Kenney’s War on Workers

Contracts broken, wages cut and unions undermined.

By Bob Barnetson

My wife and I spent our last day of our summer vacations in 2019 on a picket line with healthcare workers at Edmonton’s old General Hospital. Most of the cleaners, healthcare aides and nurses at the information picket were women of colour. Like public-sector workers across the province, they were protesting the passage of Bill 9 by Alberta’s UCP government late last June.

Bill 9 (the Public Sector Wage Arbitration Deferral Act) broke contracts by suspending arbitrations about wage increases until at least the late fall of 2019. Delaying these arbitrations meant pushing off the first opportunity in several years for approximately 180,000 public-sector workers to receive cost-of-living wage increases. Workers—mostly women—who had seen the arbitrations as recompense for agreeing to a two-year wage freeze (2017–2019) felt betrayed.

The government asserted the delay was necessary so it could get a handle on the province’s finances. But despite characterizing Alberta’s fiscal state as “worse than expected,” the government simultaneously handed business owners approximately $4.5-billion in tax cuts over four years. Picket signs reading “Millions for corporations; crumbs for workers” noted this apparent hypocrisy.

Workers weren’t the only ones skeptical of the government’s supposed need for a delay. In August, Court of Queen’s Bench Justice Eric Macklin granted the Alberta Union of Provincial Employees (AUPE) an injunction, allowing arbitrations for 65,000 workers to go ahead. Macklin noted that “given the current highly publicized economic climate in Alberta, it is unclear what other information [the Government of Alberta] would be seeking on Alberta’s economy and financial state to support its position.” Macklin’s injunction was subsequently overturned in a split decision by the Court of Appeal.

Workers and their unions predicted that Bill 9 would be the first step towards legislated wage freezes or rollbacks when the Legislature resumed sitting in October. Rollbacks would certainly help the government pay for the giant tax break it gave employers. For public-sector workers and union activists, it’s hard not to see Bill 9 as the first shot in what’s quickly becoming a nasty scrap between Alberta’s unions and the government of Jason Kenney.

Bill 9 demonstrates that this government can’t be trusted to honour legally binding contracts.

Jason Kenney’s lengthy career in federal politics shows him consistently favouring the interests of employers over those of workers. The Harper government, in which Kenney was a senior cabinet minister, repeatedly intervened in work stoppages, in 2007 (CN Rail), 2011 (Canada Post) and 2012 (Air Canada and CP Rail), to the benefit of the employer. It also legislated a wage freeze for federal employees in 2009 (including overriding previously negotiated increases) and made union certification votes mandatory in 2014. Just before being defeated in 2015, Harper’s government required more onerous financial disclosure from unions.

Kenney also personally directed the expansion of the temporary foreign worker (TFW) program, which saw the number of TFWs in Alberta rise from 21,973 in 2006 to a high of 68,339 in 2012. Labour shortages were used to justify this surge, but subsequent analysis found little evidence of absolute labour shortages in most occupations. Rather, not enough Canadian workers were prepared to do the work given the low wages and poor working conditions on offer. By loosening the labour market, Kenney’s TFW program allowed employers to avoid increasing wages and improving working conditions for Canadians. The vulnerability of TFWs—whose residency is tied to a specific employer—meant many were subject to wage theft and other forms of exploitation.

Kenney was also responsible for overhauling federal labour market training funding and forcing his Canada Job Grant (CJG) program on provincial governments. The CJG gave employers the ability to spend $5,000 on training and get $10,000 in public funds. Kenney promised that this would incentivize employers to hire and train unemployed Canadians. After two years, however, only 1 per cent of CJG-funded trainees in Alberta were from the ranks of the unemployed. Instead, employers used the CJG to subsidize training for existing employees (mostly men already possessing a post-secondary credential). Subsidizing employer costs significantly reduced funding available to train unemployed Albertans.

The United Conservative Party 2019 provincial election platform (on which Kenney famously “held the pen”) promised similar changes, intended to “bring balance back to Alberta’s labour laws, restore workplace democracy and incentivize the creation of youth employment.”

The Kenney government wasted no time in moving against workers and their unions. Within a month of being elected, the government introduced Bill 2 (An Act to Make Alberta Open for Business). In combination with some regulatory changes, Bill 2 reduced the youth minimum wage, created an overtime pay loophole and made it harder for workers to join a union.

Effective June 26, 2019, the minimum wage for students under 18 dropped from $15 per hour to $13. This 13 per cent reduction was framed as a “job creation” incentive by the government. Awkwardly, no evidence exists that reducing the youth minimum wage increases hiring. Instead, lower youth minimum wages in Australia and Denmark have incentivized employers to reduce young workers’ hours and eventually sack them as they approach age 18 in order to minimize labour costs. Alberta abolished its youth wage in 1998 because employers were abusing it.

