The Law of Work
  • Home
  • About
  • Professor David Doorey
  • Osgoode Hall LLM
  • Books
  • Guest Contributors
  • Useful Links
    • Archive
  • Home
  • About
  • Professor David Doorey
  • Osgoode Hall LLM
  • Books
  • Guest Contributors
  • Useful Links
    • Archive
The Law of Work
Collective BargainingComparative Work LawFissured WorkFreedom of AssociationInterest ArbitrationInternational LawStrikes and LockoutsUnions and Collective BargainingUnited States

How New Zealand’s New Sectoral Collective Bargaining Model Would Work in Canada

by David Doorey May 11, 2021
written by David Doorey May 11, 2021

Written by David Doorey, York University

New Zealand’s government is in the news for more than its stellar management of COVID.  This week, the government announced its intention to move forward with an interesting new model of “sectoral” collective bargaining called Fair Pay Agreements. This move is attracting considerable attention in the global labour law world because sectoral or broader-based based bargaining has been floated for years as the solution to declining collective bargaining coverage in countries, including Canada and the US, that rely upon decentralized, workplace by workplace bargaining in most cases.  The Clean Slate project out of Harvard Law School I participated in a couple of years ago recommended a model of sectoral bargaining for the US similar to the New Zealand model.

Sectoral bargaining moves the bargaining upwards to the sector or industry level and permits collective bargaining to set standards that apply to all workers in that sector or industry.  A central ambition of sectoral bargaining is to take low wages out of competition so that businesses compete on factors other than low wages, long hours, and other terrible labour practices.  Low wage sectors like retail, food and hospitality, homecare, and agriculture are among those areas that advocates argue would most benefit from sectoral bargaining.

However, employers are almost uniformly opposed to broader based bargaining models, as they are in New Zealand, except when they work for their own benefit (see the history of sectoral bargaining in Ontario construction).  Although some Canadian governments have explored extending sectoral bargaining to some low-wage industries (see my summary of the most discussed model here), ultimately, they have backed down due to employer opposition, a lack of a unified voice from labour, and uncertainty about how and whether proposed models would work in practice.

For all of these reasons, the NZ experiment will be watched with great interest.  In this post, I attempt to explain my reading of how the NZ model will work using a Canadian hypothetical.  I have attached a PDF summary of the New Zealand model at the end of this post, if you are interested.  Or you can look at the government’s source documents yourself.  Here is short overview prepared by the NZ government. Here is an earlier Discussion Paper prepared for the government.  I may not have everything right, since I did a quick read. If I have something wrong, please let me know.

Here is my attempt to explain how the model would work if it were in effect in Canada.  Let’s use as an example the fast-food industry in Ontario.

Imagine a union applying to represent all fast-food workers in Ontario in negotiations for a Fair Pay Agreement that fixes minimum pay rates and basic rules on hours of work and overtime.  Here is how the new New Zealand model would work if it were law here.

A Canadian Hypothetical Application of the New Zealand Model

The NZ model permits a union (or unions) to apply to represent a specific occupation (for example, cashiers employed at fast food restaurants, a unit by the way that would be primarily female), or industry (all fast-food employees).

Let’s say that the UFCW applies to represent all Fast-Food workers in Ontario, an industry-wide unit rather than a more narrow “occupation” unit.  Maybe the law would permit unions to go by city or municipality, such as the City of Toronto, but let’s aim big! Or maybe the UFCW and another union, say Unifor, coordinate together to organize fast food workers. [Can Canadian unions cooperate?  Big question.]

In order to start the process towards achieving a Fair Pay Agreement (FPA), the union(s) would need to collect union membership cards on behalf of at least 10% of employees working in fast food in Ontario (I assume some Stats Canada figure could be used to calculate that number) OR a minimum of 1000 employees. It is only “employees” who are covered, not contractors (although the government has said it intends to extent the model to contractors later).  If the union(s) can reach the required threshold, they can apply to bargain an FPA. This is like an application for certification using card-check.  The Labour Board would check the cards and the stats and determine if the union(s) have met the threshold. If so, the FPA bargaining process would begin.

