Dispute resolution and Canada Post: next steps

A discussion of the dispute resolution options for Canada's postal service, plus a return of Rule of Law Watch

People look into the future and expect that the forces of the present will unfold in a coherent and predictable way, but any examination of the past reveals that the circuitous routes of change are unimaginably strange. …

Rebecca Solnit, “The Blue of Distance”, A Field Guide to Getting Lost, 2005

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Canada Post and dispute resolution processes

The never ending saga of labour relations at Canada Post continues. Although my background is in labour relations, I am not going to comment on the substance of the dispute between the employer and the union. I will however weigh in on the process for resolving the dispute that the federal government has settled on - putting the employer’s final offer to Canada Post employees for a vote.

We now have the benefit of a report by William Kaplan, a noted arbitrator, on the roots of the challenges in collective bargaining between the parties. Kaplan was appointed under section 108 of the Canada Labour Code as an “Industrial Inquiry Commission”. For those interested in a good summary of the underlying issues and the history of the thorny relationship between the parties, it is a good read. Diagnosing the problems is a good exercise - but it is how the dispute is resolved and how the relationship can be repaired that is of most interest to users of Canada Post’s services.

The first - and best - option for resolution is a freely-negotiated agreement between the parties. However, Kaplan states that based on the history between the parties and the issues, that is an unlikely prospect. That leaves three possible options:

1. Putting an employer final offer to a vote;

2. Interest arbitration (on agreement or imposed by the government); or

3. Strike/lockout.

The bargaining agent, Canada Union of Postal Workers (CUPW), proposed interest arbitration and Canada Post proposed a final offer vote. We now know that the federal government sided with the Canada Post proposal.

A final offer vote could put an end to this round of collective bargaining - if employees represented by CUPW vote in favour of the offer. However, if the final offer is not accepted by a majority of employees, bargaining will again be at an impasse. At that point, the parties could return to the bargaining table but only if the employer was prepared to improve its offer. The chances of a successful resolution after a failed final vote are slim to none, I suspect. That would leave the federal government with two choices - imposed interest arbitration or letting things run their course (i.e., a strike/lockout scenario).

Kaplan had some observations about the methods available to resolve the Canada Post dispute — and letting the parties sort it out through a strike/lockout process was the best of a bad lot of approaches, given the nature of the dispute.

Kaplan had the following to say about the interest arbitration option:

The interest arbitration option would ensure labour stability. Interest arbitration – and this is well known – is often a conservative process, one that generally shies away from imposing structural change. It is received wisdom that major change is best freely negotiated in the give-and-take of free collective bargaining (which may be aspirational for these parties). To pass constitutional muster, and meet the test of fairness and neutrality, any imposed interest arbitration process must preserve the independence of the arbitration board, and terms of reference must be carefully drawn to balance rights and interests. Having said all this, it is not apparent to me that interest arbitration will, or can, successfully address the issues in this Report. …

He also pointed out that a labour disruption may be the only way to reach agreement on the structural changes and trade-offs necessary for the survival of Canada Post. However, as he also pointed out, a labour disruption could lead to customers permanently deserting Canada Post - putting its survival at risk.

Kaplan recommended that if the strike/lockout route is the chosen route, the federal government should make it clear “at the outset” that it will not be interfering and that it is the responsibility of Canada Post and CUPW to mutually agree on the necessary changes to keep Canada Post operating. He also makes the following final point:

Government intervention – by outright engagement, or by the behind-the-scenes direction from the shareholder, to prevent or preclude labour disputes – has, to some degree, contributed to the current situation.

Dave Doorey, a professor of Work Law and Industrial Relations at York University, made this comment about Kaplan’s observation:

Kaplan is sending a shot across the bow here, warning government that it needs to resist the temptation to continue intervening in labour disputes. The message is clear: the government’s constant intervention through back-to-work legislation and the recent use of Section 107 directives to the CIRB is poisoning the bargaining environment. If the parties anticipate that ultimately the government will step in, one side (usually the employer) or the other will not bargain seriously. They will hold back and wait for the government to step in. Only if the parties know from the outset that this won’t happen will they get to work in finding a solution.

This also is not a new observation, but Canadian governments have in recent years seemed to have forgotten the lesson. Therefore, Kaplan is warning the government that it needs to make a choice, but if the choice is to permit the parties to duke it out, then it needs to stay out of it and announce its intention to not intervene in clear terms from the outset.

Doorey outlines the possible scenarios for interest arbitration (he was writing before the government’s announcement of a final offer vote - but the comments are still valid if the final offer is rejected by employees). He notes that Kaplan concluded that straightforward interest arbitration would unlikely provide the lasting structural change that is required. But there are risks in the government tailoring the interest arbitration process and directing consideration of structural changes:

A danger in this approach is that the more a referral to arbitration restricts the discretion of the arbitrator, the greater the chance a court will rule that the referral violates freedom of association guaranteed by the Charter. For example, back to work legislation introduced in 2011 to end a Canada Post work stoppage was ruled unconstitutional because it hamstrung the arbitrator’s discretion too much.

