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Would American Style “Right to Free Ride” Laws Violate the Canadian Charter?

There’s a huge battle underway in Michigan today, as Republicans aim to introduce a law that would prohibit contract terms that require all employees in a bargaining unit to pay union dues, even if they are not union members.  Here is a New York Times article explaining the issue and the huge protests.

Michigan Posed to Pass "Right to Work" Law

Americans call these ‘Right to Work” laws, but that is just Republican party propaganda.  The law has nothing to do with a right to work.  Lord knows that the Republicans would be the last people who would support an actual ‘right to a job’.  The so-called “right to work” laws deal with the question of whether employees who receive the protection and benefits bargained by a union should get those representation rights for free, rather than pay their fair share of the costs of providing those services. A more accurate moniker is “Right to Free Ride” [RTFR] off the work of the union and the union members, since that is what the laws do: they allow workers to benefit from the work of the union without paying their fair share towards the cost of providing those benefits.

The main objective of  ‘right to free ride’ laws is to cut off union finances.  Since it is human nature and economically rational to not pay for something that you can get for free, the expectation is that many employees will simply stop paying union dues.  If unions have no money, they will be enfeebled and therefore less attractive to workers, and, importantly, less able to participate in political debates and campaigns.  It’s always Republicans and, in Canada, Conservatives pushing for these laws because the labour movement hardly ever supports these parties come election time.  Supporters of RTFR laws hope to silence the political voice of the labour movement.  That’s why President Obama is correct when he says that these laws are all about politics and not economics.

 In the U.S., the evidence does not support Republican claims that RTFR  laws improve the conditions for workers. Wages and benefits in non-RTFR states are higher, as is family income, while states with RTFR laws dominant the list of states with the lowest per capita family income.  Is this because of the RTFR laws?  That’s the problem with all the nonsense politicians through about in these debates.  The reality is that it’s impossible to isolate a direct causal link between a law governing union dues collection and complex economic factors.  Independent scholars freely acknowledge this.  Yet the Republicans and anti-union groups, and now the Conservative party in Canada, do so all the time.  Hudak would have you believe that passing a RTFR law in Ontario is the magic pill that will create thousands of new manufacturing jobs.  That’s ridiculous, as I have explained before.   

Nobody knows what a ‘right to free ride’ law in Canada would do.  No Canadian government, not even Mike Harris, ever proposed bringing Southern U.S. style labor law to Canada.  In the U.S., scholars are uncertain what percentage of unionized workers actually stop paying dues when a right to work law is introduced, though  stats shows that union membership and collective agreement coverage levels are very similar there as in Canada.  This suggests that most people covered by collective agreements in the RTFR states continue to join the union and presumably pay their dues.  My guess is that Canadians will be less likely than Americans to free ride off of their coworkers, since there has always been a more collective mentality here.  Let’s face it, it’s pretty sleazy to accept the higher pay, better benefits, and stronger pension plans that we know empirically that unions achieve for workers, and yet not even pay the small amount of tax deductible union dues that your coworkers are paying the union’s professionals for bargaining those improvements.  It’s ‘unCanadian’ to free load off of other people’s efforts, and my guess is the most Canadian workers will continue to pay the small amount of money that unions ask for even if they are not legally required to do so.  But no one really knows.

Would “Right to Free Ride” Laws Violate Section 2(d) of the Charter [Freedom of Association]?

Tim Hudak and the Ontario Conservative Party, our own radical version of the American Republican Party, have threatened to bring American style right to free ride laws to Ontario.  Could he do that?  Fun question for labour law students.

Note firstly that the rules are different here.  A motion to add collective bargaining to the Michigan Constitution was voted down in the last election, but had it succeeded, the belief was that it would have prevented the government from enacting a “right to work” law.  Unlike in the U.S., we already have a Constitutional right to collective bargaining. That changes the game.

Now pay attention to how the law on union dues actually works in Ontario.  Hudak is misleading you.  There is no

Is Hudak's Plan for Right to Work Law in Ontario Unconstitutional?

law that requires workers to be union members or to pay union dues, although Hudak keeps suggesting otherwise.  The source of the obligation to pay unions dues is the collective agreement, not a statute. 

How does a requirement to pay union dues make it into a collective agreement?  The same way the other terms of the collective agreement make it in:  a majority of the employees in the bargaining unit voted for it to be included. Just like terms governing wages, vacation pay, health and dental benefits, seniority, discipline, and so on.  There will always be employees who are unhappy about this clause or that clause, but that is the nature of having an agreement that covers a lot of people.  The fact remains, if a majority of employees don’t want a mandatory union dues clause in Ontario, they can tell their union not to bargain one.  If the union leadership refuses, then the employees can refuse to ratify the agreement until changes are made.  Or they can decertify the union.

