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**RESPONDING TO CHANGE IN THE WORKPLACE:**

**INNOVATIONS IN LABOR-MANAGEMENT-GOVERNMENT COOPERATION**

**Long Term Collective Agreements : New Approaches in Labour Relations
in Quebec**

### 

# **CANADA**

June 25 -- 26, 2001 Mexico City, Mexico

**[APEC HUMAN RESOURCES DEVELOPMENT WORKING GROUP]{.underline}**

**RESPONDING TO CHANGE IN THE WORKPLACE:\
INNOVATIONS IN\
LABOR-MANAGEMENT-GOVERNMENT COOPERATION\
\
\
Mexico, June 25-26, 2001**

***Long Term Collective Agreements\
in the Context of New Approaches in Labour Relations\
in Quebec***

**prepared by : Dr. Dalil Maschino\
Jean-Francois Boivin\
Renée Laflamme**

**Quebec Department of Labour\
(Canada)**

# **TABLE of CONTENTS**

INTRODUCTION [3](#introduction)

1\. EMERGENCE OF A "SOCIAL CONTRACT" IN THE EARLY 1990s
[3](#__RefHeading___Toc515943981)

1.1 The "social contract" model [4](#__RefHeading___Toc515943982)

1.2 Emergence of new approaches in labour relations and work
organization [6](#__RefHeading___Toc515943983)

2\. MEASURES TAKEN BY PUBLIC AUTHORITIES TO ACCOMPANY THE EMERGENCE OF
THE NEW WORK RELATIONS APPROACHES [8](#__RefHeading___Toc515943984)

2.1 Elimination of the three-year maximum term imposed upon collective
agreements [8](#__RefHeading___Toc515943985)

2.2 Evolution of long-term collective agreements in Québec
[9](#__RefHeading___Toc515943986)

2.3 Accompanying services provided by the ministère du Travail
[11](#__RefHeading___Toc515943987)

3\. THREE EXAMPLES OF LONG-TERM COLLECTIVE AGREEMENTS
[14](#__RefHeading___Toc515943988)

3.1 Alcan Aluminium Limited [14](#__RefHeading___Toc515943989)

3.2 Sucre Lantic ltée [19](#__RefHeading___Toc515943990)

3.3 The Nortel Networks Corporation [24](#__RefHeading___Toc515943991)

CONCLUSION [27](#conclusion)

# *Long-term Collective Agreements -* 

# *New Approaches to Work Relations in Québec*

### INTRODUCTION

This presentation concerns the long-term collective agreements which
have emerged in Québec in the last decade, by putting them back in the
context of the wishes of the parties to further consensus-building
within the firm[^1]. In particular, this text stresses that an extension
of the terms of collective agreements must be accompanied by changes
based on a constructive dialogue and lasting consensus-building so that
both parties can truly benefit. However, this generates an increased
demand for the support of third parties, especially for the preventive
interventions offered by the Ministère du Travail.

The first section reminds us that "social contracts" emerged following
pressures on public authorities to deregulate work and, subsidiarily, in
the framework of the emergence of new approaches to work organization
and relations in the early 1990s.

The second section describes two measures introduced by public
authorities during the last decade, which were meant to further this
development. The first one discusses a statutory amendment introduced in
the *Labour Code* to abolish the three-year maximum term imposed on
collective agreements. The second one concerns the addition of
preventive services by the Direction des relations du travail of the
Ministère to make it easier to start or maintain a consensus-building
approach between management and union within the firm. This section ends
by pointing out that "social contracts" disappeared after a statutory
amendment allowed the parties to sign long-term collective agreements.
Finally, the third section gives three examples of long-term collective
agreements recently signed in Québec, calling attention to their links
to the evolution of work relations within these companies.