There’s also no evidence that Alberta needed such an incentive. The rate at which Alberta 15–24-year-olds participated in the labour force in 2018 (64.3 per cent) was slightly higher than the Canadian average (63.3 per cent). This wage reduction is really just a gift to employers. Annually, it transfers from workers to employers approximately $29-million in wages for every day per week worked by Alberta’s 35,000 employees under 18. Some employers are leaving pay levels as is because of the poor optics of grinding teens’ wages. For example, in Edmonton, the public library was embarrassed into reversing a planned reduction in wages for its youngest workers.

Bill 2 also opened a loophole in overtime regulations. Beginning in fall 2019, employers could pay overtime taken as time off at straight time rates, thereby evading the usual 50 per cent overtime premium. This doesn’t sound like a significant change until you do the math. If each of Alberta’s 412,000 workers who worked overtime (on average, 10 hours per week) were instead forced to take their OT as time off, this would transfer $63.5-million per week ($3.3-billion annually) from workers to employers.

Finally, Bill 2 requires that every union organizing drive include a vote. Previously, when a union could demonstrate that at least 65 per cent of workers had signed union cards, certification was automatic. Research shows that employers use the delay caused by mandatory votes to interfere (often illegally) with workers’ decisions about whether or not to unionize. For example, they may fire union supporters or threaten to close the business if the workers vote to unionize. Consequently, mandatory votes result in fewer organizing drives and a lower success rate.

Bill 2 was followed almost immediately by Bill 9, which interfered with already negotiated collective agreements. Most public-sector workers had agreed to a two-year wage freeze followed by further negotiations in 2019 (a “wage reopener”). This arrangement was widely viewed as unions agreeing to push off the question of wage increases in order to deny the UCP the opportunity to use public-sector increases as a weapon against the New Democrats in the 2019 election. These agreements included provisions that any impasse over the wage reopener would be resolved by an arbitrator (i.e., a neutral third party) with hard deadlines for a decision (e.g., June 30, 2019). These arbitration provisions gave the unions some comfort that—should the NDs lose the election—a fair process to decide on wage increases would still occur in year three.

Bill 9 suspended these arbitration hearings until Hallowe’en. The Kenney government said it needed a delay to receive the report of a “blue ribbon” financial review panel. The MacKinnon Report was released on September 3 and suggested setting, through legislation, a bargaining mandate to reduce public-sector compensation. The report’s authors also suggested that if negotiations resulted in work stoppages, the government use the mandate as the basis of back-to-work legislation. Further, if a legislated bargaining mandate were found by the courts to be unconstitutional (because, by predetermining the outcome, it rendered bargaining meaningless), the government could use the notwithstanding clause to override the Charter. These recommendations reinforced the initial belief of public-sector workers and their unions that Bill 9 was a stalling tactic so the government could enact a wage freeze or rollback in the late autumn. This delay would also mean any wage legislation would come after the federal election so as to reduce any political damage it might cause to federal conservative politicians.

The legislative debate over Bill 9 was raucous, with the government invoking closure and Premier Kenney being accused of handing out earplugs during an overnight debate, presumably so his MLAs didn’t have to listen to opposition concerns. AUPE launched a Charter challenge of Bill 9, asserting it violated workers’ rights to a meaningful collective bargaining process by unilaterally voiding negotiated provisions. Because such challenges take a long time, AUPE also sought an injunction to allow arbitrations hearings to proceed. Justice Macklin issued the injunction and noted: “It is in the long-term public interest to see that… government cannot unilaterally change its contractual obligations through legislation.” Since Macklin’s injunction was overturned by the Court of Appeal, Bill 9 remains in force.

During the summer, public-sector unions began mobilizing their members by hosting lunch-hour and after-work pickets across the province. These pickets attached a political cost to Bill 9. More importantly, they built awareness among union members that the government was attacking their rights. Such actions also normalize collective activity (e.g., picketing) and teach union members how to organize job actions on their own. This gives workers the ability to initiate direct job action locally—such as slowdowns, sick-outs and wildcat strikes—should the Kenney government legislate a wage freeze or rollback.

Paradoxically, a mobilized membership can actually prevent labour conflict. The political costs of job action in the public service, education and, most especially, healthcare are often so severe that the government may prefer to negotiate rather than legislate. While it’s easy to dismiss the idea of such unrest happening in Alberta, recall that Alberta has a history of wildcat strikes. In 1994 laundry workers at Calgary’s General and Foothills hospitals walked out to protest the cuts and privatization agenda of Ralph Klein. Within days, the wildcat strikes had spread to six other hospitals and nine nursing homes, with many other workers engaging in work-to-rule campaigns. Despite pressure from organized labour to end the illegal walkout, the work stoppages appeared set to spread, and Klein blinked, cancelling $53-million in scheduled healthcare cuts.

