The War on Workers

Bills 45 and 46 were an attempt to crush unions. Have Alberta's public sector workers been vindicated?

By Bob Barnetson

On Friday, April 26, 2013, corrections officers at the Edmonton Remand Centre began a wildcat strike. The root cause of the illegal strike, they say, was government inaction on safety concerns about the new jail—a list that ran some five pages. Facing stonewalling, two union members were suspended (and later terminated) for a heated email exchange with their employer.

In response, the members of the bargaining unit—represented by the Alberta Union of Provincial Employees—turned over control of the jail to managers and the RCMP and walked off the job. Over the weekend, corrections staff at Alberta’s eight other provincial jails joined the strike, citing concerns about system-wide understaffing and overcrowding.

Despite being obligated by its own occupational health and safety legislation to address safety issues, the government of then-premier Alison Redford refused to do so. By Monday morning, sheriffs at Calgary’s and Edmonton’s courthouses had also stopped working, in support of the strike, and they were soon joined on the picket lines by clerical staff.

The government was caught off guard by this rapid escalation. Among the rhetorical tactics of then-deputy premier Thomas Lukaszuk—Redford’s point man for the strike—was a claim that the strike was designed to (somehow) advantage AUPE during negotiations for a new contract for Alberta’s 22,000 civil servants.

Justice John Rooke ruled AUPE in contempt of court for failing to obey an Alberta Labour Relations Board order to end the illegal strike. With the union fined $100,000 on April 29 and facing fines of $250,000 the next day and $500,000 each day thereafter, the strike ended on April 30.

According to AUPE, the government promised no retribution against individual union members. Lukaszuk says no such deal existed. Four workers fired for participating in the strike were reinstated in late January. The government also sought a six-month dues suspension for AUPE and $1.3-million in damages for each day of the strike.

In any other year, the April 2013 jail-guard strike would have been the labour story. But 2013 was an unusual year, with rampant labour strife throughout Alberta’s public sector and an unusually draconian response from government. While disputes between Alberta’s government and public-sector unions are not unusual, the unions’ success at resisting the government’s agenda this time around is notable.

If it’s illegal to even mention a strike, what holds a government back from banning free expression or free assembly for any reason?

Wage freezes are a key part of the government’s plan to manage its growing budget deficit. According to Minister of Finance Doug Horner, “Alberta is dealing with rapidly falling resource revenues and it means we’re making some tough decisions.” The government announced a three-year wage freeze for public-sector managers in February 2013. The March 2013 budget saw no new money allocated for public-sector wages. The government also negotiated a freeze with doctors and legislated one for teachers.

By May collective bargaining between AUPE and the government for a new public-service contract was foundering. After exchanging opening proposals in mid-March and bargaining for 12 days, AUPE was unable to get a meaningful government response to any of its 40 proposals. Instead, the government held firm on a three-year wage freeze followed by a 2 per cent cost-of-living adjustment (COLA) in year 4.

Unbeknownst to AUPE, the government was secretly developing wage-freeze legislation while bargaining was underway. According to an affidavit by Peter Watson, Alberta’s highest-ranking civil servant, a group of senior policy advisers initially mooted wage-freeze legislation in February—before proposals were exchanged. On April 15 this committee ordered government lawyers to draft legislation “in case the government [were] to choose that option.” The government’s Public Sector Resource Committee (PSRC)—chaired by Lukaszuk and tasked with coordinating public- sector bargaining—was apprised of this option on May 6, a few days after AUPE had applied for mediation.

Frustrated with the government’s unwillingness to bargain (either directly or with the assistance of a mediator), AUPE applied for binding arbitration on July 15. Alberta civil servants have not had the right to strike since 1977, but they did have the right to refer a dispute to an arbitration panel. The Alberta Labour Relations Board appointed the arbitration board to settle the collective agreement in mid-October, with hearing dates set for February 2014.

According to Watson the government provided instructions on the content of wage-freeze legislation on October 8—before the arbitration panel was appointed and hearing dates were set. Unexpectedly, the government faxed a new offer to AUPE on November 22. This four-year offer was very similar to the government’s opening proposal and contained COLAs of 0 per cent, 0 per cent, 1 per cent and 1 per cent.

Days later and before AUPE could respond, the government introduced Bill 46 (the Public Service Salary Restraint Act) in the Legislature. Bill 46 suspended the right of civil servants to binding arbitration and instead imposed the government’s November 22 offer of 0–0–1–1 per cent—unless AUPE and the government could reach a deal by the end of January 2014. According to the Human Services minister at the time, Dave Hancock, “Bill 46 was about… getting people back to the table so that we could negotiate a fair settlement for our public-sector employees.”

AUPE was dismayed. “Yeah, they want us back at the table, but there’s a gun to our head,” said AUPE president Guy Smith. “If we can’t reach an agreement, they’ll force it down our throats anyway.” This phony bargaining process sparked public outrage and protests—and the strange spectacle of hard-core trade unionists cheering a Wildrose MLA on the steps of the Legislature as he denounced the bill. The government rammed the legislation through the House on December 4 by severely limiting debate, despite critics’ concerns that the government had engaged in bad-faith bargaining and that Bill 46 violated civil servants’ Charter rights.

