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A Letter from Canada to Volkswagen: Our Labor Laws Are a Better Fit for You

Update:  The powerful head of the German Volkswagen union has said he will urge VW not to invest any more in antiunion, southern US Right to Work states where politicians and special interests threaten workers who try to unionize.  This is another reason for VW to move its plants to Canada, assuming that Canada’s own Republican style antiunion politicians like Tim Hudak and Stephen Harper can be silenced.

A letter from a Canadian labour law professor to Volkswagen:

Dear Volkswagen:

I’ve been following with interest the crazy story about the workers at your factory in Tennessee.  They are voting this week on whether to support the United Auto Workers as their representative.  Although you have taken the high road and agreed to let your employees make this decision without making threats, your employees have nevertheless be

American Special Interests Campaigning Against VW Workers Efforts to Join UAW

American Special Interests Campaigning Against VW Workers Efforts to Join UAW

subjected to threats, lies, and innuendo from Republican politicians and the many anti-union special interests groups funded by wealthy American aristocrats. These groups are insane with anger at your “unAmerican” response to a unionization campaign.  Not one firing, not even a threat to fire everyone if they for the union!  Very unAmerican indeed.

I was amazed at that nutty Republican Senator for Tennessee who has sought to play the role of the typical American corporation, by telling anyone who will listen that VW will pull future investments in the state if the workers support the UAW.  The fact that you claim that is nonsense hasn’t deterred him.  He’s also threatened that the state will stop its subsidies to VW if the workers exercise what you and I thought was their legally protected right to unionize.  As a German, this must seem almost cartoonish to you.

You’d think that the gibberish being spewed by the wealthy class in the South would be somewhat more muted given that Tennessee is one of the poor sister ‘right to work’ states. None of the workers affected can be made to join the union or even pay union dues at your factory, even if the UAW wins the vote.  But that’s not enough to satisfy the antiunion forces down there.  Their actions have made clear that they don’t actually believe that workers should be able to choose collective voice.  It’s unimaginable to them that any worker would so choose. I confess that it was disappointing that a company like VW would set up in a place like Tennessee in the first place.  But that’s the past.  Let’s talk about the future.

Why Volkswagen Should Come to Canada

You and I know that works council in Germany have worked wonderfully, and helped sustain high wage German manufacturing through the recession.   In Europe, you give information to the worker councils, engage in productive dialogue and consultation over a whole range of important business decisions.  You know that workers actually are pretty smart and have ideas about how to improve productivity and efficiency, and that talking to them through an institutional collective mechanism makes good business sense. So it makes perfect sense to me that you would want to implement a comparable system of collective voice in North America.

But here I have to tell you that you chose the wrong country in which to establish your North American factory.  You should be in Canada, where our laws are far more conducive to what you have in mind.  Let me explain, since the North American model is so foreign to the rest of the world.

While the German model is based on the sensible assumption that workers should have a collective voice in matters that affect them at the workplace, this idea is heresy in the US model.  Certainly, Republicans (and their starry-eyed Canadian devotees like Ontario Conservative Party leader Tim Hudak–more on him below) reject the idea whole-heartedly.  In Canada and the US, there are only two ways that workers can acquire a collective voice in the workplace:

(1)  by organizing into a majority trade union that wins legal recognition rights (through certification or voluntary recognition) under labor relations legislation and thereby the right to engage in formal collective bargaining, or (2) if the employer voluntarily establishes some form of worker collective association and agrees to consult or bargain with it.

However, there are important differences in how American and Canadian labor laws deal with these two scenarios.

Firstly, the process through which a union becomes certified to represent workers in the two countries is different.  The “Canadian model” tends to be less drawn out and therefore less hostile than the American model.  In some Canadian jurisdictions (i.e. Federal, Quebec, Newfoundland & Labrador, Manitoba, and the Ontario construction sector), workers can prove majority support by  collecting union membership cards on behalf of some majority of workers.  In others (most of the rest), a vote is required, but that vote occurs fairly quickly.  In Saskatchewan, a right-wing government recently introduced a vote model more in line with the American system that does not require a quick vote.

The American model permits employers to stall and delay for months and months before a vote is held, and we know empirically that delay works against workers who want a union.  Sadly, studies show that American employers regularly engage in illegal threats and dismissals to discourage workers from supporting collective voice. Canadian laws tend to have stronger punishments for illegal threats by employers, including the right to certify a union as a remedy.

