Report in which the committee requests to be kept informed of development - Report No 318, November 1999

Case No 1999 (Canada) - Complaint date: 15-DEC-98 - Closed

Allegations: Back-to-work legislation; obstacles to collective bargaining (energy sector)

1. 119. In a communication dated 15 December 1998, the Canadian Labour Congress (CLC) presented a complaint against the Government of Canada (Saskatchewan) for violation of freedom of association. The International Confederation of Free Trade Unions (ICFTU) associated itself with the complaint by letter of 21 December 1998.
2. 120. In response to these allegations the federal Government forwarded the reply of the Government of Saskatchewan by letter of 13 April 1999.
3. 121. Canada has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). It has not ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Labour Relations (Public Service) Convention, 1978 (No. 151), or the Collective Bargaining Convention, 1981 (No. 154).

A. The complainant's allegations

1. 122. The complaint relates to the Maintenance of Saskatchewan Power Corporation's Operations Act, 1998 (Bill No. 65), which put an end to an industrial dispute taking place in this Crown Corporation; the text also extended the expired collective agreement, it imposed new wage rates and took away the right to strike or lockout.
   • The facts of the case
2. 123. The International Brotherhood of Electrical Workers (IBEW), Local 2067, which is affiliated to the Canadian Labour Congress (CLC), represents 1,130 workers at the Saskatchewan Power Corporation (SaskPower). All of these workers are covered by the Trade Union Act which makes explicit provision for their right to organize and bargain collectively.
3. 124. For the purposes of the Trade Union Act, IBEW has been the exclusive bargaining agent for the electrical employees of SaskPower since 9 June 1966.
4. 125. The last collective agreement signed by the trade union and the Crown Corporation covered the period from 1 January 1995 to 31 December 1997. On 3 November 1997, IBEW gave SaskPower timely notice to commence collective bargaining. The parties subsequently met on numerous occasions and tentatively concluded a Memorandum of Agreement in early 1998; however, the SaskPower Board of Directors refused to endorse the Memorandum and, in August 1998, the bargaining process on all of the issues under dispute had to start over again.
5. 126. The complainant alleges that, since the commencement of the second bargaining round, the SaskPower representatives maintained that they were bound by government wage guidelines for public sector bargaining. IBEW proposed that both sides agree to submit the issue of wages to a board of arbitration; neither SaskPower nor the Government agreed to this proposal.
6. 127. The complainant states that negotiations subsequently reached an impasse; on 24 September 1998, IBEW and SaskPower exchanged strike and lockout notices, both effective as of 26 September 1998. Upon issue of the strike notice, the union withdrew all non-emergency overtime, call-out and standby services.
7. 128. The complainant indicates that, on 5 October 1998, the employer put the announced lockout into effect; some 652 IBEW workers were affected. Management employees operated the power stations on a functional basis. Nevertheless, the transmission and distribution side of the company was unaffected.
8. 129. The complainant recalls that, between 10 and 12 October 1998, a major snowstorm hit Saskatchewan. In such exceptional conditions, IBEW agreed to cooperate fully with SaskPower; its members worked extended hours over that weekend and the week following in order to ensure that no resident of Saskatchewan was harmed as a result of power outages during the storm. Although IBEW members expressed their will to return to work at the power plants, SaskPower refused to lift the lockout.
9. 130. The complainant points out that on 15 October 1998, the Government of Saskatchewan gave IBEW a 24-hour deadline to withdraw its strike notice and commit to return to normal operations. Moreover, the Government informed IBEW that it had to agree to the wage increases proposed. IBEW considered this situation unacceptable.
10. 131. It was in these circumstances that the Saskatchewan Legislative Assembly convened on 19 October 1998 and, the same day, passed the Maintenance of Saskatchewan Power Corporation's Operations Act, 1998 (Bill No. 65). This Act came into force immediately. IBEW members were obliged to return to work the following day.
    • Contents of the Act
11. 132. The complainant emphasizes that Bill No. 65 extends the former collective agreement signed between IBEW and SaskPower for a further period of three years, thus expiring on 31 December 2000. Furthermore, Bill No. 65 makes provision for 2 per cent annual wage increases over three years and, if the parties reach an agreement, a 1 per cent increase in benefits.
12. 133. Under the terms of section 8 of Bill No. 65, the union is not entitled to declare a strike during the period of extension of the collective agreement. In the event of failure to comply, provision is made for a fine of not more than $2,000 for each day during which the offence continues.
13. 134. The complainant stresses that Bill No. 65 takes away the rights and privileges protected by the Trade Union Act. IBEW was not entitled to bargain collectively; it was also prohibited from taking any action to promote or defend its members' rights or interests. The Government replaced free collective bargaining by unilateral legislative action to impose the terms and conditions of employment of the workers concerned. The complainant asserts that the Government thereby violated the principles of freedom of association and in particular the provisions of Conventions Nos. 87, 98, 151 and 154.
14. 135. The complainant stresses that the back-to-work legislation was adopted following lockout measures affecting more than half of the employees in the bargaining unit. At no time did the union put the safety of the public in jeopardy. Consequently, the complainant submits that, in the case in point, the necessary conditions to justify recourse to legislative measures had not been met; and that the employer alone, and not the workers, was responsible for any alleged hardship.
15. 136. Finally, the complainant stresses that the Government did not take the necessary measures to find a solution to the dispute between the parties; even IBEW's proposal to submit the dispute to a board of arbitration was rejected. The Government preferred to resort to back-to-work legislation with wage increases corresponding to the guidelines set for public sector wage rates.
16. 137. In conclusion, the complainant emphasizes that the Government made no real attempt to settle the dispute through bona fide negotiation but preferred to resort to the unilateral imposition of legislative measures. The complainant states that it is entirely unacceptable to proceed in this way, given the Government's commitment to respect and have recourse to free collective bargaining.

