Labor & Employment Law

Framework for Fairness Agreement

By Michael Fitzgibbon

There's been allot of discussion about the Framework for Fairness Agreement between the Canadian Auto Workers and Magna International Inc., a major automotive parts supplier and Canada's largest automotive employer.  According to a CAW News Release:

The agreement, called the Framework of Fairness, will allow Magna employees to participate in secret-ballot votes regarding membership in the CAW. It also establishes an innovative new structure for labour relations involving workplace elections and referenda; a multi-faceted dispute settlement process; and the use of final-offer arbitration instead of work stoppages to settle contract disputes.

Once fully implemented, the Framework would cover up to 18,000 Magna production employees working in about 45 manufacturing facilities in Ontario. 

The fact that such an agreement would ever be agreed to has received much discussion.  The feature that has been given the brunt of the attention is the "final-offer arbitration" and the removal of the right to strike (see, for example, Magna's union deal: no strikes) .  Historically, the cornerstone of the labour relations system in Canada has been the right to strike or lockout.  Labour relations have been described as "power relations" where the parties can resort to their ultimate weapon (the strike or lockout) as a way of securing their terms. 

In saying that, interest arbitration has been an alternative to the right to strike or lockout in certain industries (i.e. those regulated by the Hospital Labour Disputes Arbitration Act) and in some circumstances, in essential services. 

The CAW has noted that a number of features of the framework depart from the way traditional labour relations are done.  Among other things:

• Traditional grievance procedures are replaced with a multi-track Concern Resolution Process. This process includes plant-level ?hearings? before a panel of a worker?s peers; a company-wide hotline; and review by senior Magna and CAW committees. If all else fails, unresolved concerns are referred to traditional arbitration.
• The selection of local employee representatives (called ?Employee Advocates?) involves an indirect process of application, peer group screening, and secret-ballot ratification ? rather than direct election.
• Many decisions are made through local structures of workplace democracy, including a Fairness Committee at each Magna plant. The Fairness Committee includes worker and management representatives (with the workers holding a 50%+1 majority). The worker representatives are selected democratically by secret ballot vote from every shift and area of the plant. Some local decisions are even made by referendums.
• If the CAW and Magna cannot agree on changes to the national contract (when it is renegotiated every three years), outstanding matters are referred to an arbitrator for final-offer selection. There will be no strikes or lockouts under the new system.

These are interesting times, without question, and Magna and the CAW are to be commended for coming up with such a creative way of dealing with a number of complex issues.  It remains to be seen whether this approach will gain traction in other workplaces.

Full post as published by Thoughts from a Management Lawyer on October 20, 2007 (boomark / email).