Canada's Adversary System—Is There an Alternative?

MR. KARN:

Mr. Minister, Reverend Sir, distinguished guests, ladies and gentlemen: A milestone in labour relations was established in our country in 1844 when the

oldest of Canada's printing associations, the International Typographical Society, No. 91, was formed. Its motto was: "United to support, not combined to injure".

Although the trade union movement may have accomplished many major social changes for the betterment of Canada as a whole in the intervening period, there was another rather unenviable milestone reached 131 years later in 1975--a world record in fact--when Canada recorded 2,840 days lost through strikes per thousand employed, according to statistics published by the International Labour Office. Compare this with Britain in that year--considered by many to be killing herself off through labour unrest--where there were only 540 days lost per thousand employed, and she has a much larger labour force.

Because of this unfortunate trend, all responsible citizens are concerned about where our society is heading. In certain sectors of our economy, particularly in secondary manufacturing, we are no longer competitive with other industrialized nations who not only take over our traditional export outlets, but capture an ever increasing share of our domestic markets, leading to rising unemployment. And the cost of labour, while important, is only one of several factors contributing to this problem.

As our guest speaker today is well aware, labour and management are making a determined effort to co-operate and they hope that governments, the third partner, will do likewise. By way of illustration, the Canadian Labour Congress, and the Canadian Manufacturers' Association, on January 19th, 1977, sent a joint letter to Prime Minister Trudeau detailing several topics of national interest and concern upon which both agreed, seeking government support for their views.

Mr. Dennis McDermott began his career in the trade union movement in 1948 at Massey-Ferguson in Toronto. He rose through the ranks in Local 439, being as vocal on matters concerning the dignity of the individual citizen in Canadian society as he was on labour issues. The Toronto Labour Committee for Human Rights also received his attention and he is now a member of the Canadian Civil Liberties Association.

His involvement in international affairs, both in the U.A.W. and the C.L.C., led to his membership in the central committee of the International Metalworkers Federation, a world-wide organization based in Geneva, Switzerland, embracing about 13,000,000 metal workers in sixty-five countries. He has lectured widely on arbitration and labour law at universities and at the Labour College of Canada, serving a two-year term on the Ontario Labour Relations Board.

After he worked for fourteen years as an international representative for the United Auto Workers, numbering 150,000 in Canada today, he was elected their Canadian director in 1968. That same year he was elected a general vice-president of the Canadian Labour Congress, and in 1970, international vice-president of the U.A.W.

Last week he accompanied Prime Minister Trudeau on his visit to meet President Jimmy Carter in Washington.

Mr. McDermott is concerned that many after-dinner speakers on Canada's labour situation have never worked in a plant and that most have never worked at all. According to that criterion, perhaps I may just qualify, because prior to my acquaintance with the U.A.W. in Windsor as a summer student employee, I had the privilege of working on a dairy farm in Oxford where we put in two eight hour shifts per day one before lunch and one after--six days per week with a few hours off on Sunday for church and Sunday school. But times change, and I was shaken one morning years ago when my son at the age of seven asked me: "Dad, are you going to work today or just talk?"

Ladies and gentlemen, I am most happy to invite Mr. Dennis McDermott to speak on the subject "Canada's Adversary System--Is There an Alternative?"

MR. MCDERMOTT:

Mr. Chairman, ladies and gentlemen: You should learn from that Windsor experience that it is easier to milk a dairy farmer than it is a dairy cow.

There is some concern, and a great deal of speculation about the so-called adversary system in labour relations here in Canada. A number of questions are being asked. Can it be improved? Should it be replaced by some other process? To this end, people are looking at the German co-determination system, for example, or the Swedish system, or some other likely experiment from the European scene. Our federal Minister of Labour, John Munroe, just a few weeks ago came back and appeared on the Canada AM Show, and even seemed to be enamoured by the British system. Ye Gods--he hasn't looked at it very closely!

I think it is well known and appreciated that the transplants of human organs are very delicate and very intricate operations. They are always hazardous, and sometimes they turn out to be fatal. One can say ditto about the oversimplification thesis that's going around now about the proposal of transplanting European experiments to Canada in the industrial relations scene.