So, if your factory was in Ontario, for example, the campaign and certification vote could all take place in a matter of days rather than months.  The Republicans and interest groups who’ve been calling you all sorts of names in Tennessee for not actively campaigning and threatening your own employees would have far less opportunity to distribute their propaganda here.  That would be good, right?

Secondly, in the US, it is illegal for an employer to create an employee association or works council. Period.  You know this, and that’s why you are open to the idea of the UAW winning certification in Tennessee.  You need the union to win so that you can bargain the creation of a works council.  This makes perfect sense within the legal model you find yourself governed by in the USA.  But–and this is very important–in Canada, you could just create a works council if you like, even if your workers aren’t unionized.  Did you know that?

That’s right.  Section 8(a)(2) of the American National Labor Relations Act prohibits an employer from “dominating or interfering with the formation or administration of a labor organization“.  Although the original purpose of this section was to prohibit  sham ‘company unions’, it has been interpreted broadly to prohibit any sort of nonunion employee association or employee council developed with the employer’s consent and assistance.  American labor law scholars have long argued that this law should be relaxed in order to permit experiments with various forms of employee representation outside of formal, traditional collective bargaining.  Yet the restriction remains.  This throws up a road block for your desire to have a works council, and has embroiled you in this ridiculous mess in Tennessee.

But you could have avoided all of this fuss by simply putting your factory in Canada.  In my home province of Ontario, we have loads of skilled autoworkers who’d love to work for VW!  And there is no legal obstacle to you creating the works council you want, either. In Canada, there is nothing unlawful per se about a company creating an employee association or a works council on its own.  In fact, many companies have created nonunion employee associations in various forms.  True, this is often done as an HRM tactic to discourage workers from joining a ‘real’ union. However, that is not illegal in Canada, unless you create the council specifically as a tactic to defeat an organizing campaign that has already begun.  Your non-union works council also couldn’t bar a real union from trying to organize your workers, but that is true in Germany too, so this shouldn’t be a problem for you.

Nor is their any law here prohibiting you from voluntarily recognizing a real union and bargaining a works council with it.  I’m sure our main auto union, Unifor, would be open to that prospect.  In fact, it already bargained a similar type arrangement with Magna a few years ago. 

So, you see what I mean?  Canada’s labour law model is far more conducive to your ambitions of installing German style works councils than the American model.  You could just set up a factory here and install your works council, or work with one of our unions to achieve the goals you are trying to achieve in Tennessee, but with far less hassle, conflict, and controvesy. We have lots of skilled auto workers, a great infrastructure, a publicly funded health system, low taxes, and a falling dollar, which saves you lots of money.  It’s  colder here, for sure, but heck, you’re from Germany, and anyways, they have snow in Tennessee today!  I’m sure you won’t miss NASCAR.

[I should warn you, though, that we do have our own version of the crazy Republicans here in

One Ontarian Likes the Nastiness in US Labor Relatons

One Ontarian Likes the Nastiness in US Labor Relatons

Ontario, who think workers should not have collective voice in the workplace.  They are called the “Progressive Conservatives” (I know, ‘progressive’, funny huh?), and they are led by a guy named Tim Hudak who thinks that the nasty, divisive, oppressive American system of labor relations is to die for.  He may not even want you here if you don’t hate unions and collective worker voice.  But he is a very unpopular opposition leader who has a history of imploding during election campaigns, so I wouldn’t worry about him. Last night, his party got smoked in a by-election in his own neighbourhood by a NDP candidate who is a former union leader!]

 

Anyways, I hope I have been able to persuade you that you’d be better off in Canada.  Give our politicians a call, and I’m sure they will offer you all sorts of incentives and benefits to come here. Indeed, as you know, our governments have already been trying to lure you to Canada–but I bet a Conservative politician wouldn’t tell you that our labour laws are far superior for your interests than Tennessee’s.  So I thought I’d add that point. And then, please try your experiment with a Canadian version of a German works council.  Us academics would fully support you in that initiative.

Cheers, from Toronto,

Dr. David Doorey, Professor of Canadian Labour Law

 

 

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11 Responses to A Letter from Canada to Volkswagen: Our Labor Laws Are a Better Fit for You

  1. Dan McGarry Reply

    February 14, 2014 at 8:38 pm

    David, seeing you sharing sentiments with Industry Minister Christian Paradis who met with senior VW executives in January must be quite a shock to some.

