Prohibiting replacement workers in federally regulated industries - Discussion paper

From: Employment and Social Development Canada

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Introduction

The Government of Canada knows that the ability to form a union, bargain collectively and strike are essential to a healthy workforce. These rights allow workers to act together and improve the power imbalance between individual workers and their employer. In 2015, the Supreme Court of Canada affirmed that the Canadian Charter of Rights and Freedoms includes the right to strike.

When unionized workers exercise their right to strike, they sacrifice their pay and benefits to try to improve their working conditions by putting pressure on their employer. However, the Government has heard that this right is undermined when an employer brings in replacement workers to keep the business going while workers are on strike or locked out.

To ensure that all workers in federally regulated sectors continue to benefit from a meaningful right to strike, the Government has committed to introduce legislation by the end of 2023 to prohibit the use of replacement workers when a union employer in a federally regulated industry has locked out employees or is in a strike.

What is a replacement worker?

A replacement worker is a person who does the work of a unionized worker who is on strike or locked out. Unlike other countries, such as the United States, workers in Canada have the right to go back to their jobs when a strike or lockout ends. This means that employers cannot permanently replace workers just because they went on strike or were locked out.

This paper focuses on temporary replacement workers. That is, workers used by the employer to fill in for unionized employees only while they are on strike or locked out. Many types of workers can be considered replacement workers.

Who would this affect?

The prohibition on replacement workers would affect the sectors of the economy that are regulated by the federal government and covered by Part I (Industrial Relations) of the Canada Labour Code (Code). Part I of the Code is the federal law that sets the rules for unionization, collective bargaining and labour disputes in federally regulated sectors. More specifically, Part I applies to:

  • the federally regulated private sector, which includes key industries such as:
    • banking
    • telecommunications and broadcasting
    • air, rail, and maritime transportation
    • most Crown corporations (for example, Canada Post)
    • certain activities (for example, governance and administration) of First Nations band councils and Indigenous self-governments, and
    • other industries (see Annex A for a full list)
  • all private sector businesses and municipal governments in the Northwest Territories, Nunavut and Yukon

In total, about 22,000 employers and about 985,000 employees are covered by Part I of the Code.

The prohibition on replacement workers would not affect employers and employees in Canada working in sectors that are regulated by provincial Governments.

Purpose

The purpose of this discussion paper is to gather Canadians’ views on replacement workers in federally regulated industries. The feedback will be used to inform how the Government designs its policy related to replacement workers. This discussion paper:

  1. gives important context on replacement workers in federally regulated sectors
  2. outlines key discussion questions for stakeholder feedback
  3. invites all interested stakeholders to write to the Labour Program to express their views on the discussion questions
  4. supports virtual roundtable discussions with select stakeholders in November and December 2022

All interested Canadians and groups can provide comments on the discussion questions, or any other general comments they wish to make.

Please send your responses no later than January 31, 2023 to: ESDC.NC.LABOUR.CONSULTATIONS-TRAVAIL.NC.EDSC@labour-travail.gc.ca.

By providing your feedback on this discussion paper, you are confirming that you agree with the Privacy Notice Statement included as Annex B.

Context

What is the law now?

Currently, Part I of the Code only prohibits employers from using replacement workers if they are using them to undermine a union’s ability to represent its members.

Under this limited ban, a replacement worker is anyone who is assigned to do the work of an employee on strike or locked out, and

  • is not in the bargaining unit that is on strike or locked out or
  • is in the bargaining unit, but was hired after the union and employer started bargaining

Any person or organization can complain to the Canadian Industrial Relations Board (CIRB) if they think that an employer is illegally using replacement workers. If the CIRB agrees, it can order the employer to stop using replacement workers for the rest of the strike or lockout, and make any other necessary orders.

Question for discussion:

  1. What are your views on the current, limited ban on replacement workers under Part I of the Code?

Use of replacement workers in the federal jurisdiction

Employers in federally regulated sectors are unique and diverse. Some employers regularly use replacement workers when there is a strike or lockout, some cannot use replacement workers for practical reasons (for example, the employees on strike are too specialized to replace), and some can use replacement workers, but choose not to.