In 2007 a Supreme Court decision had found that workers have a constitutional right to bargain collectively, ruling “…the state must not substantially interfere with the ability of a union to exert meaningful influence over working conditions through a process of collective bargaining.” Relevant to Bill 46, the court had noted that “acts of bad faith, or unilateral nullification of negotiated terms, without any process of meaningful discussion and consultation may also significantly undermine the process of collective bargaining.” Of course, Charter challenges take years to wend their way through the courts.

In addition to imposing a four-year, 0–0–1–1 per cent wage deal, Bill 46 also provided for a one-time payment of $875 each for most AUPE members in 2014—except workers on maternity, parental and sick leave or workers’ compensation. Excluding nursing moms, new dads and the disabled from this one-time payment appears to violate Alberta’s Human Rights Act and the Charter of Rights and Freedoms by discriminating on the bases of gender, family status and disability.

At the same time, the Redford government also passed Bill 45 (the Public Sector Services Continuation Act), which would impose significant penalties on unions and workers for illegal strikes. While illegal strikes have always been punishable under Alberta’s labour laws, this new legislation radically increases these penalties. Under Bill 45 an illegal strike will trigger an automatic three-month dues suspension plus an “abatement” penalty of $1-million per day to offset employer costs. In addition, the Act also allows penalties of $250,000 per day (plus $50 per affected employee) against a union, $10,000 per day against union officers, a day’s wage per day against employees who participate and $500 a day against non-employees. AUPE calculates that a one-day wildcat strike of government workers would cost it $5.95-million.

In the Legislature, Hancock explained Bill 45 was “about giving Albertans confidence that the necessary services that they rely upon for their health and safety will be there, that they will continue and that there are severe penalties to deter illegal strikes and severe penalties for illegal strikes that would put Albertans’ health and safety at risk.”

Hancock seemed unaware of the irony that his government only discovered this so-called threat to Albertans’ health and safety after a wildcat strike was caused by his own government’s unresponsiveness to workplace health and safety concerns. Interestingly, the mandatory penalties for an illegal strike are much greater than the maximum possible penalty employers face for killing workers. According to Hancock, during the jail guard strike, “(w)e realized we didn’t have up-to-date tools to deal with illegal strikes. We hope never to have to use it.” Hancock could well get his wish, since illegal strikes are hardly an everyday problem in Alberta.

“There have been only two illegal strikes in Alberta in the past 10 years and they lasted a total of six days,” says Athabasca University labour historian Alvin Finkel. “Clearly Bill 45 doesn’t address a pressing policy issue and there was no need for the government to invoke closure on the debate. Bill 45 is about making illegal strikes so expensive that unions and union members will be too scared to use them, regardless of how outrageous their employer’s conduct is. And when you add that to Bill 46—which takes away the possibility of arbitration—there are shades of fascism in this government’s actions.”

Bill 45 also provided for fines for making a “strike threat.” These fines can potentially be levied against anyone—including journalists, academics and members of the public—for counselling workers to illegally strike. Many critics question whether these provisions violate the Charter’s freedom of expression protections.

“The government knows perfectly well its attack on the free speech rights of all Albertans—by assigning significant and in some cases huge fines to anyone who dares to advocate, even theoretically, for an illegal public-service strike—is unconstitutional,” says labour-side blogger David Climenhaga. “Every Albertan should be concerned about this, even if they despise unions. If the government intends to make it illegal for union members to advocate a strike, what is to hold them back from passing legislation banning free expression about their cozy relationship with the petroleum industry or outlawing free assembly for any reason?”

According to Minister of Finance Doug Horner, Bill 46 was necessary so the government could “ensure we negotiate agreements with our public-sector partners that are sustainable and place the government’s finances on a strong footing going forward.” Essentially, Horner is saying the government was worried an arbitrator would award a higher pay increase than the Tories wanted, so it decided to foreclose this possibility by legislating a wage freeze.

If you look a bit more carefully at Horner’s statement, it contains two other messages. The first is that balancing the budget is more important than anything else. The second is that the only way to balance the budget is by spending cuts. In effect, fiscal austerity trumps everything, including fair wages and workers’ rights. Of course, this approach ignores that budgets can be balanced by increasing revenue—from sources such as taxes and oil royalties—to pay for public services.

“Bills 45 and 46 make a mockery of collective bargaining,” according to Jason Foster, who teaches industrial relations at Athabasca University. “Resolving disputes by employer fiat backed by state coercion rolls back the clock on labour relations more than 75 years. The result,” he adds, “is that civil servants are taxed twice. They pay taxes—or have lousier services—like everyone else. But they also forgo wage increases designed to offset inflationary pressures.”