    Not sure if you remember the history of VW’s previous manufacturing facility in Canada (Barrie, Ontario).

    And if the Conservatives win the next Ontario election, then Ontario may join Tennessee in enacting ‘right to work’ legislation.

    • Doorey Reply

      February 14, 2014 at 9:09 pm

      Thanks Dan, I didn’t mention the recent attempts to try an lure VW to Canada, but I should probably link to something on that. I’m sure Paradis wasn’t argue that our labour laws are a benefit over Tennessee’s!

  2. John Reply

    February 20, 2014 at 5:50 am

    As astonishing as Senator Corker’s comments are, I have to say they’re also very interesting from a labor law point of view. It’s quite rare to have a complete outsider so overtly campaign for a “no” vote, without support from the employer, and even at odds with the employer’s own statements. Combine that with the fact that the statements are being made by a U.S. Senator, someone with apparent power to make good on his threats (very much unlike the typical third party) and you have the very interesting legal question of what impact those statements have on the legality of the vote. It would be even more interesting if Senator Corker had made all those statements from the floor of the Senate, so we could add a Speech and Debate clause issue into the mix.

  3. Fernando Reis Reply

    February 22, 2014 at 2:03 am

    Of course the Senator’s comments do not amount to an unfair labour practice complaint but it seems to have had the same chilling effect as if the statements were uttered by the employer. The more and more I witness the decline and ineffectiveness of the trade union movement in the US (Canada not far behind) the more I am convinced that we need a new approach. We can either allow foreign involvment (as the German unions have hinted at) in labour relations or the whole Wagner system should be dismantled and we start from scratch. Perhaps we need to go back to the pre-industrial peace model for the 1% to understand that you can’t keep workers down. If this means labour strife, so be it. Inequality is increasing and the system is broken. Also, if globalization applies to industry then why shouldn’t labour relations? Perhaps German worker councils are a better model.

    • Doorey Reply

      February 22, 2014 at 2:17 pm

      Fernando, why do you say its obvious that the Senator’s comments aren’t an unfair labor practice? Most labor law experts in the US who’ve commented on it say that the comments probably are a violation, and now the UAW has filed a complaint. The story is not over.

  4. Fernando Reis Reply

    February 23, 2014 at 1:50 am

    Professor Doorey, I say that (and I hope I am wrong) because the comments did not come from the employer. I would like to take a closer look at the NLRA. Is there any caselaw where the Board has found non-employer activities as amounting to an unfair labour practice? And, if so, what remedies has the Board ordered? Thanks for your comments. I am very curious to see how this develops. Regards.

    • Doorey Reply

      February 23, 2014 at 3:13 pm

      Fernando, here’s a description of the legal options available to the UAW: http://inthesetimes.com/working/entry/16306/uaw_legal_options_volkswagen_defeat
      The UAW has now filed an unfair labor practice complaint, asking for a new vote. In Ontario, Section 76 applies to “any person”, no just an employer, so here threats by a politician or special interest group could be caught by that section.

      • Rob Logue Reply

        February 24, 2014 at 8:11 pm

        The BC Board has applied section 9 of their Code to seemingly disinterested third parties. In Re Nolin, BCLRB No. 123/2006 the BC Board’s found the threat of store closure by a third party who employees could reasonably suppose had some insider knowledge amounted to coercion. Just my two cents… IS, Rob

  5. Dan McGarry Reply

    July 10, 2014 at 3:54 pm

    Just notice this announcement on the Truth About Cars website. Seems like VW’s management is serious about supporting the UAW.

    UAW To Form Union Local For Volkswagen Chattanooga Workers
    By Derek Kreindler on July 10, 2014/The Truth About Cars

    The UAW will apparently form a new local in Chattanooga, Tennessee to represent workers at Volkswagen’s assembly plant. But things will operate a little differently than in traditional union representation setups.

    According to The Tennessean, Participation will be voluntary, and there will be no formal recognition of the union by the German automaker until a majority of its workers have joined, UAW officials have confirmed.

    “We will be announcing a local, and we would fully expect that Volkswagen would deal with this local union if it represents a substantial portion of its employees,” UAW Secretary-Treasurer Gary Casteel of Ashland City said this morning.

    “It’s dependent on the employees and what they want to do.”

