider a similar argument in my new paper (coming out in the next volume of the Canadian Labour & Employment Law Journal) about whether Section 2(d) now requires governments to legislate union access to workplaces for the purposes of union organizing.  My point was that ILO Convention 87 requires this, and the Supreme Court ruled in Health Services that Section 2(d) of the Charter must provide at least as much protection as Convention 87.  However, I conclude ultimately that union access would not be required by Section 2(d) because unions would be unable to show that not having access ‘substantially interferes’ with collective bargaining or the right to organize.

In the Alberta case, the Board relied on the lower union density in non Rand formula provinces, and the fact the UFCW has been unable to bargain a mandatory dues check-off in its long time relationship with Old Dutch,  to justify its conclusion that the absence of a Rand Formula provision ‘substantially interferes’ with the exercise of Section 2(d) rights.

And so, the ongoing modernization of Section 2(d) continues …


5 Responses to Rand Formula Required by Charter!

  1. Peter Cameron Reply

    December 12, 2009 at 4:46 pm

    Assuming this decision is appealed, and survives the appeal, this is more evidence (see also ‘Fraser’) for Brian Langille’s theory that ‘Health Services’ puts us inexorably en route to a complete and detailed judicial labour code.

  2. Halla Reply

    January 4, 2010 at 8:14 pm

    Rand Formula aside, the exchange of exclusive bargaining rights for the duty of fair representation only works if members are in fact fairly represented. Since union members are barred from the courts through Weber, it is questionable whether labour boards adjudicate these fair representation complaints fairly. The legal tests to prove a violation border on the absurd.

    If you follow Labour related charter challenges, there is an interesting case to be heard in BC Supreme Court in March which claims that S13 of the code violates S7 of the Charter. S13 allows the board to dismiss fair representation complaints without an oral hearing or written submissions. The evidence before the court includes the fact that the board has dismissed every single DFR complaint dealing with loss of employment since 2005 ( approx. 65 cases) and without a single oral hearing.

  3. Blaine Reply

    April 18, 2010 at 11:06 am

    The above commentator, Halla, seems appalled that DFR’s might be dismissed without an oral hearing. The Duty of Fair Representation is a duty not to act in a manner which is arbitrary, discriminatory or in bad faith. There is also a similar “duty of fair referral” which would seek to require unions to arbitrate cases (especially involving critical job interests) where there is a reasonable chance of success and where the settlement process is unacceptable.

    There is nothing “absurd” about these legal standards. The vast majority of employees thank their lucky stars that they are in a union when the employer decides to discriminate against them or fire them for unjust reasons. The union bares the full costs of such litigation which in civil courts can range from tens to hundreds of thousands of dollars. Needless to say, the union has a responsibility not to spend its members’ money on frivolous cases. The 65 cases mentioned above were generally frivolous (as that is generally the standard for denying an oral hearing).

    The denial of the Rand formula in Alberta and some maritime provinces, is clearly an attempt to replicate the phenomenon in the US where there are “right to work” states. This misnomer is really a euphemism for the right to union bust. The union has all the obligation to represent employees whether the employee pays dues or not. I have never seen an organization succeed on providing expensive services for free. I think the Alberta Labour Relations Board hit the nail squarely on the head.

  4. Brian Dell Reply

    November 2, 2010 at 12:20 am

    Part of the “deal” behind a Rand formula is no closed shops. If union dues are going to be written in as mandatory even when they are being spent on political lobbying, then s. 29 of the Alberta code green-lighting the making of union membership a condition of employment should be struck as well (like it has been struck throughout the 47 countries that are party to the European Convention on Human Rights).

  5. Jason R Reply

    November 9, 2011 at 1:21 pm

    @Brian Dell Rand also said while no closed shops, people that opt out of union membership still have to pay dues (i.e. no “free-riders”), so your point is moot.

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