[]{#__RefHeading___Toc515943981 .anchor}1. [EMERGENCE OF A "SOCIAL
CONTRACT" IN THE EARLY 1990s]{.underline}

In the early 1990s, the economic environment was being radically
altered. These changes were the source of uncertainties for companies
and unions which had favoured the signing of "social contracts"
revolving around points that were not covered by collective agreements,
such as investment, financial performance transparency, job stability,
occupational training, total quality programs, organization management
flexibility, etc. Moreover, these "social contracts" were for much
longer terms than the three-year upper limit provided for collective
agreements. This explains why it was generally specified in these social
contracts that the parties accepted to renew the current collective
agreement upon expiration.

To illustrate the changes that occurred in the economic environment of
the period, we may remember that the Free-Trade Agreement between Canada
and the United States had just recently come into force (1989). It was
followed by the North American Free Trade Agreement (NAFTA) which was
signed at the end of 1992, while the Uruguay Round of Trade Negotiations
was concluded in 1994. The strenghtening demands of technological
changes forced companies to plan very large investments in order to
carry out strategic redeployment, modify the work organization and
regularly improve the quality of their operations and products[^2].

Moreover, to the capital cost fluctuations in the framework of a
monetary policy where interest rates were used to control inflation were
added the uncertainties generated by the transformations of the economic
environment. In this connection, establishing long-term "social peace"
was an important variable on which the companies could still act to
reduce their investment risks and ensure the continuity of their
operations.

On the other hand, the recession which was then affecting Canada
resulted in the loss of 1.2 million jobs between July 1990 and March
1992[^3]. Later on, the swiftest growth was seen in part-time jobs and
self-employment. In fact, the total number of self-employed workers went
from 1.8 million in 1990 to 2.1 million in 1995[^4], an increase of
300,000 units, while during the same period the total number of salaried
employees had risen by 100,000 units. The protection of salaried
employment was brought at the forefront of union concerns.

[]{#__RefHeading___Toc515943982 .anchor}1.1 [The "social contract"
model]{.underline}

The economic environment of the period therefore contributed
significantly in defining the bases of the "social contract". For
companies, these agreements were intended to promote investments by
lowering the risks associated with wage settlements and by minimizing
the possibilities of extended production stoppages. For the unions, such
investments contributed to job protection and job creation.

These "social contracts" co-existed with the current collective
agreements which continued to regulate remuneration, personnel
movements, settlement of grievances, procedures, etc. The links between
these two documents were clarified by means of letters of agreement
approved by the parties.

Generally speaking, by signing a "social contract" both parties were
agreeing to get along well during an extended period, thereby assuring
the employer that he would get a return on his investment and
guaranteeing the unions a certain job stability. However, the parties
were aware that to achieve productivity and employment goals, other
measures were needed to improve the firm's operation. This is the reason
why the "social contract" was not limited to signing a long-term peace
settlement. It also concerned various aspects of work and management
organization.

In 1992 the Québec ministère de l'Industrie, du Commerce et de la
Technologie released a model of social contract[^5] intended to promote
this approach and to promote investments. However, this model only had
an incentive value; the unions and the companies could use it as a
framework, particularly when requesting official investment assistance.
This standard social contract included seven components covering the
main elements that a firm should promote to set up high productivity
work premises.

The components of this reference model revolving around *flexibility and
mobility in the organization* and on *total quality* were mostly aimed
at improving the reactivity of organizations and the quality of their
production process. The aspects dealing with *work relations stability*
and the *joint management of the agreement* were aimed at establishing a
climate that would guarantee the continuity of the firm's activities.
Finally, the components of the contract concerning *job stability*,
*human resources development* and *economic transparency* were intended
to foster the employees' active endorsement of these long-term
agreements.

At the time, two factors generally triggered the negotiation of these
"social contracts". First, the companies were planning to make large
investments. Secondly, the management and the union considered that it
was necessary to solve what was considered as a major problem for the
institution's operation.