More recent wildcats occurred in healthcare (2000, 2012), construction (2007) and the prison system (2013). It may seem surprising that workers in such a reputedly anti-union province periodically put down their tools, but workers who over-identify with the boss’s interests (and thus adopt a “git ’er done” mindset) tend to react very poorly when they are being obviously mistreated and feel betrayed. Some quit. Some work slower. Some destroy equipment. And those with a means to act collectively will sometimes down tools and demand better treatment.

Unions don’t like to talk about wildcats, because such strikes can result in crippling fines. Yet Bill 9 incentivizes unions to mobilize their members, because it demonstrates that this government can’t be trusted to honour legally binding contracts. The legal recourse available to unions is simply too slow to give meaningful remedy. If, for example, the Kenney government legislates a wage rollback, a Charter challenge will take years, and in the meantime, members go without a wage increase and the union looks powerless. Often, direct action (or the threat of it) is a much more effective way to ensure the employer holds up its end of the bargain.

Smart politicians avoid escalating tensions to the point where the authority and legitimacy of government are in jeopardy.

Governments are well aware of the power of a wildcat strike. In Alberta they have drafted laws designed to force unions to quash illegal strikes or face crippling financial penalties. What is often overlooked by this approach is that workers simply can’t be forced to work. Yes, the government can fine and seek to jail workers, but these consequences take time to unfold. In the meantime, no one is changing grandmother’s diaper in the seniors lodge or teaching Johnny his ABCs while his parents are at work. And if the workers are prepared to accept the punishment, then the government has no real way to control matters. This is especially the case if the wildcat starts to spread.

Consider the 2013 jail guard strike. On Friday, April 26, 2013, corrections officers at the Edmonton Remand Centre walked off the job to protest unsafe conditions and the suspension (and later firing) of guards for complaining. Over the weekend, guards at eight other Alberta jails joined the wildcat strike. On Monday, sheriffs at the Edmonton and Calgary courthouses were out and were soon joined by clerical staff. Premier Alison Redford inflamed matters and ended up relying on the courts to issue massive fines to force the workers back.

This wildcat demonstrates how quickly and easily a government can lose control by antagonizing workers. If the contempt fines hadn’t ended the strike, the judge would likely have ordered the arrest of peaceful strikers. Such an order could well have triggered a general strike—the snowballing momentum of the strike suggests this was a possibility. It could also have resulted in cops (most of whom are unionized) balking at arresting fellow law-enforcement officers for protesting unsafe working conditions. If that happened—and again I’d say this was possible—at that moment the government would have lost control over the province. Smart politicians go out of their way to avoid escalating tensions to the point where the authority and legitimacy of government are in jeopardy.

With public-sector wages, the government had three options. It could defer the fight by accepting that a deal is a deal and allowing the wage reopener arbitrations to proceed. It could save face by cutting public spending without necessarily freezing or rolling back wages. It could double down, legislate or otherwise mandate wage freezes or rollbacks, and take its chances with unions in the courts and in the streets.

The October 2019 budget continued a hiring freeze in the public sector with planned layoffs for 2020 (some contracts preclude layoffs until then). It also cut funding to government agencies, boards and commissions, which employ significant numbers of workers. In this way the UCP could declare victory by reducing spending without much risk of job action.

The government allowed arbitration to proceed but changed its position from no increase in wages to a 2 to 5 per cent rollback. This puts most unions back at the bargaining table in spring or summer of 2020. The delay could sap unions’ momentum and allow for the economic picture to worsen, which would bolster the government’s case for concessions.

Bill 21 (Ensuring Fiscal Sustainability Act, 2019) was introduced in late October. Hidden in the bill is legislation entitled the Public Sector Employers Act, which allows the government to issue secret and binding bargaining directives to public-sector employers, including specifying financial settlements and contract length. Such mandates make collective bargaining largely meaningless because the government has predetermined the outcome. Bill 21 also allows for replacement workers during strikes.

While Bill 21 will almost certainly be challenged as contrary to the Charter, this will be slow going. In the meantime, unions may be stuck taking job action (whether legal or illegal) in order to secure acceptable contracts. A few days of cancelled surgeries or no access to childcare (which is a key service that the K–12 system provides) would create a lot of unhappy Albertans. An open question is whether the public would support striking workers (e.g., nurses and teachers) or the UCP. 

The UCP’s aggressive attack on workers and unions in its first few months suggests a tumultuous term lies ahead. Key issues to watch will include the Kenney government further rolling back labour law changes enacted by the Notley government and seeking to interfere with union dues collection (a UCP election promise). Kenney in 2020 may also face public-sector workers exercising their recently acquired right to strike.

Bob Barnetson lives in Edmonton and is an assistant professor of labour relations at Athabasca University.

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