Professor Doorey suggests a tweak to the standard interest arbitration by providing an arbitrator with broad discretion “but direct the arbitrator to ‘consider the recommendations in the Kaplan Report’ in rendering their decision”. He notes that the following directions to an arbitrator in legislation ordering arbitration at Canada Post in 2018 was recently found to be constitutional by an Ontario court:

In rendering a decision or selecting a final offer under paragraph (1)(b), the mediator-arbitrator is to be guided by the need

(a) to ensure that the health and safety of the employees is protected;

(b) to ensure that the employees receive equal pay for work of equal value;

(c) to ensure the fair treatment of temporary or part-time employees, and other employees in non-standard employment, as compared to full-time, permanent employees;

(d) to ensure the financial sustainability of the employer;

(e) to create a culture of collaborative labour-management relations; and

(f) to have the employer provide high-quality service at a reasonable price to Canadians.

Professor Doorey suggests that similar language could be used, but with the additional parameter that “the arbitrator be guided by concerns raised and solutions recommended in the Kaplan Report”.

There are only seven recommendations in the Kaplan Report. Three of those recommendations are outside the control of the parties to the dispute (Canada Post and CUPW). The first recommendation is to amend the Postal Charter - which sets out the government’s expectations on service delivery. The second recommendation is the lifting of the moratoriums on rural post office closures and community mailbox conversions — moratoriums imposed by the government. The seventh recommendation is to amend the “time-consuming approval process for postage increases”, a regulatory process not in Canada Post’s complete control.

What we have is a multi-faceted problem - what has sometimes been called a “wicked problem”. Conventional dispute resolution processes may result in a settlement of sorts - but not a lasting resolution. Even if an agreement is reached in this round of bargaining, the structural problems may just be kicked down the road to be dealt with again in a couple of years.

We are all familiar with the definition of insanity - doing the same thing over and over again and expecting different results. I am actually not sure that it is an accurate definition of insanity - but it does describe many disputes. It seems that labour relations disputes at Canada Post have been going on forever. Perhaps consideration should be given to designing a different process for resolving labour disputes such as this one which engage the public interest and requires action by a third party (in this case, the federal government).

It is hard to design a new dispute resolution process on the fly, and I won’t try. But it does seem that we need a public (reasoned) debate about postal service expectations and the necessary tradeoffs. The question is who should be at the table? There are many stakeholders - governments, communities, corporate users of postal services, individuals, etc.

In the past, Canada has used Royal Commissions or Commissions of Inquiry to explore and make recommendations on issues of public importance. Kaplan’s report is a Commission of Inquiry - so, we can say we tried that. Kaplan’s report is a good starting point for a public discussion about postal service delivery in Canada. However, we need a process that leads to outcomes - ideally based on consensus about what postal service should look like in Canada and the tradeoffs that are needed. And with input from all of the stakeholders - employer, union, and consumers.

A failure to address structural issues that are beyond the ability of the parties to the collective agreement to resolve will lead to two possible outcomes: a debilitating strike/lockout or an agreement that will last only until its expiry - at which point it will be deja-vu all over again.

Rule of Law Watch

The Chief Justice of the Supreme Court of Canada, Chief Justice Wagner, had his annual press conference this week where he took questions from the media and made some general comments about the Rule of Law and some not-so-veiled comments about recent events in the United States:

Wagner said Canadians must be "prudent" and preserve their institutions, including a judicial system where rulings are respected by elected officials. "We have to be careful, but be optimistic as well.

"In Canada we have a strong legal system," he said. "We have to defend those institutions. We should not take anything for granted."

Wagner said, throughout his cross-country travels, "everybody asks me the same question" about whether what's going on in the U.S. courts system will bleed over into Canada.

What's different in Canada, Wagner said, is that the "main stakeholders" here "respect separation of powers and judicial independence and are happy to live in a country where the rule of law will prevail."

"Canada is not a superpower. But it is a democratic superpower. In this country, the rule of law is non-negotiable," he said.

Ontario has passed Bill 5, also called the Protecting Ontario by Unleashing Our Economy Act, that allows the government to create special economic zones, where cabinet can exempt companies or projects from having to comply with any provincial law, provincial regulation or municipal bylaw. Professor Doorey has explained the potential implications:

… Section 5 grants authority to Cabinet to exempt any designated project in a designated zone from any “requirements under provisions of an Act or regulation.” For example, the law permits Doug Ford to declare “Northern Ontario” a “special economic zone” and all mining there a “designated project”. Once those steps are taken, he can with the stroke of pen (a regulation), declare that the Employment Standards Act doesn’t apply to mining projects in the Northern Ontario. Section 6 makes clear that government can also just “modify” the application of some parts of legislation to a designated project, so rather than exempt the entirety of ESA, Doug Ford could just declare that overtime and hours of work laws don’t apply to the project. [emphasis in original]

Professor Doorey notes that collective bargaining rights would remain protected under the Charter (assuming that the provincial government does not invoke the notwithstanding clause), but he also notes:

However, there is nothing in the Charter that prevents the Tories from using Bill 5 to override worker protection statutes that do not engage collective bargaining and equality rights. For example, employment standards or health and safety legislation can be waived in whole or part in a designated area. The fact that some workers are covered by labour standards protections but not others does not violate the Charter, at least the courts have not found so to date.

Links of interest

Why ChatGPT won’t replace lawyers

The real disruption in law won’t come from some general AI chatbot spouting answers about everything and nothing. It comes from legal LLMs, which are large language models trained exclusively on legal data. The standard narrative that a one-size-fits-all AI will supplant lawyers is not just overhyped; it’s dead wrong.