The second triggering factor varied according to the companies. In the
cases they studied the researchers found that some factors involved
persistent conflicting elements in the work relations, others the
adaptation of skills to planned technological changes, the increased use
of equipment, the introduction of more flexibility in job assignments,
the introduction of compressed schedules, the reduction of weekly
workdays, etc.

In the mid 1990s, there were approximately seventy "social contracts" in
Québec. The vast majority of them concerned the manufacturing sector,
although others were found in the areas of transport and distribution
(telephone, gas, electricity)[^6].

"Social contracts" are at the source of the pressures exerted by
companies to change the *Labour Code* provision limiting to three years
the maximum term of a collective agreement. At the time Québec was the
only one in North America imposing this legal constraint. Finally, in
certain cases the ministère du Travail was asked by the management and
the unions to help improve the working climate needed to develop "social
contracts". These two points are dealt with in the following sections.

[]{#__RefHeading___Toc515943983 .anchor}1.2 [Emergence of new approaches
in labour relations and work organization]{.underline}

"Social contracts" were part of a wider movement involving the
transformation of work relations within companies[^7]. From the
management's standpoint the interest for innovative practives in a job
environment was linked to the fact that an increasing number of firm
officials considered that transformations in the work organization were
needed to achieve the restructuring of their production process[^8].
Thus, to achieve these organizational transformations, what was needed
was to avoid the union's opposition and to obtain the active
participation of salaried employees.

During that period Québec's trade union groups were in favour of new
organizational forms if these were accompanied by a consensus-building
approach[^9]. They saw in it a path that led to an increased autonomy
for employees in the performance of their duties, thus promoting
versatility and occupational training and improving the union's
participation in the life of the institution. Furthermore, in the
companies themselves the local unions were often divided between caution
and the wish to be involved in the organizational changes proposed by
the management[^10]. However, this shift towards work relations adapted
to more efficient organizations required to call into question the
traditional model of work relations existing between labour unions and
employers[^11]. Consensus-building was increasingly seen as an
"economical alternative" that could benefit both parties.

For instance, in the case of "social contracts" the climate and dynamics
of the relations between management and union were being directed
towards dialogue and the concerted resolution of problems, since the
practice of resorting to a power relationship (strikes, pressure
tactics) was becoming unusable due to the lengthening of the terms of
group contracts. Moreover, for the companies' management, long-term
agreements fell within the scope of working process transformation,
which required the adherence of the employees.

In Québec the willingness to establish a management-union dialogue
concerning the new job environment approaches found expression in 1995
with the implementation of a working group within an advisory agency. It
included the main management and labour unions appointed to advise the
Minister of Labour. Two years later, the working group released a
document which, for the first time in North America, reflected a vision
shared by both management and unions concerning the goals, means and
approaches that needed to be adopted to change the organization and work
relations within companies[^12].

[]{#__RefHeading___Toc515943984 .anchor}2. [MEASURES TAKEN BY PUBLIC
AUTHORITIES TO ACCOMPANY THE EMERGENCE OF THE NEW WORK RELATIONS
APPROACHES]{.underline}

The emergence of the new work relations approaches mentioned earlier
prompted public authorities to take various measures to take into
account the new needs of social partners. We are presenting two of them,
which are related to the subject of this document, which is the
development of long-term agreements between employers and unions. The
first one concerns the elimination of the three-year maximum term
imposed upon collective agreements by the *Labour Code*. The second one
refers to the increase in the range of services of a preventive nature.

[]{#__RefHeading___Toc515943985 .anchor}2.1 [Elimination of the
three-year maximum term imposed upon collective agreements]{.underline}

We already mentioned that "social contracts" did not replace collective
agreements. However, in this document the signataries pledged to renew
the current collective agreement upon expiration and to waive
bargaining, striking and lock-out rights for periods exceeding the
three-year limit imposed by law. Several "social contracts" were signed
for six-year terms.