[Note that there is another “public interest method” way to start the process that does not require the unions to meet these thresholds, which I discuss in the attached document, but we will use what I assume will be the more common approach in my example]

At this point, if not before, the fast-food employers would need to organize themselves and decide who is going to represent the industry in bargaining.  The provincial government could help with this and also provide some start-up funding to help employers organize.  But ultimately some form of employer association comprised of every fast-food restaurant you can think of must come to the table to bargain industry level base rules relating to wages, hours of work, and overtime pay.  Maybe other items will be negotiated too, but these items MUST be agreed upon.  The two parties then bargain “in good faith”, a concept that presumably takes on the same meaning as under existing labour law.

If the parties reach a deal, that deal must then be “ratified” by the employees and the employers.  All fast-food workers in Ontario get notice of the vote and I presume some way to vote electronically on the proposed FPA.  I will pause here to note that the law requires employers to provide the unions with the contact information of all the employees covered by the proposed FPA (employees can opt out), and to permit the union access to the workplace to speak to employees during non-working time AND the employer must permit the union to hold at least 2 paid, two-hour meetings at the workplace to discuss the FPA.  You can imagine that this is not very popular with the employers!

If a majority of ballots support the FPA, then the employees have accepted the FPA. However,  the employers must also vote to accept the FPA. For employers, voting is weighted: an employer with 200 employees gets 200 votes, but smaller employers, say with 20 or fewer employees get a weighted tally based on government-imposed rules.  For example, small employers might get 2 votes per employee.  Presumably the point of that exercise is to respond in a small way to concerns that large fast-food conglomerates could use the process to drive smaller lower-margin employers out of business by agreeing to terms more favourable to larger employers.  This was an issue raised by the Changing Workplace Review in Ontario as a reason to reject sectoral bargaining.

If the FPA is ratified by employees and employers, then it’s done and ready to be implemented.  If the FPA is voted down, the parties return to the bargaining table, however if the FPA is voted down twice, then the terms of the FPA are sent to binding arbitration. I imagine a system of Final Offer Arbitration here, in which both parties put forward their best offer and the arbitrator chooses one. Note that there is no strike option here. An industry wide strike in support of a FPA would be unlawful in Canada.

Once the FPA is finalized, either because it was ratified or because an arbitrator imposed it, the FPA is then becomes law. This is not a model we use much in Canada, but the idea of a negotiated agreement being introduced as law is an interesting regulatory technique with lots of examples.  The Ontario government would enact a statute (the Fair Pay Agreements Act, say) that would include the infrastructure of the model and a section that permits Regulations that would incorporate FPA.  Once that Regulation is enacted, the FPA is effectively law and can be enforced as a Regulation. Complaints alleging bad faith bargaining or violation of the FPA would go to the Labour Board, like an employment standards or unfair labour practice complaint.  Or maybe the government creates a new tribunal to deal expressly with the new FPA model.

The FPA would apply to all fast-food workers in Ontario. Not all of them would be union members, but the law requires the UFCW (and maybe Unifor) to represent all employees covered by FPA fairly in relation to the negotiations, although the unions are permitted to bargain into the FPA a wage premium equal to the amount of union dues.  I assume that the unions would not be legally required to represent non-members in complaints that the FPA has been violated, but those employees can file their own complaint with the Tribunal.  Perhaps a benefit of joining the union would be these extra representational rights.  Also, I assume that the unions could still organize individual stores under the traditional collective bargaining legislation, since the FPA merely creates basic minimum standards.  An employer can also always offer employees more than the FPA.

That’s basically how the model works.

What do we think?  Would this work in Canada?  Would it be an improvement over existing labour standards legislation, which also creates a statutory floor of rights. Why or why not?

Here is my summary of the New Zealand Fair Pay Agreement model.