    The arrangement is a bold step towards gaining representation – as well as a UAW foothold in the South – even after the UAW lost a vote held by plant workers to decide on representation. But it makes one wonder why the vote was even held in the first place. To further make matters complicated, a local news outlet is reporting that the end goal of the arrangement would be the creation of a German-style works council.

    An official announcement is likely to come this afternoon, but the timing of the move is close to VW’s decision on whether to build their new three-row crossover – a vital product for the American market – in Tennessee or in Mexico.

    VW’s supervisory board, where labor organizations have a say in matters, does not want Chattanooga to get the new crossover without some kind of arrangement regarding organization of the plant’s labor – and IG Metall, Germany’s largest labor union, has deep ties to the UAW. VW conveniently left some wiggle room in the matter, and we may be seeing that manifesting in the “voluntary” union, which has the possibility of being recognized by VW, even though that doesn’t appear to be confirmed.

    On the other hand, the Tennessee state government is offering significant incentives to Volkswagen, but is vehemently opposed to the presence of the UAW.

    For some time, it seemed as if the UAW’s defeat, as well as the crossover’s production in Chattanooga, was a slam dunk. But now, things have gotten a little more complicated.

  6. Dan McGarry Reply

    August 18, 2014 at 2:19 pm

    Another update from the same source on VW in Tennessee and how they are instituting a ‘voluntary union’.

    http://www.thetruthaboutcars.com/2014/08/uaw-end-representing-volkswagen-workers/#more-894162

    How The UAW Could End Up Representing Volkswagen Workers
    By Derek Kreindler on August 18, 2014

    Despite losing a vote on organizing workers at Volkswagen’s Chattanooga, Tennessee plant, the UAW could end up representing Volkswagen workers through its newly formed Local 42, with the end goal being the establishment of a works council at Chattanooga.

    Local 42 was formed by the UAW as a voluntary union that workers could join. Representation for the workers would only come from a majority of them joining Local 42.

    Now, Reuters is reporting that the UAW appears to be close to hitting the majority threshold needed for representing workers at Chattanooga, though the UAW wouldn’t give specific numbers. Also unclear was whether the UAW would be recognized as the exclusive bargaining unit for Chattanooga workers.

    UAW secretary-treasurer Gary Casteel told Reuters that the two entities “have a consensus” on whether the UAW could exclusively represent workers, but a little reported development is likely to ensure that this goes through. Bernd Osterloh, VW’s global works council chief, was appointed to VW of America’s board of directors just over one month ago. Osterloh has been a major player in increasing cooperation between the UAW and IG Metall, Germany’s largest labor union, and has been fond of meddling in affairs at Chattanooga.

    The establishment of a works council was previously held as a condition of VW’s supervisory board – which includes labor leaders and representation – approving the upcoming three-row crossover for production at Chattanooga. And for a works council to happen, workers need union representation. Who better to fill that role than the UAW?

  7. Dan McGarry Reply

    August 25, 2014 at 3:36 pm

    Meanwhile in Michigan which enacted ‘right to work’ legislation in 2012 a trades person working for Ford “has filed charges against both the automaker and the UAW with the National Labor Relations Board on the objection to using a portion of his dues to support the Democratic Party”.

    Full Posting

    Employee Files Charges Against UAW, Ford Over Dues
    By Cameron Miquelon on August 25, 2014 ,the Truth About Cars

    http://www.thetruthaboutcars.com/2014/08/employee-files-charges-uaw-ford-dues/#more-899074

    Though it won’t be until next September when Detroit Three employees in Michigan will be able to opt-out of paying dues to the United Auto Workers, one Ford employee has gone ahead with legal action to recoup some of his dues now.

    Detroit Free Press reports Ford tool-and-die maker Todd Lemire, with legal help from the National Right to Work Foundation, has filed charges against both the automaker and the UAW with the National Labor Relations Board on the objection to using a portion of his dues to support the Democratic Party, invoking his Beck rights to claw back $98 of dues over the past three months thus far.

    If successful, the legal action would pave the way for others who don’t want to pay dues beyond core union activities, if at all, prior to the September 15, 2015 expiration date of the UAW’s current contracts with the Detroit Three. After that date, new contracts would allow all workers in Michigan the right to opt-out of paying any dues, the result of the state legislature’s passage of Michigan’s right-to-work law in 2012.

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