Facing Facts in Labour Relations

MR. KENT: Mr. Goldenberg addressed our Club on March 15th, 1934, at the age of 261/2 years, on the subject "Economic Recovery in Great Britain and the United States". That was about 16 years after World War I when we were still involved in a period of depression. He outlined the national efforts to recover from that depression, such as by increasing the purchasing power of the people, and by increasing consumption. At that time he was lecturing in Economics at McGill University. Since then he served during the last War as Director-General of Economics in the Department of Munitions and Supply and he has become famous throughout Canada as a mediator and arbitrator in numerous labour disputes. He has also gained renown in municipal matters. From 1944-1948, he lectured at McGill on Municipal Government. He has served as Royal Commissioner on the finances of the City of Winnipeg and on Provincial-Municipal relations in British Columbia. At present he is a Royal Commissioner on Municipal Government in Saint John, New Brunswick, and is also conducting an enquiry into the real estate tax of the City of Montreal. He is also a member of the Economic Advisory Council to the Government of Quebec.

As a Federal Mediator, he effected settlements in the Montreal Tramways Company Strike (1943), the Great Lakes Shipping Strike (1956), the Canadian National Newfoundland Shipping dispute (1957) and as the Chairman of a Royal Commission, settled the 18 week strike in the Vancouver construction industry (1958).

Our Club owes him a particular debt of gratitude for settling the year-long strike of the employees of this Hotel in April of this year. Mr. Goldenberg also acted as arbitrator in the dispute between the Ontario Hydro and its employees and rendered an award in July of this year.

I could say more about the services he has rendered to Ontario and to most of the Provinces, but I believe it has been clearly established that our guest is one of the most experienced and most successful authorities in Canada in labour-management matters. He is to address us for the second time, about 17 years after World War II, on the subject: "Facing Facts in Labour Relations".

MR. GOLDENBERG: Almost 30 years have passed since I last spoke to The Empire Club. It was in March, 1934, and, if I recall correctly, the Chairman then referred to me as a young man. I note that you, Mr. Chairman, have not done so this time. It is apparently the policy of the Club to face facts. This is as it should be, and I propose to do the same in my remarks to you.

I have entitled my talk "Facing Facts in Labour Relations" because I have found that a refusal to face facts by one side or the other or by both sides is a major cause of misunderstanding between labour and management. The public, in turn, not knowing the facts, often tends to reach unfair and unwarranted conclusions on industrial disputes. People are inclined to judge a dispute in terms of "right" and "wrong": the fact is that generally neither side is wholly right or wholly wrong.

The public may also be mistaken in its appraisal of the state of labour relations in general. We know that human beings in their normal every-day behaviour do not constitute news. The fact that 99 per cent of employed workers in an area may be at their work every day is not reported in the press. But when a group, however small, goes on strikethat is news! And it continues to be news until the strike is settled. I do not blame the press: its business is to publish news. But too often the publicity and the accompanying discussion have the effect of giving an exaggerated impression of industrial conflict to the man on the street. He forgets that in terms of the numbers at work, those on strike at any one time constitute a very small group. And he comes to the conclusion that the unions are always calling strikes.

The fact is, of course, that strikes are not the general rule. That is what makes them news when they do occur. The general rule is industrial peace. The vast majority of collective agreements are negotiated and re-negotiated without strikes and without publicity. It would contribute to better understanding if this fact were more widely appreciated.

There is a tendency when a strike occurs for people to say "there ought to be a law". Well, there are laws and, as a lawyer, I, of course, believe there should be laws. They are necessary to regulate the exercise of power and to curb its abuse. But, we have to accept the fact that there are problems in human relations which cannot be solved by law alone. This applies to relations between employers and employees as much as to relations within the family. The Civil Code of my Province imposes upon wives the obligation to obey their husbands. I assure you that, in practice, if there is any such obedience, it flows from other considerations.

Similarly, laws, however stringent, will not by themselves assure industrial peace. We must face the fact that they are human beings on both sides of the bargaining table, that across the table each side faces human interests, human aspirations and human fears. Peaceful relations between the parties will therefore depend not on laws but on the degree to which they are willing and able to understand each other and to make the compromises imposed by the facts which confront them. Compromise is not a sign of weakness. Edmund Burke, the great conservative thinker, wrote almost 200 years ago that: "All government-indeed, every human benefit and enjoyment, every virtue and every prudent actis founded on compromise and barter."