David Doorey, “How New Zealand’s New Sectoral Collective Bargaining Model Would Work in Canada” Canadian Law of Work Forum (May 11 2021): https://lawofwork.ca/nzsectoralbargaining/

3 comments
1
FacebookTwitterLinkedinEmail
David Doorey

Professor Doorey is an Associate Professor of Work Law and Industrial Relations at York University. He is Academic Director of Osgoode Hall Law School’s executive LLM Program in Labour and Employment Law and a Senior Research Associate at Harvard Law School’s Labor and Worklife Program. Professor Doorey is a graduate of Osgoode Hall Law School (LL.B., Ph.D), London School of Economics (LLM Labour Law), and the University of Toronto (B.A., M.I.R.).

Leave a Comment Cancel Reply

You must be logged in to post a comment.

3 comments

Random Steelworker May 13, 2021 - 10:59 pm

It would work and it did work. It’s not new. Sectoral Bargaining puts emphasis on the “trade” part of “trade union”. Joe Burns discusses this extensively in “Reviving the Strike”. Before the NLRA and efforts towards the Wagner Model in Canada in the late 1930’s it was the customary union approach. Union recognition and everything else was based on a simple model of “comply or we strike” ;where strike is not a withdrawal of labour, but a direct labour effort to hobble, reduce and shut down production and therefore employer income. A strike is to make an employer’s pocketbook bleed, period. In such a strategy a srtike should be as large as possible (such as a whole industry) to shock the system with such a stoppage that replacement workers cannot be arranged for every employer.

Alternatively it is very similar to the Wage Board system under the Fair Labor Standards Act in the US, which was designed to work in tandem with the NLRA. Without the FLSA’s Wage Board system, the actual Wagner Model has been compromised since the 1940’s.

The enterprise bargaining system is a direct result of the Wagner Act’s actual innovation: compulsory recognition and bargaining orders. Such orders were issued on an employer-by-employer basis. That has been the Wagner Model achilles heel since 1935. I believe it was no gain for the labour movement either.

Log in to Reply
Christopher Albertyn May 17, 2021 - 11:18 am

What you describe, David, is similar to the bargaining council system in South Africa, where unions and employer associations respectively have proportional representation within an industry-wide bargaining council. The agreement reached is extended to all employers in the industry, if the bargaining council represents a majority of employees and employers in that industry. Another model, somewhat similar, is what occurs in Austria. There to be in business each employer must first become a member of an employers’ association that is in a bargaining relationship with an industry representing union (or unions). So running a business requires being part of the employers’ association. That association negotiates an industry agreement for all employers and all workers in that industry. All of these systems of sectoral bargaining have the advantage of removing wage costs out of competition so raising the general living standard of the workers covered by them. Two problems here, as you mention. Will unions be willing to be in a joint council with other unions, represented proportionately? That is fundamental to successful sectoral bargaining that is not skills based (as in construction). And secondly, where are the employers’ associations willing to engage together to bargain by sector?

Log in to Reply
Random Steelworker May 23, 2021 - 6:43 pm

Istm employers are fundamentally unwilling to remove wages from competition as much if the unique structure that employers use to control the empliyer identity isxaboutbwahe suppression.

Second, there are two related conceptual problems at the heart of labour law. The first is an employer preference for enterprise bargaining and consequent stiff resistance to union accretion, concentration or expansion at a single company, much less across companies. If the law was more amenable to organic expansion and accretion of unions, thus model would work much better.

The second problem is that wages are often heat negotiated on the broadest possible basis such as a sector,.while discipline and gruevances are better negotiated locally on.tje smallest possible scale. Instead of a two-track collective bargainig system (used widely in the public sector), employers prefer to remain atomized and keep their unions even.mire atomized.

Perhaps the entire union recognition and required recognition model should be revisited.

Log in to Reply
previous post
What Does Uber’s Decision to Treat Drivers as ‘Workers’ in UK Mean for Canada?
next post
Dispelling Common Assumptions about Employees’ Legal Right to Sick Pay

You may also like

Models of Broader-Based Sectoral Collective Bargaining

February 3, 2023

Is Memorial University Illegally Preventing Workers from Joining...

February 2, 2023

What Might a Right to Strike for Non-Union...

December 16, 2022

Lessons for the Railway Showdown from a Victory...

November 30, 2022

Court Strikes Down Ontario’s Punitive Public Sector Wage...

