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O’Grady on the TTC and Interest Arbitration

Occasionally, I get comments here that are deserving of wider readership.  Here is one of those.   John O’Grady,  a long-time labour researcher and economist, with vast experience in interest arbitrations left the following comment in response to my post of earlier this week about the spat amongst politicians as to whether the TTC should be declared an essential service:

Arguments against compulsory arbitration that turn on ILO Convention 87 have always struck me as unpersuasive. Convention 87 makes no reference whatsoever to strikes or workplace actions. This is an inferred right, not a stated right. And to my mind the logic behind the inference is not compelling. Whenever the courts have interjected themselves into labour relations by enunciating sweeping legal doctrines, they have usually made a mess of it. The decision on BC Health Services is no exception. A far more pragmatic approach is required.

The first pragmatic question is ‘does arbitration as it is practised in Canada confer advantages on working people that are essentially comparable to those conferred by conventional collective bargaining with the right strike?’ The answer to that, I believe, has to be ‘yes’. In the first place, without exception, all empirical work on compulsory arbitration comes to the conclusion that arbitrated awards generally replicate or improve upon prevailing norms. Second, the OLRA, among other Canadian labour relations statutes, provides for arbitration on a first agreement when the conventional bargaining process fails. This has been an option that many unions have used to salvage contracts that would otherwise have been defeated by hard bargaining on the part of employers. And third, there are numerous instances, especially in the construction industry, of the parties voluntarily adopting arbitration. Indeed, this trend is now quite strong. In short, I think it is difficult to argue that compulsory arbitration, as it is practised in Canada, fundamentally prejudices the interests of working people.

The second principled question is whether reliance on arbitration degrades the bargaining process. There is evidence to support this claim, although I think the conclusions may be overstated. The authors of these studies rely almost exclusively on health sector bargaining which may be subject to some unrecognized factors that are unique to the health sector. In any event, as far as the TTC goes, bargaining has for sometime been conducted in the expectation that the Legislature would end any prolonged strike. In other words, whatever degradation of the bargaining process is likely to arise from compulsory arbitration is already likely to be evident. As one who was involved in the last arbitration, this was apparent to me. So as far as the TTC goes, our situation is that we are already paying the ‘cost’ of compulsory arbitration in the form of a degraded bargaining relationship and probably the other labour relations effects documented by Bob Hebdon, but as a community, we are not getting any of the stability benefits that might ensue from a formalized system of compulsory arbitration.

In my view, the most desirable arrangement would be a framework agreement in which the TTC and the City agreed to arbitration for the next three contracts. A framework agreement of this type governed the fire protection sector in Ontario for many years until the Harris government formally imposed compulsory arbitration on that sector.

Thanks John.  Very insightful, as always.


2 Responses to O’Grady on the TTC and Interest Arbitration

  1. ADHR Reply

    February 27, 2010 at 11:45 am

    One of the central problems with O’Grady’s argument, though, is that it assumes the only interests working people have is in a beneficial contract. It doesn’t address the possibility that working people are also interested in negotiating their own contracts per se, without the intervention of a third-party, regardless of whether this leaves them with fewer gains (financial or otherwise). The relevance to transit comes when one notices — as I did a few months ago — that one of the Amalgamated Transit Union’s logos includes the slogan “freedom through organization”. (Largest online version I could find is here: Might take some zooming to read it.)

    If that’s not an important interest, then I have to wonder why anyone is allowed to bargain their contracts at all, in any sector, public or private, unionized or not. After all, the argument should be universalizable — at least, I don’t see why it wouldn’t be.

  2. charlie Reply

    March 9, 2010 at 1:22 pm

    I think ADHR is brought up a good point- why treat the TTC differently than other. What is next – autoworkers at GM- when they strike it can have a major effect on the economy.

    But also I have experience with arbitration in health care and I don’t think it is really any different than other parts of the public sectors. That said interest arbitration has harmed labour relations. Parties often don’t try to bargain since someone else will make the hard decisions for them. Your stragety is not how to convince, bargain or pressure the other side to agree to your proposal but instead what is the jurispudence saying and what will the arbitrator will decide on the basis of the criteria they must decide under.

    And for workers the criteria can be dangerous since they must put their faith in governments and legislation. Not a good thing to do right now. The criteria that arbitrators use which is fair and currenty being used but what happens when someone wants to change it. Remember Mike Haris when he wanted to use retired judges. For labour in the long run it is better to rely on its strongest weapeon – the strike . It is messy and hard but it will be more reliable than relying on politics.

    Finally on a more pratical issue, interest arbitration is taking longer, at least in health care in Ontario. It take literaly years for an award to come down and this is usually have months or years of bargaining. More issues are coming to the table since there less and less reason to settle and arbitrators are not rushing to do interest arbs since it takes time away from their rights arb. Also neither party is very happy with the resulting award which could mean the parties will not use them again. The end result is both management and union on tetherhooks for years awaiting an award, unable to make decisions on budgets, institutional or pesonal or even to begin the next round of bargaining.
    That is not stable labour relations to me.

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