This is particularly true in a democracy, and collective bargaining between employers and trade unions representing their employees is the application of democratic practice to industrial relations. I do not think I have to argue that trade unions and collective bargaining are an essential feature of modern industrial society. In the absence of collective bargaining there would be no bargaining at all under a system where the parties are as unequal in power as the individual worker and the corporation which employs him. In the words of Mr. Justice Ivan C. Rand, formerly of the Supreme Court of Canada, "the history of the past century has demonstrated [that] the power of organized labour, the necessary co-partner of capital, must be available to redress the balance of what is called social justice."

I have said that collective bargaining is part of the democratic process. In democracies like Great Britain and Sweden it has long been accepted by both parties as the normal method for negotiating terms of employment. In Canada and the United States, however, where it has not been as universally accepted, it was found necessary to enact laws to make collective bargaining mandatory under prescribed conditions. We have thus written into the law the social desirability of labour organization and collective bargaining. We have labour relations laws and labour relations boards to administer them. They date from the Wagner Act of 1935 in the United States and are barely twenty years old in Canada.

Labour laws must, of course, protect the rights of both parties to industry and also the public interest. To achieve this they necessarily prescribe certain procedures and allow certain delays for their application. The law must allow some delays, but experience shows that where the delays are such as to permit one party to take advantage of them merely to frustrate the other, the results are not conducive to good labour relations. And businessmen know that poor labour relations can result in low efficiency and high labour costs.

The longer the settlement of a labour dispute is delayed, the more inflexible and unreasonable the parties tend to become in the positions they have taken. This is human nature-and I have had to contend with it. The parties for the time being seem to forget that a settlement has to be reached at some stage. They forget the truth of what Mackenzie King, who was a student of labour-management relations, pointed out, when he said that: "With Labour and Capital it is very much as with husband and wife: despite ditterences, they must continue to live together, or cease the relationship altogether." This is no less true because it was written by a bachelor.

I suggest that, since our labour relations laws are enacted to deal with the facts of industrial life, they should be reviewed periodically in the light of experience and of changing conditions. If it is found that they permit delays which serve to retard agreement unduly, such delays should be reduced. Undue delays intended to defer legal strike action are, in part, responsible for so-called "wildcat" strikes. Again, if it is found that procedures which are appropriate to some branches of industry are not appropriate to others, they should be made applicable only where they are appropriate. Procedures which meet the requirements of industries providing year-round employment do not necessarily meet the requirements of industries offering only irregular and seasonal employment. If new procedures and practices appear necessary, they should be introduced.

It is not enough, however, for the law alone to take cognizance of the facts of industrial life. It is more important that these facts be faced by the parties themselves. They have to live with them. And if to live with them requires compromise and changes in traditional bargaining procedures, both trade unions and employers must be prepared to make them.

On this point, in my report as a Royal Commissioner on labour relations in the Ontario construction industry, I said some months ago that: "Tradition dies hard, but where adherence to traditional procedures may multiply and aggravate industrial disputes, the onus is on the parties to adapt their procedures to the facts imposed by the nature of the industry.... Insofar as changes in established bargaining procedures are concerned, I believe that free collective bargaining will be best preserved by negotiation and agreement between the parties, provided that each party is prepared to face the problems and to make necessary adjustments. Failing this, public opinion may, wisely or unwisely, lead to the imposition of restrictive controls."

In the field of labour relations, the public image of the parties is a factor of which both labour and management must take account. This image is not improved by disputes arising from a persistent refusal to make reasonable compromises or peaceful adjustments required by the facts. There are, for example, strikes arising from jurisdictional disputes between unions. The public does not understand that the underlying reason for such disputes is the simple human instinct of self-preservation. In the construction industry, where these disputes mainly occur, the unions operate in a labour market with an extremely high rate of turnover and, therefore, a very low degree of security of job tenure. Accordingly, they seek to achieve more security for their members by protecting their craft jurisdiction. This is not unusual. Business and farm organizations also exist to protect businessmen and farmers operating in an uncertain market economy. But, jurisdictional disputes in the ranks of labour which lead to strikes and injure innocent parties do not help to create a favourable image.

I suggest that organized labour must establish effective machinery in Canada for the settlement of disputes between unions without work stoppages. This is particularly necessary where established craft jurisdictions are affected by new production methods or the use of new materials. Inter-union machinery is also required to deal with disputes arising from so-called union "raids" on the membership of other unions. The public understands strikes by unions arising from conflicts with employers; it does not understand strikes arising from conflicts between unions. This is a fact which must be faced because institutions operating in a democratic society cannot afford to ignore the impact of their conduct on public opinion.

