WDW 244H1F 2003W

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WDW 244H1F 2003W

• LABOUR RELATIONS
• Professor Frank Reid
• Centre for Industrial Relations
• Week 10
• 2003-11-13
• Strikes
• Course website http//individual.utoronto.ca/fran
  kreid

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Announcements 2003-11-13

• Makeup Tests returned at end of class tonight
• Midterm Key posted on course website
• Arbitration Assignment due R Nov 20, in class
• Lateness penalty
• 1 to 7 days 10 percentage points
• 8 to 14 days 20 percentage points
• TA Office hours SS 2115 or SS 2116
• Thursday 510 to 600, Nov13 20, 2003
• Midterm Scott Walsworth
• Email s.walsworth_at_utoronto.ca
• Arbitration assign Jonathan Eaton
• Email jonathan.eaton_at_utoronto.ca

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Strikes Outline

• Reference GPT Chapter 11
• What are Strikes / Lockouts ?
• Strike Activity Canada Ontario
• Strike Measures
• Functions of Strikes
• Strike Theories
• Determinants of Strikes Economic Non-Economic
• Dispute Resolution Procedures
• Effects of Policy Variables
• Consequences of Strikes

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The Systems Framework

• Outcomes
• Union Recognition and Security
• Collective Agreement
• Due Process
• Strikes / Lockouts

Ecological Economic Technological Political Le
gal Social

• Interaction
• Mechanisms
• Certification
• Bargaining
• Mediation / Arbitration

Govt
Goals Values Power History
Mgmt
Union
Feedback loop to Internal / External Inputs
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Strikes vs. Lockouts

• What are Strikes?
• Refusal to work by members of the bargaining
  unit.
• Strikes are carried out by employees with a
  common understanding and involves refusal to work
  and restricting/limiting output.
• What are Lockouts?
• Employer refuses to allow bargaining unit members
  to work.
• Lockouts are employers tactic to prevent
  employee from entering the workplace.
• Distinction between strikes and lockouts can be
  ambiguous, - strikes means strikes and
  lockouts in this section

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Measuring Strike Activity

• Components of strike activity
• Frequency Number of strikes per year
• Size Number of employees involved in each strike
• Duration Length of the strike in days
• Volume
• Person days lost Frequency x Size x Duration
• Relative measure of strike activity in the
  economyPersons days lost as a proportion of
  working time

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2002 Strike data

• 2002 (strikes involving one or more EEs)
• Number 294 strikes
• Size 571 EEs/strike
• Duration 18.0 days/EE
• Volume 3,028,423 days lost
• Percent Worktime 0.09

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2002 Strike data (500 EEs)

• 2002 (strikes involving 500 or more EEs)
• Number 32 strikes
• Size 4,516 EEs/strike
• Duration 16.1 days/EE
• Volume 2,320,744 days lost
• Percent Worktime 0.07

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Days Lost Due to Work Stoppages
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Strike Activity 1990 to 2002
Source HRDC, Labour Program, Workplace
Information Directorate reflects Jan-Mar only
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Strike Activity - Ontario

• During 1980s and 1990s, days lost as a of
  working time declined in Ontario
• 1970s generally exceeded 0.20
• 1990s generally less than 0.10
• Withering away of the strike?Reduction due to
  shorter duration and lower number.
• Note 0.40 days lost as of working time
  corresponds to about one day lost per year
  (assuming 250 working days per year)

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In the Eyes of the Beholder...

• The BC Teachers Strike
• Employer perspective
• 4.4 million student days lost due to teacher
  strikes in the last nine years.
• (550,000 students) (8 days teachers on strike
  in last 9 years) 4.4 million student days on
  strike.
• Employee perspective
• There were 1 billion student days in the last 9
  years.
• So 4.4 million student days translates to 0.4
  of student days lost to strikes.

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In the Eyes of the Beholder...

• Students lost more days due to the flu than
  from teacher strikes
• 4.4 million days 550,000 students 9 years
• 0.88 days per year lost per student

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Functions of Strikes

• To fight for better wages, job security and
  working time.
• Reflect pent-up and unresolved grievances.
• Used by union leaders to solidify the rank and
  file.
• To establish or enhance reputation for subsequent
  rounds of bargaining.

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Strike Theories

• Union Power Theory
• Strike activities increase with union power.
• A theory of wages, not of strikes increase in
  power wont affect likelihood of strikes/lockouts
  if the both parties recognize the change in
  power.
• The Joint-Cost / Divergent Expectation Theory
• Strikes are less likely when they are more costly
  to both parties.
• Strikes are more likely the greater the
  divergence in expectations of outcomes between
  the parties.
• The Asymmetric-Information Theory
• Assumes one party (management) has private
  information on the state of the product market.
• Purpose of strike is to elicit private
  information.