Labour arbitrators have long rejected government arguments that it can’t afford to pay wage increases, on the principle that if the government decides to provide a service, civil servants shouldn’t have to subsidize the cost of that service via substandard wages. This may be why the PCs decided to end-run arbitration and legislate an “agreement.”

Both AUPE and the United Nurses of Alberta are challenging the constitutionality of Bill 45. AUPE has also filed a Charter challenge in court over Bill 46 as well as a bad-faith bargaining complaint with the Alberta Labour Relations Board. In January the government extended the deadline for imposing a wage freeze until March 31—just weeks before Justice Denny Thomas granted AUPE an injunction staying Bill 46 until its constitutionality can be determined.

In his decision Justice Thomas noted: “Alberta did not meet its obligation to negotiate in good faith. …Alberta never intended that the 2013 negotiations with AUPE were to be meaningful.” Subsequent negotiation saw some progress, but the government has so far refused to move on wages. Arbitration is scheduled for August.

At the same time that the government was preparing to freeze civil servants’ wages, it was also preparing to cut their pensions. On September 16 the government announced its intention to significantly change four pension plans affecting some 320,000 workers and retirees.

“We recognize that there’s no crisis today,” said Horner, “but it’s the long-term sustainability that we need to address in these plans.” Horner’s concern centres on a $7.4-billion unfunded liability in the plans—about a third of which is the government’s responsibility, with the rest shared among public-sector workers and employers such as municipalities and colleges. Horner’s proposed changes would reduce workers’ accrual of pension benefits. In some cases, these changes are very significant, postponing retirement for some workers by five years and reducing their pension income even though the plans are in good shape. According to the Local Authorities Pension Plan, the plan “is not in a crisis. …LAPP is a well-managed, robust pension plan that pays pension benefits to all of its retirees as promised.”

Indeed, a union-funded independent analysis of both LAPP and the Public Service Pension Plan shows that they will be fully funded in the next six to nine years with no changes in benefits. That is to say, contributions by workers and employers together with investment returns will eliminate the unfunded liabilities.

According to AUPE’s Smith, “Increasingly the finance minister’s plan looks like an effort to balance the books on the backs of public-sector employees.” Even employers are skeptical of the need for changes. For example, the Alberta Association of Municipal Districts and Counties asserts that the proposed reforms “are not backed up with any available actuarial evidence that the risks inherent to each plan would successfully be addressed and the sustainability improved.”

There has been plenty of fallout from this year of strife. Civil servants—the heroes of the 2013 flood—saw inflation erode their salaries by 2.1 per cent in 2013. While other Alberta workers will see wage increases projected at 3.7 per cent in 2014, civil servants will take another effective cut due to inflation. And the PCs’ attack on pensions means there is a growing exodus of older civil servants who have reached their “magic” pension number (a combination of age and years of service). “Why stay on when the Tories treat us so badly?” asks one civil servant who wants to remain anonymous so she can finish out her career in peace. “I’d rather babysit my grandkids than work for these clowns.”

The relationship between the government and public sector unions is extremely strained. One trade unionist—anonymous for fear of reprisal—said “the Conservative government has been completely untrustworthy.” This sentiment is so widely held that the president of AUPE says he won’t meet with Lukaszuk—the Minister of Jobs, Skills, Training & Labour—unless there is an independent witness. Workers themselves are also incensed. In March, 2,000 Albertans braved wind chills below –40°C to protest pension cuts.

Bills 45 and 46 may also prove to be politically problematic. “I think the PCs’ real problem is with Bill 45—the suppression of free speech regarding prohibiting talk about illegal strikes,” says Edmonton-based political scientist Jay Smith. “While there are authoritarian-leaning Conservatives, there is a streak of libertarianism among Albertans, particularly Conservatives. I’d guess that public support for their actions is very limited.”

The future of Bills 45 and 46 is uncertain in the wake of Alison Redford’s resignation. Will the PCs pull back on their confrontation with labour in the hopes of regaining the support of centrist voters who helped elect them in 2012? Or will the Tories veer hard right to woo Wildrose supporters?

Former PC MLA Donna Kennedy-Glans has indicated that these bills were imposed without consulting caucus. MLAs were expected to go out and sell the legislation to their constituents. These MLAs now potentially face a mobilized opposition. AUPE alone represents 73,000 public-sector members who are affected by either (or both) of Bills 45 and 46. Add in nurses, ambulance crews and firefighters represented by other unions, and over 100,000 public sector workers are affected—each of whom has families and friends. An attack on pensions will add to the number of opponents. With some effort and finesse, Alberta’s public-sector unions could mount a large ABC (“anybody but Conservative”) campaign in 2016.

Says AUPE president Guy Smith, “Redford sweet-talked public-sector employees to win the last election and turned on them in the most vicious fashion the instant she won power. I suspect in 2016 the PCs will reap what she has sown.”

Bob Barnetson is an associate professor of labour relations at Athabasca University. He lives in Edmonton.


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