Let's examine it, because people go over there and take a very fast look. For example, John Munroe was obviously attracted by the "Social Contract", but did not look at the rest of the spectrum. Then they come back here and make afterdinner speeches and propose that we adopt such a system here.

Let's take a look at West Germany for just a moment. The trade union movement in West Germany is a model. It didn't come about as a result of a group of workers struggling for recognition from Day One, the way it was here. Hitler destroyed the legitimate trade union movement in Germany. In the post-war years, the allied occupational forces and the allied government of Germany decided that, as part of the democratic reconstruction of Germany, a strong and viable and democratic trade union movement was a necessary linchpin in that whole structure. They in fact put together a trade union movement which is a model: a relatively small number of very large unions, with very broad bargaining scope, well constructed, without any of the inhibitions or anachronisms of the past. They put together a very strong labour centre in the D.G.B. They introduced works councils instead of legitimate trade union structures at the local union level, because at the local union level the input is not as important in Germany as it is here. The power is relegated to the top.

An indication of what I am talking about is that despite many of the attractive things about the German system, the facts are that about one third of the work force are organized in these trade unions at the worker level, about the same percentage that we enjoy here in Canada.

The unions themselves, because of this conscious and deliberate reconstruction, are staffed and run for the most part by professionals and intellectuals, who themselves are very closely aligned with and associated with the state government. And by the way, workers do not sit on the board of directors in Germany, as some of our correspondents will tell you. They sit on management boards, and there's a big difference between a management board and the board of directors.

The Yugoslavs do the same thing. They are perhaps even a better model for a lot of people. With respect to the worker input on the management councils, I have talked to them, and they say, "Yes, we have great input, Comrade, when it comes to deciding on a few more toilets, or when it comes to deciding on the extension of the parking lot. But when we are talking about manufacturing, when we are talking about the productive process, changes of model and design, the marketing system, then management makes up its own mind."

Another quick example is Sweden. The unions in Sweden are run from the top. Their collective bargaining is highly centralized. There is almost no input at the grass roots level as we understand it. And the environment, that peaceful environment that everyone envies so much in Sweden, has been created by forty-seven consecutive years of Social Democratic rule. It is a society which has cradle to grave social benefits, provided for the most part from general revenue and by the state. And so collective bargaining in Sweden is a relatively simple process and operation as compared to the highly complex and variable collective bargaining of the Canadian scene.

In Sweden, because of the environment that has been created, because there is not the excitement about the recognition of a trade union that there is in this country, well in excess of 80% of the work force are organized in trade unions, from all walks of life--farmers, teachers, bankers, professors, sales people, police, and even the military. The army, in Sweden, has a trade union!

So let's for a moment recap and see how many of these ingredients actually apply to the Canadian scene.

Consider Germany for just a moment. I talked about the way the German movement was constructed in the post-war years. Canadian unions do not have the same history and they are much more complex. Canadian unions are not monolithic. The Chairman mentioned the birth of that old society so long ago. It is very little different today, that same organization. And I don't make that as a disparaging remark. Canadian unions go back way into history, with a great many anachronisms and almost tribal conditions, which we may or may not like, but the fact is that they are there.

I mentioned the small number of unions with broad bargaining scope. It's the diametric opposite here. There is a multiplication of unions. They are diverse and very varied. The suggestion is that we should merge into one large viable organization. I don't know how easy it is to merge a corporation, but I know that because of all these ingredients it is extremely difficult to bring about the merger of trade union groups in this country who have very deep roots and whose traditions are very real.

I talked about a strong national labour centre in the D.G.B. We have a Canadian Labour Congress here, but it is not at this point in time a strong, effective, viable national labour centre. Why? Because most of the people who I am talking about, the various affiliated trade unions, are unwilling to surrender their autonomy and their authority in the same fashion as it is done automatically in Germany.

I am very much afraid that the works councils, which were introduced in post-war Germany, in this country would turn automatically into what we call company unions. They would be instruments of the employer, as indeed they were in Germany in the beginning. I. G. Metall, the metal trade union, spent a good part of the first twelve years of its existence striving to take over control and give some direction to the works councils that were created by the post-war legislation.