I know that, when I talk of the conduct of the parties and their public image, your mind turns to instances of abuse of power. Such abuse, where it exists, must be condemnedand, in the case of trade unions, no one condemns it more than the large majority of union leaders who are honest and responsible. Some people tend to judge all trade union leaders by the acts of a small minority. This is as unfair as it' would be to condemn all businessmen because inquiries have disclosed dishonest practices by some of them or to condemn all politicians because corruption has been proved against a few. We must be fair. And, in seeking a remedy for abuse of power, we should avoid legislation which punishes the innocent with the guilty and has only the ulterior motive of imposing severe restrictions on free collective bargaining or seeks merely to reduce the power of one party in order to place it at a disadvantage in its dealings with the other. Such laws would not make for industrial peace.

In the United States there has for some years been agitation for so-called "right-to-work" legislation and such legislation has been enacted in a number of the states. I have heard the term used in Canada. It is appealing: on the surface, it expresses a worthy intention to protect the individual's right to work. In fact, however, it is only a catch-phrase: its authors have shown an interest neither in rights nor in work. They are interested primarily in setting the clock back as far as the democratic right to bargain collectively on conditions of employment is concerned. There is no "right-to-work" legislation in any of the major industrial states. But it is significant that among the states which have enacted it are Alabama, Arkansas, Georgia, North and South Carolina, Florida, Texas, Virginia and, of course the "sovereign State" of Mississippi. If we in Canada are concerned with any phase of human rights, I am confident that it is not to these states that we shall look for guidance.

I think there is general agreement that abuse of power must be curbed. In an age of big business and its counterpart, big unions, each in a position to wield great economic power, the exercise of such power, whether by unions or business, is properly a matter of public concern and calls for appropriate protection bylaw against its abuse. I suggest, however, that protection to be effective requires not only a law but also the exercise of responsibility by the persons concerned. In a trade union, for example, abuse of power is made easier where there is lack of active participation by the rank and file in the business of the union. Now, laws can provide a frame-work for the application of democratic principles, but the application of such principles will in fact depend upon the responsibility shown by the union and its members.

In one of his last lectures in America, Professor Harold Laski, whom no one will consider to have been anti-labour, said: "The need we all confront, not least among the trade unions, is to make democracy democratic.... A trade union needs discipline; but the last thing it needs, and the last thing it ought to accept, is an autocratic dictatorship imposed from above.... The unity of workers in their trade unions will be maintained only by making unions democratic, and democracy, I repeat, is participation in which the rank and file are not only told they matter, but are really aware that they do matter to their own leaders."

This is sound advice. But it must be applied realistically. Democracy also requires discipline. It is important to remember that employers do not like to bargain with trade union officers who cannot make a bargain. The same employers who may complain of the absence of democracy in a trade union, will also complain of lack of authority on the part of the leaders, of lack of union discipline and of inability by unions to enforce contracts. It will therefore not serve the interests either of employers or employees to force rigid rules on union organization and practices in the alleged interests of democracy. For effective collective bargaining and enforcement of contracts, we have to face the fact that there must be some compromise between the authority of the elected officers of a union and the control over their actions vested in the membership. I have already said that compromise is of the essence of democracy.

As an example of abuse of authority, it is charged that some union leaders call strikes without the approval of their members. Considering the problems faced in organizing and conducting a strike, I would say that such instances are infrequent. But, to the extent that the allegation is true, it points to an abuse which should not be condoned. Strikes are costly to both sides and must not be called until all other means of settlement have been exhausted and the prior consent of a proper majority of the workers has been obtained through democratic procedures.

The public must not be led to conclude from talk of strikes that union leaders are "strike-happy". The facts prove otherwise. Nor should it be concluded that there is a cure-all for settling all industrial disputes without strikes by unions or lockouts by employers. Mediation or voluntary arbitration by third parties would be the more civilized method, but, since mutual confidence has not yet replaced mutual suspicion, I am afraid that the required degree of civilization has not yet been attained. This is not intended as a particular reflection on organized labour or on management; in another area, we have this year witnessed a strike by the medical profession, which, like lawyers and other workers, is also organized.