From January 1, 2012 to August 1, 2022, the Labour Program estimates that employers used other workers and managers to do some or all of the work of striking or locked out employees in about 42% of all strikes and lockouts. Note that this does not mean that the employer continued operating at full capacity throughout the strike or lockout. It only means that, at one point in that strike or lockout, the employer had someone perform the work of an employee who was on strike or locked out.

In the last 5 years, employers have used replacement workers in the air, rail and marine transportation sectors, as well as the telecommunications sector.

Questions for discussion:

  1. Do you believe that the use of replacement workers is a problem in federally regulated sectors?
  2. What are the benefits of using replacement workers in federally regulated sectors?
  3. What are the downsides of using replacement workers in federally regulated sectors?
  4. How would a prohibition on replacement workers affect your sector?

Replacement workers in other jurisdictions

British Columbia and Quebec are the only 2 provinces that currently prohibit employers from using replacement workers during a strike or lockout. All other provinces in Canada do not prohibit employers from using replacement workers.

British Columbia

The British Columbia Labour Relations Code prohibits employers from using replacement workers, whether paid or not. In British Columbia, a replacement worker is anyone who is assigned to do the work of an employee who is on strike or locked out and who:

  • is hired after the union and employer start bargaining
  • is an employee or manager who normally works in a different work location
  • is an employee who is transferred to the work location where the strike or lockout is happening after the union and employer start bargaining
  • is provided by another person (for example, a contractor)

The Labour Relations Code also allows any worker to refuse to do the work of someone who is on strike or locked out. It also bans the employer from disciplining them for that decision. British Columbia’s ban on replacement workers has 2 exceptions. First, it does not cover people who are members of the bargaining unit that is on strike or locked out. Second, it does not include people who work at the same location as the striking or locked out workers, as long as they were not transferred there after the union and employer started bargaining.

If a person thinks an employer is illegally using replacement workers, they can make an unfair labour practice complaint to the British Columbia Labour Relations Board (BCLRB). The BCLRB can order the employer to stop using replacement workers.

Quebec

Quebec’s Code du travail has the most complete ban on replacement workers. Under this ban, a replacement worker is anyone who is assigned to do the work of an employee who is on strike or locked out and who:

  • is hired after the union and employer start bargaining
  • is an employee or manager who normally works in a different work location
  • is an employee who normally works at the work location where the strike or lockout is occurring
  • is a contractor or is provided by a contractor
  • is an employee who is a member of the bargaining unit that is on strike or locked out

Beyond this, Quebec’s legislation also bans employers from allowing bargaining unit members to do work in any other work location while the bargaining unit is on strike.

There are 2 main exceptions to Quebec’s ban. First, it allows employers to use managers who work in the same work location to perform the work of employees who are on strike or lockout. Second, employers are allowed to use replacement workers during a strike or lockout if the purpose is to avoid the destruction or serious deterioration of the employer’s property.

If a person thinks an employer is illegally using replacement workers, they can request that the Minister of Labour investigate. The Minister can issue a fine to the employer if the investigation determines that the employer illegally used replacement workers.

Questions for discussion:

  1. Should people have the right to refuse to do the work of employees who are on strike or locked out, even if the ban on replacement workers does not apply to them?
  2. Should unionized employees be prohibited from working for the employer if their bargaining unit is on strike or locked out?
  3. There is no universal definition of a replacement worker. Which types of workers do you think a prohibition on replacement workers should apply to?
  4. What types of workers should be allowed to do the work of striking or locked out employees, if any?
  5. Do you think there should be any exceptions to a prohibition on replacement workers? Should an employer be allowed to use replacement workers in very specific situations (for example, to prevent destruction or damage to property)?
  6. What do you think is the most effective way to make sure that employers respect a ban on replacement workers? How should it be enforced?

