PowerPoint

Presentation for
Industrial Relations in
Canada
Fourth Edition

Adapted by

Bui Petersen
Memorial University of
Newfoundland
Chapter 12
PUBLIC-SECTOR ISSUES
Poll
Open the MindTap Mobile app and select your
course.

What is unique about public-sector labour-management

relations?
A. Public-sector wages are higher than in the private sector.
B. Unions have had difficulty recruiting public-sector
workers.
C. The public sector was first to unionize.
D. Government is both employer and neutral third party.

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Learning Objectives
After reading this chapter, you should be able to
• explain why the public sector is a special industry
• identify the factors accounting for public-sector union
growth
• describe the theoretical differences between private and
public sectors

Continued…

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Learning Objectives
(Continued)
• analyze union power in the context of public-sector
bargaining
• explain essential services and special dispute resolution
procedures
• discuss management issues such as restructuring,
privatization, and HR practice differences

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Ontario Judge Finds
Back-to-Work Legislation Aimed at Postal
Workers Violates Charter
• Postal workers went on strike in 2011.
• Back-to-work legislation unilaterally set wages below
what had already been offered to the union.
• Legislation specified that remaining outstanding issues
would be settled through final offer arbitration.
• Ontario Superior Court found that the legislation was
violation of union’s rights to freedom of association and
expression under the Charter.
• Parties reached settlement in October 2012 through
negotiation and no arbitrator intervention.

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Why Study Public-Sector
Labour–Management
Relations?

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Why Study Public-Sector Labour–
Management Relations?

Size • 24% of the labour force

Union Density • 74.1% density vs. 16.9% in private sector

Impact • Largest unions in Canada (CUPE, NUPGE, PSAC)

Legislative • Large number of workers deemed essential

Framework services

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Why Study Public-Sector Labour–
Management Relations?

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Why Study Public-Sector Labour–
Management Relations?
Role of • Dual role: the government is both the impartial
umpire and employer.
Government
• Services provided by some employees are near-
Imperfect monopolies (firefighters, nurses, police officers)
• Public employers may have the power of a
Labour Market monopsony.

• Pressure to settle bargaining impasses comes

Politics and from the pressure generated from the loss of
services and public perception.
Public Opinion • There is a battle for public support.

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IR Notebook 12.1
NS Teachers Union Says Government
“Has Done Enough” to Avoid Strike
• In 2018, the Nova Scotia government introduced the
Education Reform Act, which would remove principals
and other senior supervisors from the union.
• Teachers were upset and responded by giving their
union an overwhelming mandate for illegal job action.
• The government responded with a compromise,
allowing principals to remain affiliated with the union.

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Politics and Public Opinion

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Politics and Public Opinion
Public good: an item whose consumption does not
reduce the amount available for others
• Justification for the monopolistic provision of some
services

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IR Today 12.1
9,600 Postal Workers on Strike
• Over 10 months of negotiations and the intervention of
two mediators
• Postal workers’ union (CUPW) held rotating strikes across
the country
• CUPW says need for a national overtime ban
• “Overburdening, overtime and overwork are all major
issues in this round of bargaining.”
• CUPW suggests that Canada Post is not serious about
trying to reaching an agreement.

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History of Public-
Sector Bargaining
UNION GROWTH FACTORS

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Union Growth Factors
Social
Upheaval

Growth in
Removal of
Public
Legal Barriers
Services

Growth
Factors
Absence of
Employer Dissatisfaction
opposition

Union
Mergers

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An Economic Analysis
of Union Power

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Applying Marshall’s Conditions
Marshall’s Condition
Demand for the product or service is
inelastic.
Labour is not easily substituted.
Supply of substitutes is inelastic.
Labour is a small proportion of total
costs.
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Impact on Power Balance
• Power to union
• Many public services are essential and would be
demanded at almost any cost.
• Power to union
• Many public-sector jobs are highly skilled and can’t be
outsourced.
• Limited impact on the balance of power
• Power to management
• The public sector is highly labour intensive.
12-18
Dispute Resolution
in the Public Sector

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Essential Services
Ranking of occupations from most critical to least
(Adams, 1981)
1. Police and firefighters
2. Hospitals and medical care
3. Utilities
4. Transportation
5. Municipal services
6. Civil servants
7. Teachers and educational authorities

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Three Models of Dispute
Resolution
• Results in the most freely negotiated settlements
Unfettered Strike • No procedure to determine essential services
• Invites back-to-work legislation

• Essential services are negotiated before bargaining starts.

Designation • Neutral tribunals will adjudicate disputes that arise from the
identification of essential services.

No-Strike (or • The right to strike is substituted with interest arbitration.

Interest Arbitration) • Chilling effect

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Side Effects of Arbitration
Chilling effect:
• The lack of bargaining flexibility caused by the
parties’ fear that a concession made in
negotiations will reduce the arbitration outcome
Narcotic or dependency effect:
• Frequent use of arbitration may cause the parties
to lose the ability to freely negotiate settlements
without third-party assistance.

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Side Effects of Arbitration
Wage outcomes:
• Interest arbitration wage outcomes are higher
than where unions have the right to strike.
Loss of control:
• Both parties lose control over the outcomes when
interest arbitration is used.
• From an employer’s perspective, this means the
loss of budgetary control.

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 Four Generations of Public-
Sector Bargaining
1960s • Growth phase of employment and unions

1970s • Retrenchments and citizen resistance

• Emphasis on performance and productivity of public

1980s services

1990 to Present Day • Attack on collective bargaining and restructuring fronts

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Management
Issues
RESTRUCTURING

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Restructuring
• Greater emphasis on job performance and
efficiency
• Focus has been on cost cutting
• increased provincial and federal debt

• Privatization of public sector used to reduce costs

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Restructuring
• New public management (NPM)
• a new approach to public administration in which
public organizations are to become more
decentralized, market-driven, and concerned with
financial control, and managers more empowered
and performance-oriented

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Restructuring

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Restructuring

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Implications of
Restructuring
G OV E R NMENT P OL I CI ES
M A N AGEMENT E MP LOYEES
U N I ON IZED E MP LOYEES

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 Government Policies
Employee Group
Restraint Policies Implemented
Impacted

Management Downsize and Early retirement

Employees downgrade the offers
conditions of
managers
Unionized Demand Joint problem Reduced
Employees concessions using solving focused on compensation
adversarial sharing of financial through legislation
bargaining data

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Management Issues
Using innovative work practices (e.g., teamwork,
job rotation) more difficult in the public sector for a
number of reasons
1. Higher unionization—unions may resist the introduction of
these programs.
2. Crisis atmosphere—enhanced workplace participation is less
likely under threats of layoffs, privatization, and cost cutting.
3. Civil service rules—bureaucracy acts as serious deterrent to
change.

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Union Issues
Union responses can be divided into three
categories
1. Acquiescence
2. Traditional collective bargaining (see IR Today
12.1)
3. Proactive
Unions do make strategic choices in reacting to
privatization proposals that affect their members.

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Union Issues

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Summary
• Public sector labour relations plays an important role in
Canadian society.
• Government’s dual role
• Essential public services
• Special dispute resolution procedures
• Privatization and cost cutting have had major impact on
recent negotiations.

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End-of-Chapter Questions and
Activities
Use the discussion questions and end of chapter
activities to solidify your understanding of
• what is unique about public sector industrial relations
• the theoretical differences between private and public sectors
• the dimensions of power in public-sector bargaining
• essential services and public-sector dispute resolutions procedures
• issues related to public-sector management, restructuring, and
privatization

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