Strikes are, of course, the feature of labour-management relations which attracts most public attention. They are highly publicized and directly or indirectly affect third parties. Their broad impact may be serious. The public therefore has an interest in the peaceful settlement of industrial disputes. Under to totalitarian regime, whether Fascist or Communist, there is an easy formula: strikes are prohibited. But a democracy must have regard to considerations which do not face dictatorships. To force men to work under conditions to which they object can only be justified in a democratic state by exceptional circumstances. We must face the fact that the right to strike and the employer's right to declare a lockout are necessary counterparts to free collective bargaining. The strike and the lockout are methods, however painful, for reaching agreement. The alternative is state regulation, which the parties to industry are not prepared to accept. Neither party wants agreement to be imposed upon them.

It does not follow that unions are free to call strikes in all cases or as and when they choose to do so. The right to strike in Canada is circumscribed and limited by legislation. The law now generally prohibits strikes during the term of a collective agreement and in certain essential public services, such as police and fire protection, they are as a rule prohibited at any time. In these cases the general rule is that disputes must be settled by arbitration. Where the right to strike exists, the law prescribes minimum delays for bargaining and conciliation before it may be legally exercised. There are, of course, occasional illegal strikes; I suggest that unduly long and frustrating procedural delays are partly to blame.

There have been particular disputes where, conciliation or mediation having failed, government, representing the community, has imposed compulsory arbitration because it was deemed that a work stoppage would injure a vital or essential public interest. Such intervention has been rare; in a free society the power to force compulsory settlement must be used with great discretion. Nevertheless, we have to accept the principle that where the interests of the parties conflict with the overall interests of the community, it is the interests of the community which should prevail. And this principle must govern in any area where the welfare or the safety of the community may be injuriously affected by the conduct of organized interests, be they doctors or hodcarriers.

We hear it suggested from time to time that our society has reached a stage of development in which strikes and lockouts have become obsolete. I am afraid that this is an example of both over-simplification and over-optimism. Now, there is no doubt that the use of the strike weapon has been and will continue to be affected by social and economic changes. For example, with progress in collective bargaining, where the workers have attained a higher level of income, have become entitled to a variety of pension, insurance and other benefits, as well as seniority rights, and have adjusted their living standards accordingly, they may find a strike too costly both in terms of immediate wages lost and in its effects on their longer-term security. Where these considerations apply, they have a growing interest in avoiding strikes to settle disputes. But these considerations by no means apply in all situations: workers earning a bare subsistence wage, or even less, do not have the same interest in avoiding strikes.

The evolution of public policy on labour relations has also affected the use of the strike weapon. Thus, the enactment of laws to protect the right of freedom of association and to establish collective bargaining rights has to a large degree, although not entirely, eliminated what was for many years a major cause of violent strikes-the struggle to win employer recognition of unions. Some of us recall the "sit-' down" strikes of the 'thirties when unions fought for recognition in the mass-production industries.

While change in our society has reduced some of the causes of tension in industrial relations, we cannot conclude that it has eliminated them. In fact, change has created new tensions. We now face the impact of increasing automation in industry on employment and the security of the worker. For example, men trained in particular skills, which they expected to use for the rest of their working lives, may find at an age when it is impossible for them to be retrained or to obtain new employment, that their skills are no longer required. The loss of their jobs affects also their pension rights, their seniority and other acquired rights. We find here the raw material of conflict. The human consequences of economic and technological changes are now therefore matters of major concern to governments and in labourmanagement relations. It becomes necessary to determine how the social costs of the changes should be shared: social justice has to be balanced against economic efficiency.

It is clear that these problems call at the outset for close co-operation between management and labour. Before introducing changes which will displace or shift labour or otherwise materially affect the relationships with labour, it is the responsibility of management to discuss the changes and their probable effects in advance with the representatives of its employees, and to consult with them on the best means of adjusting to the new situation. This may require new skills on the part of both management and labour leaders, but such consultation is necessary to facilitate acceptance of and adjustment to the facts of change.

I am confident that in this day and age no responsible management will take steps vitally affecting its working force before consulting its representatives. Without responsibility on one side, there will not be responsibility on the other. I suggest that it would promote responsibility if, instead of meeting only as opponents in collective bargaining negotiations or on grievances, the representatives of management and unions would meet more regularly to discuss matters of mutual concern affecting the industry. Such discussions would give recognition to the fact that their mutual interests extend beyond the issues of wages, hours and working conditions which are negotiated in collective bargaining. In this way they could learn to understand each other and their respective problems, which is essential if mutual confidence is to replace mutual suspicion. This would be a mark of responsibility-and the public has a right to demand responsibility from both sides.

THANKS OF THE MEETING were expressed by Mr. R. J. Wood.