Debate

Prohibiting replacement workers is a controversial topic. On one hand, unions and labour groups generally strongly support a prohibition. On the other, employers and pro-business groups generally strongly oppose one.

On one level, it is obvious what happens when an employer uses replacement workers. Replacement workers allow the employer to keep operating. This reduces the impact of the strike or lockout on the employer’s bottom line. However, it is not so obvious what happens when a Government prohibits employers from using replacement workers. Fortunately, several academics have studied this issue. Here is a summary of their findings:

Effects on strikes and lockouts

Some studies look at whether prohibiting replacement workers affects how often strikes and lockouts occur, and how long they last. The majority of these studies suggest that when a province prohibits replacement workers, this is associated with more frequent strikes and lockouts, at least in some sectors (Gunderson, 2008 | Landeo and Nikitin, 2005 | C.D. Howe Institute, 2010 | Tu, 2011).

However, one study found that prohibiting replacement workers reduced the average strike length, but the length went back to normal after 2 years (Duffy and Johnson, 2009)

Effects on unionization and workplace relations

Some studies look at whether prohibiting replacement workers impacts unionization and the workplace. These studies suggest that prohibiting replacement workers:

  • may contribute to safer workplaces and a decrease in violence on the picket-line (Singh and Jain, 2001, 2005; Unifor, 2021)
  • could increase unionization rates (Martinello, 2000 | Legree et al. 2017)

Effects on the economy

Some studies look at whether prohibiting replacement workers can impact a province’s economy. To do this, they compare provinces that prohibit replacement workers, to those that do not. These studies suggest that provinces that prohibit replacement workers have a lower employment rate on average (Budd, 2000 | C.D. Howe Institute, 2010).

Note

Many of the studies above measure the effects of replacement worker prohibitions in the provinces. However, provinces regulate different sectors of the economy than the federal government. For instance, provinces are responsible for sectors like healthcare, education, police, construction, manufacturing, retail, and other local businesses. Federally regulated sectors are different, have different union-employer relations and different problems to solve. This may mean that prohibiting replacement workers in federally regulated sectors could have different impacts.

Questions for discussion:

  1. What do you think the impact of a prohibition on replacement workers would be:
    • on work stoppages?
    • on labour relations?
    • on the economy?
  2. Are there any other impacts not discussed in this paper that should be examined?

Annex A – Federally regulated private sector

The federally regulated private sector includes:

  • air transportation, including airlines, airports, aerodromes and aircraft operations
  • banks, including authorized foreign banks
  • grain elevators, feed and seed mills, feed warehouses and grain-seed cleaning plants
  • First Nations band councils (including certain community services on reserve)
  • most federal Crown corporations, for example Canada Post Corporation
  • port services, marine shipping, ferries, tunnels, canals, bridges and pipelines (oil and gas) that cross international or provincial borders
  • radio and television broadcasting
  • railways that cross provincial or international borders and some short-line railways
  • road transportation services, including trucks and buses, that cross provincial or international borders
  • telecommunications, such as telephone, Internet, telegraph and cable systems
  • uranium mining and processing and atomic energy
  • any business that is vital, essential or integral to the operation of one of the above activities

Annex B – Privacy notice statement for submissions

The submission you provide as part of this consultation is collected under the authority of the Department of Employment and Social Development Act (DESDA). It may be used and disclosed by Employment and Social Development Canada (ESDC), including the Labour Program, for policy analysis, research and evaluation purposes. However, these additional uses and/or disclosures of your personal information will never result in an administrative decision being made about you.

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Your submission may be published – in whole or in part – on canada.ca, included in publicly available reports on the consultation, and/or compiled with other responses in an open-data submission on open.canada.ca. It may be shared throughout the Government of Canada, other levels of government, and non-governmental third parties.

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If you are not satisfied with our response to your privacy, you have the right to file a complaint with the Privacy Commissioner of Canada regarding ESDC’s handling of your personal information at: https://www.priv.gc.ca/en/report-a-concern.

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