I said that the unions are staffed and run by intellectuals and professionals. In the Canadian trade union movement it is the total opposite. Most of us come from the ranks, as I do, and the grass roots democratic input is very firm and very real. I don't think it would be possible to take that away from the membership of the trade unions in Canada, nor would I suggest that it should be taken away. The laws of this province, the laws that exist in the other provinces, and indeed the federal law are oriented in this direction, that the union begins with the workers, and that the workers retain the authority.

As to workers sitting on the boards of directors, the obvious question there is not only are we ready for it, but is organized management ready for it?

Let's take another look at Sweden. I said that the unions are run from the top. There is no way that can happen here. I can just imagine my going down to General Motors in Oshawa and saying, "From this point on, forget all about this vast and complex apparatus that we have put together, and all the skilled people that we've trained. From this point on, Dennis McDermott is going to do it for you." They would say, "Thank you, Dennis, with great respect . . . but no thank you."

So that cannot be duplicated here on the Canadian scene.

When I mention the social benefits in Sweden, that is perhaps even more pertinent. Here we have to bargain from the employer for the social benefits that are provided by the state in Sweden. The U.A.W.'s philosophy, at least, is that we always give them the privilege of paying for the full benefit, so that when it does get to legislative time they are much less inclined to join the insurance lobby and so on who are trying to persuade the government against it. The simple philosophy is that in a corporation there is a straight line from its heart to its pocketbook.

So collective bargaining in Sweden is very simple. Collective bargaining here is very complicated.

I mentioned the number of people who are represented in Sweden, the high percentage of organization. Of course, the diametric opposite is true here. Canadian unions are pretty severely limited in their scope for organizing. I mostly takes in manufacturing, recently more public service. But the service industries, and all the other miscellaneous elements in our society are for the large part not represented.

There is another very, very fundamental factor, which is present in Europe and noticeably absent here. That is the whole question of union status, union recognition, the whole business of the acceptance of unions as part of the structure of our society, their right to exist equally with other entities in the society. That argument disappeared a long time ago in Europe. That argument, unfortunately, flourishes here.

If I go to a cocktail party over there in Brussels, or Geneva, or anywhere, I am introduced as a trade union representative. They say, "That's interesting--what union are you with? What position do you occupy?" Here I have to spend the first two hours exploding myths and stereotypes and defending my very right to exist. I've developed a counterargument. I first of all discover the occupation of the person who is trying to pin me down. I discover he's in drug manufacturing. I accuse him of selling narcotics to teenagers, ripping off the public, all that sort of thing.

He says, "Wait a minute, I'm not like that!" Then I say, "And I'm not Jimmy Hoffa."

Let me tell you a true story of a young man who came over here from Sweden just a couple of years ago from the Volvo Corporation. He thought it was the natural thing to do, since they were going to set up an automobile manufacturing enterprise in Nova Scotia, to come and talk to the automobile workers about certain pertinent things. How much money would they have to pay? What would be the general work conditions? What would be the expectations? What would be the contractual arrangements? And so on.

He arrived in my office, with a letter of introduction from a Swedish colleague of mine. He was very perplexed by the contents of the collective agreement. He said, "This is all state business." And then after a couple of hours' discussion, I explained to him that we couldn't come together by comfortable arrangement--that would be frowned upon. It would be necessary for us to go down and systematically organize the workers, and make application for certification. I called in my staff person who I was going to send down there, and he talked to this Swedish corporate executive for a little while. Then he called me outside and said, "What's his game? What's he up to?"

The Swedish businessman, after that, moved around Toronto making various contacts and talking to all the necessary people. Then he came back to me one week later, terribly confused and very upset. He said, "Apparently I committed the cardinal sin. I should never have talked to you in the first place. My Canadian colleagues say 'What in the world are you thinking of--talking to a trade union. One must never do that!' So now that I'm here again with you all I can talk about are the evils of socialism and the suicide rate in Sweden!"

That's a true story, not exaggerated.

After these observations, let me ask the question. Let's take a closer look at the adversary system. Has it served us well? Despite the ups and downs and the statistics that your chairman read out. Does it really need to be scrapped? Or is the more intelligent alternative to revise it, to rejuvenate it, to update it and improve it? And the supplementary question to that is, can it be done?