B. The Government's reply

1. 138. The Government begins by acknowledging the importance of free collective bargaining and reiterating its support for this fundamental principle. Furthermore, the Government recalls that this right is enshrined in the Trade Union Act.
2. 139. In addition, the Government indicates that the majority of workers covered by the laws adopted by the provincial Legislative Assembly have the right to strike. However, it recalls that, in the case of workers providing essential services, this right may be restricted, even withdrawn.
3. 140. It was in this context that the Government of Saskatchewan passed Bill No. 65; by taking this step as a last resort, the Government wished to end an industrial dispute which, due to the disruptions of the electrical supply that it would involve during the winter season, had the potential to cause serious hardship to the residents of Saskatchewan; hence, the Government believes that it acted to protect the general public.
4. 141. The Government also recalls the facts behind the complaint: the collective agreement between SaskPower and IBEW expired on 31 December 1997. It states that, between November 1997 and April 1998, when a Memorandum of Agreement was tentatively signed, more than 37 bargaining sessions had been held between the parties.
5. 142. The Government also points out that, on 22 April 1998, the SaskPower Board of Directors informed IBEW that the tentative agreement could not be endorsed because the negotiated wage amounts exceeded the relevant public sector guidelines. The Government indicates that these guidelines were implemented with a view to respecting its commitment to fiscal stabilization and a balanced provincial budget. In the early 1990s, the Government resolved to reduce the large debt that had accumulated during the 1980s and implemented various measures to that end.
6. 143. The Government states that the SaskPower Board of Directors wished to reopen negotiations with a view to complying with the guidelines set for public sector wages. Although IBEW members had voted in favour of strike action, bargaining sessions were held in May and June 1998. Mediators also took part in these meetings, but no agreement was reached.
7. 144. The Government specifies that, in August 1998, IBEW suggested that the wage issue be submitted to arbitration whilst warning that, if arbitration was not agreed to before 26 September, IBEW would commence strike action. In this context, IBEW, on 24 September, announced that it had provided strike notice in the form required by provincial legislation and immediately withdrew all non-emergency overtime, call-out and standby services.
8. 145. The Government adds that, on 30 September 1998, SaskPower tabled a settlement offer which would expire on 15 October. However, IBEW responded that a vote on the offer would not be taken by its members before 26 October. In these circumstances, SaskPower locked out IBEW power station employees on 5 October.
9. 146. The Government also recalls that a snowstorm hit the province on the weekend of 10 October 1998. Though the Government recognizes that union members responded, under these exceptional circumstances, to SaskPower's requests to restore power, the Government states that it was at this point that it realized the high risk to which Saskatchewan residents were being exposed in the event of power outages during the winter period. Given the importance of this service, the provincial Premier appealed to the parties on 15 October 1998 to settle their dispute. Unfortunately, they did not succeed in achieving an agreement.
10. 147. Consequently, the Government was obliged to resort to legislative measures; Bill No. 65 was adopted and brought into force on 19 October 1998. The Government recalls that Bill No. 65 was designed to put an end to all work stoppages including the lockout, to extend the collective agreement for a period of three years and implement the public sector wage guidelines in SaskPower, with provision being made for an annual wage increase of 2 per cent over three years; it also allowed the parties to agree on an additional 1 per cent increase in benefits.
