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Why MB Backed Away from a Pattern Bargaining Fight

By John Clarke
Copyright 1997. Contact publisher for permission to use.

Reviewing the economic and other pressures on the Canadian forest industry in 1997 is like looking through a glass darkly. It seems besieged on all sides. Rising competition from emerging Second and Third world countries where costs are a fraction of those in North America. Harassment by belligerent environmentalists who want declining harvests to shrink even further. Increasing pressure from governments to create more jobs, even as they reduce harvests to placate those same environmentalists. And a made-in-the-US softwood agreement restricting Canadian exports to give American producers a rosier bottom line.

The natural law of economics no longer applies, even if homage is still paid to the idea of a free market on both sides of the border. The industry is managed as much by politics as by what remains of the law of supply and demand.

Then there's the economics of labour. As labour law now stands, unions can impose at the cost of a postage stamp uniform wages and benefits on all companies where they represent the workers, no matter what the economics may say. If the employer can't pay, he simply goes out of business.

Search It's called pattern bargaining and it applies in one form or another right across the country.

Forestry is only one industry caught by pattern bargaining. Automobile manufacturers, airlines, mines, steel companies, and telecommunications are others. It is justified by the argument that where payroll costs are uniform, at least employers don't have to compete on labour. But more and more employers are now finding that uniform labour costs are no help if they're uneconomic in the first place. So pattern bargaining is under attack by industries in the teeth of cut-and-slash international competition.

The pressures of advancing technology and industrial decentralization, as well as changes in the markets themselves, are putting the squeeze on the one-size-fits-all contract concept. The big guns at Chrysler, General Motors and Ford have tried to break the pattern by pushing for the right to contract some of their work out to other, usually non-union, parts makers. They seemed ready to go to the wall on the issue but this year they found the price a bit too high. They caved, at least for now, and will have to soldier on with the restrictive union practices which, they claim, is denying them the flexibility they need to compete with overseas manufacturers.

British Columbia's MacMillan Bloedel Ltd. has just had a similar experience. To break the stranglehold of the Industrial, Wood and Allied Workers of Canada (IWA) in their wood products operations it de-accredited last year from Forest Industrial Relations Ltd., the industry's principal bargaining agent. It never objected to the general wages and benefits in the main IWA contract. It did argue that main table bargaining no longer adequately took care of local issues in the plants. So it wanted to bargain those on its own and the only way to do that was to de-accredit from FIR.

But it too has had to cry 'Uncle' and has rejoined FIR. The industry considers it a blow. If MB had been able to pull it off, other companies would have joined the queue for the same relief. That would have been the end of the pattern bargaining model in wood, where one negotiating committee bargains with FIR for all the coast workers.

The IWA used the simple expedient of threatening a strike against MB. It didn't matter that the union's new president, Dave Haggard and MB president Bob Findlay knew each other from their Port Alberni days and were on friendly terms. Haggard told Findlay that he was prepared to shut the company down in every operation if it stayed outside the main bargaining structure. He said he would prefer to do that while the rest of the industry was still running. MB would be scapegoated.

It was a threat that not even MB, the biggest of the bigs, could afford to ignore. The possibility of a strike singling out MB caused great nervousness among major shareholders. With the industry already in precarious shape financially, nobody wanted to run that risk.

A face-saving deal was inked under which the union committed to working out an agreement focussing on MB's special problems at the plants. Essentially it is not much different from a protocol FIR had earlier negotiated to cover local issues at all companies anyway. So at least for the foreseeable future nothing will change in the way labor and management will bargain on the wood products side.

On the pulp side employers do negotiate individually. It's been that way for years in Eastern Canada. In 1993 BC producers also broke up their centralized structure to go the lone wolf route. But it's a difference without a distinction. The Communications, Energy and Paperworkers Union of Canada simply negotiates one contract with a targeted company and then applies it to all the other companies. That's pattern bargaining by another name.

How that system still appeals to the pulp industry is a mystery. It means that the other companies are ceding bargaining responsibility to the targeted employer. It doesn't give them the protection against broad-brush economics they sought by going it alone.

The only way to get that kind of relief is with what Fraser Institute guru Michael Walker calls "competitive unionism." A union would lose its authority to impose its terms on all workers. It would have to convince them that the terms the union negotiates are worth accepting. The union would have to compete all the time for worker support. Right-to-work laws would be needed for that to happen and Walker is going to campaign for them this year in Alberta. If Alberta, with a $4 billion-a-year forest industry, were to adopt such a system, it might have a chance to catch on elsewhere.

The chances don't look good, however. Alberta turned the idea down last year. It looks more and more as if payroll will remain a fixed cost unlikely to reflect the true economics of the industry if the unions choose to ignore them.

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