I think the answer is yes. And moreover, I believe the solution is a very simple one. It does not need hordes of academics off on long sabbaticals, studying the systems in other countries, examining the workers like anthropologists and biologists. The simple answer is a much more direct, more intelligent, continuing dialogue between management and labour at all levels, but particularly at the top.

Mr. Stapleton* and I, apart from the fact that we met today at this luncheon, meet once every three years when we sit down to indulge in collective bargaining for General Motors. On the very rare occasion where a relationship of mutual respect exists at the top between two people, one from the trade union side and one from the management side, that relationship has often been the instrument that saved the day in a difficult situation. I don't mean bargaining with the employer with a knife and fork, instead of the normal collective bargaining relationship, but I mean the opportunity to develop a relationship of mutual respect.

Under our existing system, there really isn't much opportunity to achieve that. On the very rare occasions when I meet a corporate head, at a luncheon like this, or some seminar or dinner, we usually discover to our mutual delight that we don't have horns protruding out of our heads, that one is a normal human being like the other.

He will quite often say to me, "How did we get into that strike last year?" Because he really doesn't know. And I can usually relate to him that we got into that situation because a group of very doctrinaire sectarian people, small in number on either side, got into some semantic contest about whether to change the word "shall" to "will". Not "nay" to "will", but "shall" to "will".

The trouble is that the real heavies on the corporate side, the real decision makers, are shielded. They are insulated from the burly-burly activities of the labour-relations department. They are usually shielded by over-protective industrial relations managers. Perhaps even more important, they are often kept totally ignorant of what is going on.

Let me tell you another true story that occurred just last week, down in Washington. We were having a cocktail party and reception at the White House. A person who is very high in the Carter Administration, a Cabinet Minister, came up and made himself known to me. He was formerly the president of a large corporation with operations both in the United States and Canada. He told me that I was a "very stubborn, determined man". We had had a confrontation with that corporation back in December in Toronto. It involved a very small group of people at one of their operations in Ontario, but they had many other operations in Ontario. It concerned a legal opinion. The corporation delegation came trooping into this hotel, by Sikorsky from Detroit, they came marching into my room, pin-striped suit, Brooks Brothers shirt, all the same kind of eye-glasses, all with sideburns the same length. Have you ever noticed how some of these corporate guys all look as if they came out of the same mould? Like cookies.

They too were very determined. We had an impasse, a stand-off. They went into great eloquent length about the character of this corporate head, the person I met in Washington, about how determined he was, and how he would never, under any circumstances, break the law.

I said that we had an equally determined and ethical person, and that "You're looking at him, and what we are asking you to do is not a violation of the law. Your legal counsel says it is. Our legal counsel says it isn't. Obviously we need another legal opinion."

To cut a long story short, we did get out of that situation. But my friend in Washington reminded me of it and told me they had fired their lawyer. "You were right, and we were wrong."

Then he made the following very important observation. He said, "You and I could have settled that over the telephone in about five minutes, couldn't we, but it just never occurred to me."

That's the significance of the statement--it just never occurred to him. Neither did it occur to me. He said, "We live and learn."

That's the kind of dialogue that I'm talking about. I am not seeking to embarrass anyone, but would you believe that I have never met the Canadian president of General Motors? I am the head of the U.A.W. here in Canada. We have the direct bargaining relationship with him. I wouldn't know him if I fell over him. I didn't know his predecessor. I know the president of Chrysler to look at him, because I bump into him at airports and places like that. He gets on first class and I go to the back of the bus. That's the end of that relationship.

Roy Bennett of Ford, who gets out into common circles a little more than the others, I meet at conferences and seminars, but I have never sat across the bargaining table with him. I watch the president of American Motors doing his TV commercials, but I've never met him either. Massey Ferguson happens to be my alma mater. Not only have I not met the president, but I have never met the senior industrial relations manager. He refuses to descend from his ivory tower to meet the likes of me, who he calls "that snot-nosed kid from the machine shop."

