Labour negotiations are likely to be peaceful and will involve few work stoppages in the year ahead, a new report by the Conference Board of Canada suggests.

According to the Conference Board’s Industrial Relations Outlook 2009: Managing Expectations in Uncertain Times, both labour and management are entering the bargaining period in a weakened state, for the first time in several decades.

The report notes that during past recessions, power has shifted towards management. In the current environment, however, deteriorating markets for companies’ goods and services has hurt profitability and eroded their bargaining power. In addition, labour has little bargaining clout since firms are facing such significant financial challenges.

Wages will be the top issue dominating negotiations this year, according to the report. It adds that until there is evidence of an economic recovery, there will be downward pressure on wage settlements for employers and unions going to the bargaining table. This will be true for both the private sector, due to lagging demand and export activity, and the public sector, due to declining revenue and higher infrastructure spending.

“Organizations in the hardest-hit sectors will be driven by the need to stay in business. Employers will focus on containing costs and improving productivity, while unions will struggle to save jobs,” the report says.

Other issues likely to arise this year include benefits, productivity, flexible work practices and employment security—an issue that often becomes a higher priority for unions during economic downturns.

Also underlying labour negotiations this is the reality that Canada faces a long-term deficit in its labour supply. “Immigration is the only way to offset the long-term decline in the workforce,” the Conference Board says.

The report notes that union membership in Canada is growing at a slower rate than employment levels. Canada’s unionization rate has fallen to 29.4%.

The report is based on a roundtable discussion of senior labour and management leaders in September, which preceded the two recent high-profile strikes at OC Transpo in Ottawa and York University in Toronto. Both strikes significantly affected their respective communities, the Conference Board says.

“These two lengthy work stoppages raise concerns about the relevance and effectiveness of the industrial relations system today and its ability to fully take account of all stakeholders’ concerns,” said Prem Benimadhu, vice-president of governance and human resource management at the Conference Board. “While most negotiations this year will likely be concluded without work stoppages, the existing adversarial industrial relations system does not meet multiple stakeholders’ concerns.”

Key rounds of bargaining set to take place this year include Air Canada, which will see its first round of unsupervised, free collective bargaining in 10 years in July, Canadian Pacific Railway’s rail traffic controllers, the government of Ontario, and the Canadian Federation of Nurses Unions.

IE