There is one difference relating to union dues.  Section 47 of the Labour Relations Act says that an employer cannot force a strike or lockout about union dues, whereas it can in relation to most other collective agreement terms.  That’s there because we used to have lots of nasty strikes caused by employers who didn’t want to collect union dues.  Section 47 is the ‘Rand Formula’.  It’s purpose was to stop strikes, and to ensure that unions have the resources to perform their functions.  It does both very well.  But it doesn’t require mandatory union dues.  Only a majority of employees can require that, by ratifying a collective agreement that includes a dues clause.  Section 47 simply says that it is up to employees to decide if they want to pay dues, a decision made by the democractic process of majority rules.

Interestingly, Hudak says he wants to make unions more ‘democratic’ by requiring more government supervised majority union votes.  So he likes the “majority rules” idea. Except when the majority votes for mandatory union dues.  At that point, worker democracy is no longer acceptable.  Kind of like when Americans say they would like democratic votes in Afganistan, but only if people vote for policies the American politicians support.

Hudak could probably repeal Section 47 without a Charter issue.  But doing that would only reintroduce nasty strikes and lockouts over union dues of the sort we had in the 1930s and 1940s.  So Hudak will have to go about his master plan differently.  He will have to ban union from bargaining union dues checkoff clauses altogether. That means a legislative prohibition on collective bargaining, and hence the Charter is engaged.  I don’t know what his plan is, so imagine the Tories introduce a section into the Labour Relations Act that says what Hudak has been saying he will do. Like this:

No collective agreement or contract  shall include a term requiring an employee to pay union dues as a condition of employment, and no employer shall deduct union dues directly from an employee’s wages.

That’s roughly what American ‘right to work’ laws say.  Does anyone see a Charter problem with this section?

This section represents a government prohibition on collective bargaining over a specific issue or contract term:  the payment and collection of union dues.  This isn’t some minor point.  It is a direct government attact on the very financial survival of unions and their ability to engage in collective bargaining.  The section says that employees cannot even attempt to bargain a union dues remittance term into their agreement, even if the vast majority of employees think that all employees should contribute equally to the costs of administrating their union.

The test for assessing if a law impinges upon collective bargaining rights, according to the Supreme Court, is whether the law ‘substantially interferes’ with the ability of employees, unions, and employers to engage in meaningful collective bargaining over matters central to collective bargaining.  In B.C. Health Services, a law prohibiting certain types of collective agreement terms (layoffs, contracting out, bumping rights) was struck down, applying this test.   The SCC said this about that law:

The necessary implication of the Act is that prohibited matters cannot be adopted into a valid collective agreement, with the result that the process of collective bargaining becomes meaningless with respect to them.  This constitutes interference with collective bargaining.

The purpose or result of a ‘right to free ride’ law is to render meaningless any collective bargaining relating to union dues collection.  It renders impossible (to use the language from Fraser) the ability of the parties to engage in a meaningful process of collective bargaining over union dues payment and collection.  This is a BC Health-type case involving a direct frontal attack on the right to collectively bargain about central issues, not the more difficult type of case like Fraser, in which workers sought to extend a particular model to an excluded group of workers.  If the SCC follows its own ruling in BC Health, I think a right to free ride law would be found to biolate s. 2(d).  But that’s also a big ‘if’, since the SCC has been unpredictable on s. 2(d) to say the least.  It could also bypass it’s reasoning in BC Health and say banning bargaining over union dues is not interference in collective bargaining in the same way banning bargaining over seniority rights was in B.C Health, but is instead just eliminating one feature of a particular labour law model based in the Rand Formula idea that the law should address the free rider problem by permitting union dues checkoff clauses.

As I explain in my Beginner’s Guide to the Charter and the Law of Work, if a ‘right to free ride’ law violated Section 2(d), then it could only survive if it is saved by Section 1 of the Charter.  Section 1 essentially allows violations of fundamental freedoms when the benefit from the infringement outweighs the harm.  This would be an interesting argument.

I presume the government’s argument would be that banning mandatory union dues clauses is necessary to protect individual employees from making payments to an organization that they do not wish to support.  Mandatory dues clauses take away some individual freedom of choice.  This is similar to what Lavigne argued back in 1991, when he lost his challenge to a mandatory union dues clause in Lavigne v. OPSEU.  The SCC upheld a mandatory union dues clause because it enabled unions to perform the valuable services they were intended to perform.  An opting out of union dues model would seriously undermine the financial viability of unions, the Court concluded.  Moreover, a majority of the Court ruled that a worker’s freedom of expression is not impinged by having to pay union dues, since the worker is still free to express whatever they like, whether or not the union takes a different view.  It’s just money, not a pledge of alligiance.