The seventy existing "social contracts" in the early 1990s were thus
vulnerable to the complaints that could be filed by any party to such an
agreement. This potential problem, combined with the growth of a school
of thought proposing prescribed relief, prompted employers to request
that the provision of the *Labour Code* limiting the term of collective
agreements to three years be amended.

Therefore, one of the amendments introduced in the *Labour Code* in May
1994 abolished the maximum term limit for collective agreements[^13]. At
the time, employers were in favour of this change because they saw it as
a measure to promote industrial peace, operational stability and better
forecasting capability in regard to long-term labour costs.

As for the unions, the labour confederation grouping together the
greatest number of unionized employees, the Fédération des travailleurs
et des travailleuses du Québec (FTQ), did not object to this change. On
the other hand, another large central labour body, the Confederation of
National Trade Unions (CNTU), feared that extending the statutory term
of collective agreements would restrict several of the employees'
rights, including their right to choose a union affiliation freely
within a reasonable period, and their bargaining right[^14].

In point of fact, the 1994 reform modified the periods during which
employees could vote to change their union affiliation. Previously this
possibility was offered during the third month preceding the expiration
of a current collective agreement, that is to say, every three years at
the most. After this legislative modification the union affiliation
became fixed for a longer period. For instance, for a seven-year
collective agreement it was specified that the period for a change of
affiliation began six and a half years after the agreement was signed.

Furthermore, union representatives expressed the fear that this legal
change would induce employers to set up company unions in order to sign
with them a long-term social peace, thereby protecting themselves
against more militant unions. Finally, the last argument against this
change was the following: the possibility of signing employment
contracts lasting more than three years would cause the union to lose a
lever allowing it to include in a social contract new fields related to
work organization or work relations.

[]{#__RefHeading___Toc515943986 .anchor}2.2 [Evolution of long-term
collective agreements in Québec]{.underline}

The number of collective agreements whose term exceeded the three-year
limit imposed by law before 1994 has risen sharply in the past six
years. Thus, in 1995, on a total of 2,066 collective agreements signed
in Québec during that year, 22% had a term of 3 years or more. In 2000
this ratio had increased to 40%[^15]. Therefore, the average term of the
collective agreements signed during the course of a year had risen from
37 months in 1994 to 42 months in 1999.

When collective agreements are divided up into three groups, short-term
(three years or less), average (from more than three years to less than
five) and long-term (five years or more), we find that they have been
stabilizing since 1998. This distribution is not affected by the
affiliation to a labour confederation or by the sector of economic
activity. Thus, in 2000, it was noticed that 60% of the agreements
signed during that year were of the short-term type, 23% of the average
type and 17% of the long-term type[^16].

In fact, the biggest increase occurred in the case of collective
agreements with a term of more than 5 years: the number of agreements
signed every year went from 89 in 1994 to 303 in 1996 to a high of 366
in 2000 (17% of all agreements signed). However, these long-term
collective agreements do not have the same characteristics as the former
"social contracts", contrary to what those experiments of the first half
of the 1990s would suggest. Thus, the provisions that were found in the
"social contracts" concerning training, job stability, financial
performance transparency, total quality, to name a few, are not
generally found in long-term collective agreements. Several factors can
explain this.

The economic recovery will probably have caused the disappearance of the
feeling of emergency and crisis that led to the creation of these
"social contracts"[^17]. It is also possible that part of the motivation
for entering into "social contracts" dealing with such varied subjects
stems from a concern to distinguish this type of contract from
collective agreements in order to avoid raising issues regarding the
limitations to the maximum term of an agreement.

Finally, in may be that, based on experience the parties decided to
retain in long-term collective agreements only those social contract
provisions which could be applied without major difficulties,
considering the experience requirements for this new type of partnership
relations. This could explain, for instance, the absence of provisions
concerning, among other things, joint management or flexibility and
mobility within the organization.