My point is that industrial relations people are a different breed of cat. I suppose they are victims of their environment, the victims of the curriculum and the orientation process of the schools of business administration which we say produce gorillas in grey flannel suits. But they in turn depend more and more upon a supplemental army of so-called third-party experts-lawyers, academics, specialists, plus a whole array of rag tag and bobtail consultants. I'll let you in on a secret. If you ever find yourself unemployed, you have one of two choices. Start a new religion, or become a labour relations consultant. Both lead to great wealth.

In addition to all of this, you have arbitrators, conciliators, mediators, investigators, analysers, and a whole raft of fulltime busybodies who incidentally make a fat living out of the ordinary differences which are bound to arise between organized management and organized labour.

Therein, I submit to you, lies the greatest threat to industrial harmony in this land. Here are the real beneficiaries of the adversary system--enormous personal benefit, little or no accountability. Some arbitrators in this province make in excess of $120,000 per year, dealing with a whole lot of relatively simple uncomplicated cases of discharge and discipline.

We must ask ourselves a couple of questions. Who promotes the adversary system? Who benefits from it? Certainly not organized labour. Certainly not the workers that we represent. If anyone thinks that a strike is a romantic experience, I suggest that you get involved in one on a practical basis.

The regrettable part of all this is that if you boil it all down, who really has more expertise than the two major principals in the act? Who knows more about their own enterprise and management? Who knows more about the aspirations and desires of their own people than a democratic trade union that is in touch and has dialogue with its own membership. Who stands to benefit from avoiding confrontation? Management on the one hand, labour on the other. Who has more accountability, who profits from industrial harmony more than organized management and organized labour?

I'm not suggesting that all these people are conscious and deliberate saboteurs, although some of them could mess up a one-car funeral. But they are sometimes a very serious inhibition for the principle parties to the conflict to get at their own problems, because the parties tend to farm out their responsibilities to these so-called experts. It is my submission that if management on the one hand and labour on the other were to really make an effort to measure up to their respective responsibilities, and show a collective willingness to solve our own problems, we could eventually bring about the wholesale dismissal of these third-party people. They will then have to find some other work.

To get at the very root of the adversary hostility, consider what happens when a group of workers applies for certification, under the labour legislation. It is something that is'" designed as a very simple process. They are immediately confronted by an avalanche of petitions, interventions, prescriptions of the bargaining unit who want to exclude Miss So-and-so because she has some area of confidentiality, the notion being clearly expressed that anyone belonging to or having a connection with a trade union is unworthy and disloyal. What absolute nonsense! What was originally designed as a simple process of certification becomes a nightmare. The animosities and the adversary system are firmly entrenched before they leave the cloistered halls of the Labour Relations Board in this country and before collective bargaining even begins, and the interlopers are firmly entrenched from Day One.

The cure is to forget about Europe. First, get the same kind of social latitude here that trade unions enjoy in Europe. They don't have to defend their right to exist. They are an acceptable, responsible entity. Get the bigotry out of our system. Afford to unions the same degree of status that we expect for ourselves.

Second, elevate the labour relations system to a higher status in the corporate hierarchy.

Third, appoint people to those very important endeavours without which the enterprise does not operate, appoint people of equal calibre to those selected in marketing, design, finance, and production.

Fourth, eliminate the third-party hordes. Let the two major principals assume the major responsibility. In other words, return the collective bargaining process to the people to whom it properly belongs in the first place.

Fifth, provide for more meaningful and on-going dialogue at all levels.

Sixth, eliminate some of the anachronistic rules and regulations that govern workers in their industrial society: "Thou shalt not do this, thou shalt not do that, thou cannot do this or that," all of which are designed on the supposition that the worker is lazy and dishonest and doesn't want to work in the first place. Create a society in the work place which is more akin to the society that the person enjoys for the other sixteen hours of the twenty-four in which he lives the life of a citizen.

Seventh, engage in wholesale reorientation of attitudes on both sides, with emphasis on the positive rather than on the negative.

Work at it steadfastly, work at it with some devotion, bring it about in our time. I am sure it will last for a long time, perhaps for all time.

The appreciation of the audience was expressed by Mr. Marvin Gelber, Honorary Treasurer of The Empire Club of Canada.

* Arnold G. Stapleton, Director of Personnel, General Motors of Canada Limited.