November 29, 2022

New Video: Standing Up to the Notwithstanding Clause

November 25, 2022

On the Right to Strike in Canada and...

November 1, 2022

UPDATE: Ontario Invokes Notwithstanding Clause, Crushes Labour Rights...

October 31, 2022

R.O. MacDowell: Who Defines Appropriate Bargaining Units After...

October 10, 2022

(Video) Professor Doorey on ‘Micro Labour Law’ Below...

October 6, 2022

Follow Us On Social Media

Twitter

Latest Tweets

David J. Doorey🇨🇦 @TheLawofWork@mas.to Follow

Law Prof. Talking #labor & #employment #law to the masses. @YorkUniversity @OsgoodeNews @LSELaw @CLJEHarvard @Jacobin @OnLaborBlog https://t.co/5V9r8VPHsh

TheLawofWork
thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
10h

I can’t believe that Almost Famous came out 23 years ago.

Time is flying by.

Reply on Twitter 1622776388179705859 Retweet on Twitter 1622776388179705859 3 Like on Twitter 1622776388179705859 14 Twitter 1622776388179705859
thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
11h

I had an LLM student who had a part-time job phantom writing labor arbitration decisions based on arbitrator’s notes and instructions.

Like law clerks do for judges (except parties don’t know about the phantom arb writer).

Is using a machine different? Interesting debate.

Valerio De Stefano @valeriodeste

The crucial part starts on p. 5, where the Court reports the answers to the legal questions they posed to ChatGPT. Then, at the end of p. 6, the Court adopts the arguments given in these answers as grounds for its decision.

Reply on Twitter 1622759377944952834 Retweet on Twitter 1622759377944952834 5 Like on Twitter 1622759377944952834 8 Twitter 1622759377944952834
thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
12h

Quebec passed anti-scab legislation in 1977, BC in 1993, & Ontario 1993-95.

Hysterical claims that these laws cause job losses & loss of investment aren't supported by evidence. Businesses just don't like them.

Short 🧵

1/

Seamus O'Regan Jr @SeamusORegan

We’re banning replacement workers, as we said on Oct. 19th.

We’re working with unions and employers to get the balance right.

As agreed, government will introduce legislation by the end of this year.

Reply on Twitter 1622745098088861702 Retweet on Twitter 1622745098088861702 16 Like on Twitter 1622745098088861702 39 Twitter 1622745098088861702
Load More

Categories

  • Alberta
  • Artificial Intelligence
  • Australia
  • British Columbia
  • Charter of Rights and Freedoms
  • Childcare
  • Class Action
  • Climate and Just Transition
  • Collective Bargaining
  • Common Law of Employment
  • Comparative Work Law
  • competition law
  • construction
  • COVID-19
  • Diversity
  • Employee Classification
  • Employment Insurance
  • Employment Regulation
  • Europe
  • Financial Industry
  • Fissured Work
  • Freedom of Association
  • frustration of contract
  • Gig Work
  • Health and Safety
  • Health Care
  • Human Rights
  • Immigration
  • Interest Arbitration
  • International Law
  • Labour Arbitration
  • Labour Economics
  • Law of Work Archive
  • Legal Profession
  • Manitoba
  • Migrant Workers
  • Minimum Wage
  • Newfoundland
  • Nova Scotia
  • OLRB
  • Ontario
  • Pension Bankruptcy
  • Privacy
  • Public Sector
  • Quebec
  • Real Life Pleadings
  • Saskatchewan
  • Scholarship
  • Sports Labour
  • Strikes and Lockouts
  • Student Post
  • Supreme Court of Canada
  • technology
  • Transnational Law
  • Uncategorized
  • Unions and Collective Bargaining
  • United States
  • Videos
  • Women and Work
  • Wrongful Dismissal
  • Home
  • About
  • Guest Contributors
Menu
  • Home
  • About
  • Guest Contributors
  • Legal Scholarship
  • Useful Links
  • Archive
Menu
  • Legal Scholarship
  • Useful Links
  • Archive

2020. Canadian Law of Work Forum. All Rights Reserved.