Finally, the data collected and the accounts recently presented by union
and management representatives in a Parliamentary Commission held in the
summer of 2000 indicate that the fact of extending the term of
collective agreements did not translate into marked differences in wage
increases or in the power relationships between employers and unions. In
other words, the amendments introduced in the *Labour Code* in 1994
apparently met the employer's expectations without any of the
undesirable effects the unions were dreading[^18].

On the other hand, the accompanying services introduced by the Ministère
in the context of the new work relations approaches, specifically to
facilitate the steps taken by partners wishing to sign a "social
contract", are still useful for parties entering into long-term
collective agreements today. In fact, the mediation services of the
Ministère were sought occasionally during the working-out of "social
contracts" involving large investments. Subsequently, when long-term
collective agreements started expanding rapidly the Ministère also had
to intervene in several cases, particularly to help the parties preserve
a good working climate within the firm for the term of the agreement.

[]{#__RefHeading___Toc515943987 .anchor}2.3 [Accompanying services
provided by the ministère du Travail]{.underline}

The emergence of new organization and work relations approaches in the
early 1990s reinforced among employers and unions the importance of an
ongoing dialogue within the firm to avoid systematic confrontations.

This new type of approach to work relations is particularly suited for
the context of long-term collective agreements. As a matter of fact, in
an environment where nothing can change for a long time if one of the
parties refuses to negotiate certain adjustments, any standstill could
degenerate into conflicting and unproductive relations. Furthermore,
long-term collective agreements are generally accompanied by
modernization investments. This often leads to working process
reorganizations whose success depends on the involvement of employees
and their union. In this context the classic approach to negotiations
with its "winner-loser" position and orientation could lead to a lasting
dead-end situation.

This is the reason why job environments began showing an increased
interest for negotiation based on interests (NBI) and problem
solving[^19]. However, many companies and unions did not have the means
to call upon a consultant in order to learn about the benefits and
characteristics of this method. Moreover, turning to the NBI requires
that a climate of confidence has first been established between the
parties[^20], which can represent an obstacle to the adoption of this
type of collective agreement method.

These factors have led the Ministère du Travail to broaden its service
offer to help parties improve the climate of confidence and the dialogue
necessary for the preservation of non antagonistic work relations. Such
interventions can faciliate the signing of a long-term collective
agreement just as they can support the parties during the period of the
agreement.

These services are offered by the Direction de la prévention et des
partenariats. Its mandate is to develop and offer various types of
preventive interventions to employers and unions wishing to improve the
quality of their work relations while promoting better daily work
relations within the firm or institution. These interventions are
voluntary and are carried out outside of the collective agreement
framework[^21] by mediators from the Ministère.

Thus, negotiation based on interests introduces the parties to the
principles, stages, characteristics and approach of NBI. Subsequently,
the mediator from the Ministère may accompany the parties who decide to
use this method when they negotiate their collective agreement. Other
services apply specifically to the parties bound by a long-term
collective agreement, because preserving good work relations is
particularly important at that time.

Such is the case with preventive mediation intervention: it aims at
drawing a consensus between the parties, without blame and outside of
the negotiation, based on a diagnosis made separately by each of them.
The work relations seminar (3 or 4 days) comes within the same
perspective: it seeks to improve relations between the management and
the union executive. Within the next pages of this report, you will find
a presentation of the intervention made at the request of the union and
management of the Alcan firm. As for the pre-arbitral mediation service,
it allows the parties to seek mutually satisfying solutions to
grievances by saving on the time and costs incurred when an arbitrator
has to be called.

The assistance provided for setting up a work relations committee is
another service offered by the Ministère to encourage parties to quickly
solve their problems related to the operation of collective agreements.
The training provided to representatives of the union and management
revolves around problem solving methods, the role of efficient
communication, consensual decision-making and meeting presentation
skills.