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Determinants of Strikes

• Two types of factors
• Economic
• Non-economic

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Economic Factors

• Economic factors explains frequency better than
  size and duration the Business Cycle.
• Frequency is pro-cyclical to the business cycle
• Strikes more frequent low unemployment and high
  profits.
• Strikes less frequent high unemployment and high
  inflation.
• Duration counter-cyclical to the business cycle
• Hazard rate measures strike duration by
  examining strike settlement probabilities as a
  strike progresses.
• In general, the probability of settling the next
  day (or the hazard rate) declines as the strike
  proceeds.
• Decreases at peak of business cycle.

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Non-Economic Factors

• Worker and Community Characteristics
• Individuals frustration over the gap between
  expectations and reality.
• Group solidarity.
• Strike activities increase in a pro-labour
  political environment and vice versa.
• Union Management Organization Characteristics
• Intra-organizational conflict.
• Inadequate decision-making authority.
• Foreign ownership and multinationals.
• Size and number of bargaining units.

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Non-Economic Factors

• Negotiator Bargaining Process Characteristics
• Union and management trust or hostility.
• Negotiator skills and experience.
• Bargaining History
• Past struggles may exacerbate subsequent
  conflict.
• Negative experience may also discourage
  subsequent conflict, ie. the teetotaler effect.
• Evidence long strikes have teetotaler effect
  while short strikes will lead to more strikes in
  subsequent rounds.

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Legality of Work Stoppages

• When are work stoppages illegal in Ontario?
• Before a union is certified.
• During the term of a collective agreement.
• Before the passage of compulsory conciliation and
  the cooling-off period.
• Before a strike vote where a majority of the
  employees are in support.

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Dispute Resolution Procedures

• Compulsory Conciliation
• Government-appointed conciliator who meets with
  the parties and reports the possibility of a
  settlement.
• Parties in legal strike/lockout position after
  no board report is filed and 17 days of cooling
  off period.
• Mediation
• Takes place after the conciliation process and
  possibly during a strike.
• Neutral third-party who suggests compromises and
  proposes possible settlement terms.

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Dispute Resolution Procedures

• Fact Finding
• Fact-finder investigates the dispute and makes
  formal recommendation to the Board.
• Interest Arbitration
• Decision to engage in arbitration may be
  voluntary but arbitration decision is binding.
• Interferes with genuine collective bargaining
• Chilling Effect
• Narcotic Effect

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Dispute Resolution Procedures

• Back to Work Legislation
• Requires termination of a strike and force
  parties back to bargaining.
• Used in the public sector, eg. Toronto outside
  workers in July 2002.

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Effects of Policy Variables

• Effects of policy variables on strike activities
• Decreased likelihood of strikes
• Prohibition of right to strike in the public
  sector.
• Conciliation officer / board.
• Mandatory strike vote
• Dues checkoff
• Increased likelihood of strikes
• Cooling-off period
• Employer-initiated vote option
• Ban on replacement workers

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Consequences of Strikes

• On Wages
• Costs of strike are outweighed by wage gains in
  short strikes, but not longer ones.
• Evidence See Reid and Omar (1992) CIRA
• Do Unions Win Short Strikes
• and Lose Long Ones?

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Do Unions Win/Lose S/L Strikes?

• Reid and Omar (1992) CIRA
• Definitions
• Win benefits exceed costs
• Wage gain final settlement employers last
  offer
• Factors considered
• Replacement Income
• Offset factors, strike pay alternate
  employment.
• Dissipation rate of wage gains
• Discount rate
• Time horizon of continuing employment

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Do Unions Win/Lose S/L Strikes?

• Findings
• Using a discount factor of 5, net benefits range
  from 20K loss to a gain of gt35K per employee.
• The mean net benefits (with no dissipation)
  3,620 per employee.
• Wage gain (Present Value) 5,647
• Earnings loss - 4,072
• Replacement income (offset factor) 1,758
• Strike pay 287
• MEAN NET BENEFITS 3,620

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Do Unions Win/Lose S/L Strikes?

• Findings
• Calculations are sensitive to the dissipation
  rate but not to the discount rate.
• Clear negative relationship between length of
  strike and mean net benefits
• The longer the strike, the lower the net
  benefits.
• Mean net benefits in short and medium strikes
  gt5,500 per employee.
• Mean net benefits in long strikes 500 per
  employee.
• Support the industrial relations adage that
  unions win short strikes and lose long ones.