11. 148. The Government emphasizes that the use of back-to-work legislation is an exceptional measure. In the case in point, the Government claims that it was placed in a situation which constituted a threat to the welfare of Saskatchewan residents. The Government intended to provide for safeguards to ensure that the people of Saskatchewan did not suffer disruptions in the electrical service. The Government maintains that it had weighed the interests of labour relations between SaskPower and IBEW, on the one hand, and, on the other, those of the Saskatchewan population at large. The public interest prevailed and ultimately compelled the Government to take action.
12. 149. The Government explains that it passed Bill No. 65 to avert a crisis. At the time of the Bill's adoption, no maintenance was being conducted on the electricity supply infrastructure and the Government feared that other power outages would endanger public safety and disrupt social and economic operations. It was also evident that the negotiations were at a standstill and that the Government could not risk an escalation in industrial action during the harsh autumn and winter months.
13. 150. The Government supplies some information relating to SaskPower, which reflects its importance as a producer and supplier of electricity for the entire province. More than 1 million residents rely on electrical energy, particularly during the harsh winter months when hours of sunlight are reduced and temperatures frequently fall to -30oC or -40oC. Consequently, electricity is vital to the economic infrastructure of the province, given that it is the main source of energy used in homes, hospitals, schools, institutions and industry. The population is immediately affected by any power failure, particularly in winter, because adequate alternate energy sources do not exist. Therefore, repairs and maintenance of power lines are critical to ensuring an adequate supply of electricity to Saskatchewan residents.
14. 151. The Government submits that Bill No. 65 was the only measure it could resort to after ten months of negotiations which failed to lead to an agreement. Although the Government is disinclined to adopt such legislation, the well-being and safety of the population of Saskatchewan prompted it to do so. Despite the fact that Bill No. 65 extends the former collective agreement for an additional period of three years, the Government considers that this measure is compatible with the principles of freedom of association, which imply that the public authorities may intervene when justified on grounds of social justice and in the public interest. The Government believes that this was so in the present case. Although these measures were imposed in the form of legislation, IBEW members' living standards were maintained by the wage increases envisaged. Bill No. 65 also makes provision for full remuneration of workers who were locked out.
15. 152. Furthermore, the Government explains that it had already advised IBEW that it could not turn to arbitration to settle the industrial dispute. In the Government's assessment, there was a high risk that arbitration would result in the imposition of a wage increase that would not respect the guidelines already set; this would create a precedent which could, subsequently, be invoked by other trade unions.
16. 153. The Government also acknowledges that Bill No. 65 was passed quickly and without consultation. However, it was apparent that the Bill would be controversial and that its speedy passage was critical. The Government believed that the growing risk to the public justified legislation being passed urgently.
17. 154. In conclusion, the Government recalls that the ten months of negotiations held between SaskPower and IBEW had failed to result in an agreement. The Government stresses that it does not generally restrict the trade union rights of workers involved in essential services. However, when industrial disputes involve a threat to public safety, it is the Government's duty to act expeditiously in the general interest.
18. 155. Hence, the Government requests the Committee to consider the extenuating circumstances that prompted the authorities to pass Bill No. 65 and to conclude that the Bill was an exceptional measure, the Government having done all it possibly could to avoid intervention in the free negotiation of the relevant working conditions. The Government emphasizes that Bill No. 65 is limited to what is essential and is designed to ensure that electricity services are maintained as well as the relevant workers' ability to uphold their living standards. Finally, the Government considers that the period of validity of Bill No. 65 is reasonable: as of 31 December 2000, SaskPower and IBEW will be able to resume their free bargaining on a collective agreement.