Lavigne was challenging a rule requiring mandatory dues.  In our scenario, the state would have to justify its ban on allowing unions and employers to bargain about union dues collection at all.  The B.C. government’s Section 1 argument that the legislative ban on collective agreement terms was necessary to address a pressing financial emergency in the medical sector failed.

QUESTIONS FOR DISCUSSION

Do you think that an Ontario government that banned bargaining over union dues would have a stronger argument?

Do you think that a law banning collective bargaining over union dues would violate Section 2(d)?

Do you agree with the government ordering unions to represent workers who do not pay dues to the same level as those workers who do pay dues?

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13 Responses to Would American Style “Right to Free Ride” Laws Violate the Canadian Charter?

  1. Chris Davidson Reply

    December 11, 2012 at 5:45 pm

    I have a different question. Is there a way around this type of anti-union legislation? Admittedly I haven’t done any research on this myself, but maybe someone knows the answer. If the law prohibits any contract terms requiring employees in a bargaining unit to pay union dues, why can’t unions simply negotiate another “benefit” for employees, a type of litigation/represenation insurance? The employer would make payments to the union to provide services for the employees; the amount could be calculated by the union as a ‘premium’ per employee or just a global, lump-sum amount every year. Another idea would be to negotiate a term that says that full-time union representatives elected from the workplace (so they wouldn’t be in the workplace anymore) will be paid regular salary and benefits by the employer as if they were still performing their regular jobs (I understand that at least some collective agreements in South Africa do this). Now, I understand these may not be ideal ways to secure funding for unions, but my question is simply could these things be done to circumvent the anti-union restrictions conservatives are legislating?

  2. Rob Reply

    December 12, 2012 at 4:09 am

    “It may be argued that it is unjust to compel non-members of a union to contribute to funds over the expenditure of which they have no direct voice; and even that it is dangerous to place such money power in the control of an unregistered union. But the dues are only those which members are satisfied to pay for substantially the same benefits, and as any employee can join the union and still retain his independence in employment, I see no serious objection in this circumstance. The argument is really one for a weak union.” – Justice Ivan Rand, in Ford Motor Co. of Canada v. UAW-CIO (1946)

    “To constitute substantial interference with freedom of association, the intent or effect must seriously undercut or undermine the activity of workers joining together to pursue the common goals of negotiating workplace conditions and terms of employment with their employer that we call collective bargaining. Laws or actions that can be characterized as “union breaking” clearly meet this requirement.” – Chief Justice of the Supreme Court of Canada, Beverly Mclachlin, in BC Health Services (2007), para. 92

    Given that Rand’s arbitration award (which has received positive treatment at the SCC) suggests that the argument against dues check off is really one against unions in general, and the SCC’s later dictates that “union breaking” laws are unconstitutional, I think there is a really strong case against any such legislation.

  3. Doorey Reply

    December 12, 2012 at 10:46 am

    Chris, I agree that under our current DFR laws, there would be room to manoeuvre, but we’d have to see the details of the law. If s. 74 remained unchanged, then I suspect it would be fine for a union to bargain benefits that only apply to workers who pay for them, since this would be a rational, non-bad faith decision. For example, you only get a lawyer in an arbitration if you have paid ‘insurance’ to the union for that service, etc. I could see that arrangement being upheld under s. 74 as the law stands now. But since the purpose of RTW laws is to force unions to provide free professional services to everyone, I’d expect the DFR rules to be changed too.

  4. Jody Reply

    December 12, 2012 at 9:03 pm

    I’m not a student, I’m an interested visitor. If it’s not OK for me to post here, please email and let me know.
    OK, here’s a question. Students, you can think of this as practice for advising your future clients if you wish :) Suppose it becomes illegal for union dues to be deducted from pay. Could unions choose to offer their protection and services only to those who choose to pay dues agreed upon by a membership vote (i.e. workers could choose to be dues-paying members or non-members, but not members for free)? What would then happen to workers in the workplace who were no longer covered under the union?

    • Doorey Reply

      December 13, 2012 at 11:28 am

      Jody, yes I think a union could offer benefits only to workers who become members or pay dues, but it would depend on what a new law said about this. It’s hard to imagine how a law that prohibited unions from doing that would withstand Charter scrutiny. In fact, I think a right to work law in Canada is very likely to be a violation of the Charter, since it would require a legislative ban on collective bargaining about a fundamental aspect of management-union relations.

