By Tony Dean

It would be tempting to pretend that public sector collective bargaining is just going through a rough patch right now and that everything will return to normal in a couple of years.

Both current events and the past couple of decades tell us that this isn’t likely.

Collective bargaining isn’t working very well in the public sector. Giving it a poke here and there is not going to do the trick. Nor will sound-bite, quick-fix ideas crafted for election campaigns.

It is time for a thorough and open review of public sector labour relations.

There are more than one million employees and thousands of employers in Ontario’s broader public sector; 300,000 are employed in the health and social services sector and about the same in elementary and secondary education.

Some 70 per cent of public sector workers are unionized and there are about 4,000 collective agreements in this sector.

Public sector unionization ballooned in the 1970s and early 1980s in response to successive economic shocks. The only legal model available for collective bargaining was a labour code designed for industrial workplaces, with site-specific collective agreements and a dispute resolution mechanism based on the economic sanctions of worker strikes or employer lockouts. (As an aside, NHL players are “locked out” right now).

From the outset, the industrial model didn’t work for emergency services such as police and firefighters so special purpose labour codes were put in place with arbitration replacing the right to strike and lock out. Nurses and other hospital and nursing home workers bargain under an arbitration regime too - but not doctors, who have long desired it.

Aside from TTC workers who were declared essential in 2011, the vast majority of other unionized public sector workers still bargain under the industrial strike/lockout model. The same is true for public sector workers across the country.

Labour regimes based on the industrial union model have worked remarkably well in the private sector. For the most part they have been resilient and adaptive to economic conditions in good times and bad. Recent developments in auto sector bargaining are a case in point.

It has been a very different story in the public sector.

First, the public sector was insulated from the intense global competition that has seen large chunks of manufacturing move offshore.

But as revenues declined in the face of slower economic growth, governments of all political stripes continued to spend, especially in high cost areas such as health care, education, social services and justice services. And Ontarians do love their public services.

So, when deficits hit unmanageable levels, governments have no choice but to look at labour costs and to public sector unions in the search for solutions.

This is where the going gets rough. Public sector unions don’t face the immediate competitive pressure of capital mobility and offshoring of manufacturing that confronts the Canadian Auto Workers. Forecasts of huge deficit numbers for 2017 on a Ministry of Finance spreadsheet are not as immediately convincing as a bottom line that is about retaining thousands of high-paying auto sector jobs.

It is equally true that governments are not like other employers - including global behemoths like GM.

The key difference is that governments simultaneously occupy three roles: they are major employers and big funders of employment; they are elected to be guardians of the public interest; and they are legislators. In tough fiscal times all three of these roles coincide.

In between fiscal crises, governments maintain a keen distinction across these roles. But in a crunch, governments of every political stripe shift almost effortlessly between them. This reaches a pinnacle of controversy when legislative powers are used to override collective agreements or to change the rules of collective bargaining.

A 1998 study by the Canadian Policy Research Networks looked at public sector collective bargaining involving 15 Canadian governments in power between 1990 and 1998, all of whom were trying to reduce public service costs. Twelve of the 15 governments legislated new contracts. This trend has continued on and off but has accelerated again in the wake of recent economic turmoil.

Governments will continue to work the edges of collective bargaining frameworks and arbitration processes in tactical ways. And they always have the prerogative to legislate (although governments do not have the freedom of scope that was available prior to recent Supreme Court decisions).

But it’s time to wake up to the reality that collective bargaining in Ontario’s public sector is not working as well as it should.

What would a review look at? Here are some initial thoughts:

* Rationalizing the structure of collective bargaining: Collective bargaining is hugely fragmented, inefficient and costly for employers and unions. While workplace level bargaining is important in addressing local issues, serious thought should be given to consolidating bargaining on compensation and benefits at a sectoral level. Service delivery issues could also be discussed at this level.

This has worked well in other jurisdictions and sector specific variations would be necessary. Closer to home, this approach has already been well tested on a voluntary basis in Ontario’s hospital sector.

This would achieve economies of scale and provide a more realistic (and undoubtedly challenging) venue for bargaining.

It could also result in a more cost effective consolidation of benefits and pension plans.

And consolidation would give a stronger voice to lower paid workers in small workplaces in the social services and community care sectors.

* Encouraging dialogue outside of the context of collective bargaining: The highly structured and intermittent process of collective bargaining is often seen as the only forum for talks between employers (including the government) and public sector unions. This makes no sense. Given the long-term fiscal outlook and increasing demands for public services, we should be talking about public sector productivity, efficiency and working conditions on an ongoing basis. It never hurts to talk.

* Arbitration: It seems likely that binding arbitration will continue to replace the right to strike where “essential” services are in play. This makes it critical that employers, unions and the government have confidence in the arbitration system and the independence of arbitrators.

It would also be important to examine mechanisms to encourage more agreements prior to arbitration. This might include a more intensive approach to mediation, and the possibility of alternatives to conventional interest arbitration. For example, while traditional final offer selection may pose risks given the importance and complexity of the issues, there may be scope for exploring mediation coupled with some more flexible or innovative form of final offer selection.

* Better information: A review should also address the need for common, accurate and complete information about collective bargaining results; and accurate data on total compensation and benefits costs. More informed and evidence-based talks should be a central feature of any consolidated approach to bargaining.

Overall, a review of this kind would have the purpose of improving the integrity and viability of collective bargaining in the broader public sector. It would make it work better for all concerned, including the public. In this sense it would also ideally consider the government’s sometime role as both employer and legislator, as sensitive as this might be.

Tony Dean is a former Secretary of the Cabinet and head of the Ontario Public Service. He is currently a professor at the University of Toronto’s School of Public Policy and Governance and continues to advise governments on public policy.

Tony Dean: New model needed

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