However, by and large these interventions remain modest in the field of
industrial relations in Québec even though they may be crucial for the
parties involved. For instance, every year between 2000 et 2500
collective agreements are signed. In 2000, 2166 of them were signed.
That year the ministère du Travail performed 473 classic conciliation
interventions. On the aspect of prevention the Ministère performed a
total of 52 interventions, mostly preventive mediation interventions and
work relations seminars.[^22]

[]{#__RefHeading___Toc515943988 .anchor}3. [THREE EXAMPLES OF LONG-TERM
COLLECTIVE AGREEMENTS]{.underline}

The examples described below shed light on the relationship between
long-term collective agreements and the working climate which prevails
in each of these Québec institutions. They also point out that the
extension of the duration of collective agreements occurred at the same
time as other important transformations in the firm's work
relationships.

[]{#__RefHeading___Toc515943989 .anchor}3.1 [Alcan Aluminium
Limited]{.underline}

The Alcan group is a multinational firm that produces aluminium in over
30 countries, with close to 33,000 persons on its payroll. In Canada,
the Alcan Smelters and Chemicals Limited (the *SÉCAL*) manages the
aluminium and chemical plants of Eastern and Western Canada. SÉCAL is
the largest Alcan subsidiary. The Alcan staff unions are grouped
together within the Fédération des syndicats du secteur aluminium (FSSA)
which represents close to 4400 employees. These employees are mostly
from the Saguenay-Lac-St-Jean region and are members of the Syndicat
national des employés de l'aluminium d'Arvida (SNEAA)[^23], a union
affiliated with the FSSA.

In 1998 the SÉCAL, SNEAA and the other FSSA unions signed a framework
agreement which involved maintaining operational stability for an
eigthteen-year period, thus providing for the uninterrupted maintenance
of the operation and customer service and ruling out strikes and
lock-outs. This agreement, similar to the collective agreements signed
by this union federation, was key to the fulfilment of a program of
massive investments intended to modernize the firm's equipment.

##### *Foundations of the agreement*

During the second half of the 1990s SÉCAL was considering making
investments evaluated at \$ CDN 1.2 billion. Its hesitations to invest
in such a project had to do with the poor working climate existing at
the time. Since 1991 the prevailing mood of work relations with the
union in discussions concerning employment, call-back terms and
conditions and employee participation was one of confrontation.
Moreover, the 1992-1995 collective agreement was marked by a vast number
of unsolved problems and consequently, by a growing number of
grievances. In 1995 a five-day strike allegedly cost the firm \$ CDN 150
millions due to the fact that the ovens were stopped and the tanks had
to be cleaned before the operations could resume.

In a context where Alcan customers use the tight flow method and do not
store their intermediate products, a breakdown in deliveries could have
very serious consequences commercially speaking. Therefore, Alcan wanted
to obtain guarantees of operational stability before making massive
investments.

For its part the union also hoped that these investments would be made
since this would guarantee a significant number of jobs in the region,
and also allow for its goal to be met, that is, to process locally more
of Alcan's semi-manufactured goods.

In the early part of 1997 Alcan's management decided to redefine its
approach and the type of relation it wished to maintain with the SNEAA.
The latter agreed to undertake a joint and exploratory approach in view
of the potential issues concerning the region's employment. Several
specialists were consulted concerning the benefits and disadvantages of
a long-term collective agreement. One of them advised the Alcan
management and the union not to embark on anything before making a
diagnosis of the status of their relations; this was in the context of a
seminar organized in that behalf by mediators from the ministère du
Travail.

##### *The role of mediators in the common approach of both parties* 

The four-day seminar provided by two mediators took place in February
1997. The arrival of new employer and union officials was one of the
triggering events that proved crucial in the decision to change the
culture of work relations within the firm. Twelve union officials
attended the seminar; each local plant had the same number of management
representatives.

The first day was devoted to the definition of the ideal status of work
relations according to the parties. Union and management
representatives, gathered in two different rooms with a mediator, gave a
description of this ideal. Then, a joint meeting was held so that they
could share their respective ideals for the first time. Subsequently
each group withdrew once again to examine in detail, discuss and comment
a list of the work relations characteristics desired by the other party.
At the end of the day a second joint meeting was held to allow for the
common points and complementarities of their respective ideal vision to
be brought up.