  5. Kath Reply

    December 14, 2012 at 12:54 pm

    Would the right to penalize union members who did not participate in a strike also flow from the collective agreement?

    • Doorey Reply

      December 14, 2012 at 1:44 pm

      Kath, no, that right flows from the union’s constitution, which every union member agrees to when they become a member. The constitution is like a contract between the union and it’s members.

  6. Karen Reply

    December 27, 2012 at 1:28 pm

    Thanks for the article. I found it fascinating. I’m not a law student but I’m a teacher in Ontario and I found it interesting both as a unionized member who is horrified by this “right to a free ride” concept, and also as a citizen who is intrigued by constitutional law and the Charter in particular. I took a couple law courses back in highschool and loved them. I enjoyed reading all of the different possible ways in which Hudak may try to get around the constitutional and contractual obstacles in his way. I also did not realize that it is our contract that has the dues in it which he would have to change, not legislative law itself. Thanks again!

  7. Marc Opie Reply

    December 27, 2012 at 10:07 pm

    If the SCC has ruled that section 47 does not protect a bargaining model (and as far as I can tell, the only type of models that 47 addresses are of the ‘the employer collects enforced union dues’ variety), and is thus repealable, then how can a law which attempts to remove a right asserted in section 47, be deemed a violation of the charter. Perhaps my understanding of what 47 asserts, and what the hypothetically proposed legislation would attemt to deny (I think they are the same), is flawed.

  8. Doorey Reply

    December 29, 2012 at 10:15 am

    Marc, it is not s. 47 that violates the Charter. The question is whether a new law that prohibits unions, employees, and employers from bargaining a union dues checkoff clause interferes with the right to bargain about such terms.

  9. Marc Opie Reply

    December 29, 2012 at 12:48 pm

    Doorey. I agree, 47 does not violate the charter. My argument doesn’t rest on its constitutionality, it rests on the constitutionality of its removal. Given that 47 asserts the right to impose mandatory union dues, collectable by the employer, and given that section 47 is repealable (i.e. it’s removal is not a violation of the charter), how is it possible that a hypothetically proposed law which seeks to remove the right to impose mandatory union dues collectable by the employer, a right, the removal of which been ruled to not ‘substantially interfer’ with collective bargaining, substantially interfer with collective bargaining.

    In otherwords, I’m making the claim that enacting hpothetical new law is equivalent to removing section 47, since the new law asserts the opposite of section 47. If the removing section 47 is not a violation of the Charter, how can it’s equivalent, enacting the hypothetical legislation, be a violation.

    • Doorey Reply

      December 29, 2012 at 1:52 pm

      Thanks Marc. To be clear, I’m not saying the new law would violate the Charter. No one knows. But in BC Health, the SCC said quite clearly that a law that prohibits a union from bargaining over important collective agreement terms violates s 2(d) of the Charter. That is what a law banning bargaining about union dues would do, I have to presume. Therefore, the SCC would need to back away from BC Health to find that a legislative ban on bargaining over dues is valid. The court may indeed do that. It would just ignore what it said in BC Health, and instead say that bargaining a mandatory dues checkoff clause is part of the Wagner model, which is not protected. By treating union dues collection as ‘part of a particular model’ rather than as just an important subject of collective bargaining, the court can bypass everything it said in BC Health. If you are saying that s 47 restricts the range of an employer’s bargaining options right now, then perhaps you are right. However, s 47 addresses a pressing problem–stopping labour disputes over union security–so the section 1 defense of s 47 of the OLRA is strong, in my view. The Rand Formula is justifiable under s 1 of the Charter. I think the government would have a much harder time defending an outright ban on bargaining union dues collection under s 1, especially given the strong support the SCC gave union dues checkoff in Lavigne.

  10. Michele Reply

    January 23, 2013 at 1:39 am

    Hello! I found your article very interesting in light of the current unrest in education. I am a teacher and claim little understanding of the minutiae of labour law in Ontario. However, with recent events, I have been forced to ‘get educated’.

    2 Questions (again, not a student of law):

    1. What is to prevent a government from invoking a ‘Bill 115′, imposing a contract that removes the ‘dues’ clause, then repealing the Bill? Though it maybe challenged successfully over time, the damage will have been done and will likely be irreversible. This seems to be a beginning trend or maybe I have been blissfully ignorant until I was directly affected.

    2. If we did end up with a RTFR, could unions offer a buy-in to a negotiated contract for non-paying employees but not provide them with the extra services such as legal representation, insurance, or various other membership benefits? Is it possible to build a respectable union offering ‘flex’ benefits? Pay for this but not that.

    Thank you.

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