C. The Committee's conclusions

1. 156. This case relates to the adoption by the Government of the Province of Saskatchewan of the Maintenance of Saskatchewan Power Corporation's Operations Act, 1998 (Bill No. 65), which ordered a return to work in that Corporation; it extended the former collective agreement by a period of three years and determined wage increases. Any strike action or lockout is prohibited during this three-year period.
2. 157. The Committee observes that the complainant and the Government appear to concur in general in their description of the events which resulted in the adoption of Bill No. 65 and which may be summarized as follows.
3. 158. The International Brotherhood of Electrical Workers (IBEW), Local 2067, has, since 1966, been the agent certified to engage in collective bargaining and conclude any agreement with the employer, the Saskatchewan Power Corporation (SaskPower). IBEW and SaskPower signed a collective agreement on 1 January 1995, which expired on 31 December 1997. In November 1997, the parties, in accordance with the appropriate law, entered into the collective bargaining process with a view to concluding a new agreement; moreover, the parties signed a tentative Memorandum of Agreement in early 1998, which was not endorsed by the SaskPower Board of Directors. In justifying its rejection, SaskPower maintained that the negotiated wage increases exceeded the guidelines set by the Government in respect of public sector wages.
4. 159. SaskPower and IBEW resumed talks on all of the issues in the summer of 1998. They agreed that, despite several meetings, the negotiations came to a standstill in September 1998. On 24 September, the parties served strike and lockout notices, both effective 48 hours later. Nevertheless, the trade union immediately withdrew all non-emergency overtime, call-out and standby services.
5. 160. On 5 October 1998, SaskPower locked out IBEW members working at power stations. This resulted in the disruption of certain services -- including maintenance of the energy supply infrastructure -- which could not be conducted by the power station management employees.
6. 161. All agreed upon the seriousness of the snowstorm that hit the province over the weekend of 10-12 October 1998 and highlighted IBEW members' cooperation in ensuring that provincial residents were not severely affected by the power outages which occurred in these conditions. Although the lockout remained in force, IBEW even reportedly suggested that its members return to work in the power stations; this offer was rejected by SaskPower.
7. 162. Subsequently, the Government considered it necessary to put an end to this industrial dispute and, above all, to protect the public interest and safety.
8. 163. It was in this context that Bill No. 65 was adopted on 19 October 1998; in the Government's own words, it was passed quickly and without consultation.
9. 164. Bill No. 65, section 3, stipulates that any work stoppage caused either by the workers or the employer shall cease immediately. The text extends the period of validity of the collective agreement signed in 1995 up to 31 December 2000 and lays down the wage rates for the employees concerned, i.e. an annual 2 per cent wage increase over three years (6 per cent) and 1 per cent in respect of benefits (section 7). Throughout the period for which the collective agreement has been extended, all strikes and lockouts are prohibited (section 8). Any person contravening the Bill's provisions may be ordered to pay substantial fines (section 9).
10. 165. No one appears to challenge the fact that the service supplied by SaskPower, i.e. the generation and distribution of electricity, the main source of energy available in the province, is an essential service in the strict sense; its disruption would put the life, personal safety or health of the whole or part of the population in jeopardy. The Committee recalls that, in previous cases, it has already considered electricity services to be an essential service (see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 544).
11. 166. However, the Committee is bound to recall that, in the case of essential services, interruptions of which may be restricted or prohibited by the public authorities, it is important that, in keeping with the principles of freedom of association, the persons concerned are granted adequate protection to compensate for the limitation thereby placed on their freedom of action with regard to disputes affecting such undertakings and services (see Digest, op. cit., para. 546). This may take the form of adequate, impartial and speedy conciliation and arbitration proceedings in which the parties concerned can take part at every stage and in which the awards, once made, are fully and promptly implemented (see Digest, op. cit., para. 547).
12. 167. In this instance, the Committee observes that the industrial relations system in the Province of Saskatchewan does not appear to offer such guarantees. The Committee also notes that the relevant trade union suggested resorting to arbitration but that this proposal was declined by the employer. The Government believed that it was only by unilaterally passing legislation that it would be in a position to respect government guidelines regarding public sector wage bargaining.
13. 168. The issue of public sector collective bargaining has, on several occasions, attracted the attention of the Committee which stresses that it is aware of the special nature of the process. With reference to the statements of the Committee of Experts on the Application of Conventions and Recommendations, the Committee has emphasized that collective bargaining in the public sector "calls for verification of the available resources in the various public bodies or undertakings, that such resources are dependent on state budgets and that the period of duration of collective agreements in the public sector does not always coincide with the duration of the budgetary laws -- a situation which can give rise to difficulties". Thus, in the view of the Committee and of the Committee of Experts on the Application of Conventions and Recommendations, legislative provisions which allow Parliament or the competent budgetary authority to set upper and lower limits for wage negotiations or to establish an overall "budgetary package" within which the parties may negotiate terms and conditions of employment clauses are compatible with the principles of freedom of association (see Digest, op. cit., para. 899). However, the Committee stresses that, in this process, workers and their organizations must be fully consulted in designing this overall bargaining framework, which implies in particular that they must have access to all the financial, budgetary and other data enabling them to assess the situation on the basis of the facts.
14. 169. The Committee considers that if such conditions had been observed in the present case, i.e. that upper and lower limits or a "budgetary package" had been established in consultation with the workers concerned and their organizations, the hesitation of the Government with regard to arbitration would have been reduced, even to nought. Compliance with such a procedure guaranteeing transparency and prior consultation of the workers concerned and their organizations would have enabled the Government to avoid resorting to hasty legislation which can only prove to be an obstacle in the establishment of sound industrial relations. Thus, the Committee requests the Government to explore this possibility in future, in consultation with the parties concerned, and to keep it informed in this respect.
15. 170. In any event, the Committee deplores the fact that the Government passed Bill No. 65 so quickly and without holding the appropriate consultations with the parties concerned prior to its adoption and asks the Government to bring that legislation into conformity with freedom of association principles.

The Committee's recommendations

1. 171. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) Deploring the fact that the Government passed Bill No. 65 so quickly and without consultation and considering that in the present case if upper and lower limits or a "budgetary package" had been established in consultation with the workers concerned and their organizations, the hesitation of the Government with regard to arbitration would have been reduced, even removed, the Committee requests the Government to explore this possibility in future, in consultation with the parties concerned, and to keep it informed in this respect.
   • (b) The Committee requests the Government to bring Bill No. 65 into conformity with freedom of association principles.