The theme of the second day concerned the diagnosis of work relations
within the firm. The method was the same: meetings in two separate
groups alternating with a joint assembly. The purpose of the last
meeting of the day was to identify common statements made on the
negative aspects of the work relations status.

The third day meeting dealt with the issue of identifying the actions to
be taken by both sides to improve the status of work relations, using
once again the alternation of "ex parte" meetings with meetings that
brought the two groups together. Finally, the fourth day was devoted to
the presentation of the results of the meetings to the employees, and to
setting up a follow-up committee dedicated to the action plan and the
assessment of results.

##### *Consolidation of consensus-building relations*

This seminar allowed officials of both parties to understand the
importance of being committed to an ongoing negotiation process for the
purpose of problem resolution, in order to establish a climate of
confidence and mutual respect to guarantee a long-term parnership
approach. To this effect they set up three committees.

A committee called the "4-4 committee", composed of the management and
union representatives of 4 plants of the Saguenay-Lac-Saint-Jean region,
gives priority to solving the problems occurring on the floor of the
plants. It also deals with the implementation of the action plan
developed by the "12-12 committee" and meets 5 or 6 times a year.

A second committee, called the "12-12 committee", groups together people
who attended the seminar given by the mediators from the Ministère du
Travail. It is responsible for the development of the action plan
respecting the implementation of the changes planned within the firm,
and also for taking stock of the work relations. Moreover, this is what
allows it to enrich and adjust the action plan. Finally, there is also a
business committee which is more involved with the development of the
main orientations.

To ensure the smooth operation of the two first committees the parties
have agreed to be accompanied by a "facilitator". This external
consultant chosen by both parties draws up the agenda of the meetings
after consulting with the management and the union executive. During the
meetings or through "ex parte" get-togethers he also ensures that the
parties maintain an approach focused on understanding and solving
problems without getting sidetracked into personalizing the discussions
or the issues.

##### *The eighteen-year framework agreement*

In 1998 a framework agreement concerning operational stability was
signed between Alcan Smelters and Chemicals Limited (SÉCAL), and each of
the unions for a period covering the expected term of the firm's
modernization program. The collective agreement that accompanies it has
a five-year term and expires at the end of 2003.

This agreement states that the parties undertake to make every effort to
ensure the renewal of collective agreements without having to turn to
traditional power relationships such as strikes, lock-outs or pressure
tactics. It also specifies that the parties agree to promote a
co-operative approach in discussing the orientations.

The involvement of employees, specifically through work teams,
information concerning business issues and planning of manpower
requirements, is also part of this framework agreement. Finally, the
principles of a fair internal remuneration based on a common system of
job assessment and a competitive global remuneration are also part of
the framework agreement.

The action plan that accompanies the signing of these documents concerns
the settlement of accumulated grievances and of their causes, as well as
the diversion of work relations (future grievances, occupational health
and safety problems). Moreover, the state of the grievance situation,
the number of grievances as well as the way in which they are settled
are used as a barometer for the status of work relations.

Recently some changes were made in the management of the union and the
firm. The new officers did not participate in the approach described
earlier which was aimed at giving a new orientation to existing work
relations in the firm. Thus, a new problem has just emerged concerning
the transmission of the expertise and consensus-building culture
introduced by their predecessors. These new interlocutors are facing a
major challenge with regard to the continuation of this constructive
approach, at a time when pension fund surplus bargaining and job
evaluation leave them little time to familiarize themselves with these
new work relations approaches.

[]{#__RefHeading___Toc515943990 .anchor}3.2 [Sucre Lantic
ltée]{.underline}

Sucre Lantic ltée refines and distributes refined sugar and brown sugar
for the Eastern Canadian market. It currently employs 350 people. The
plant's most important union includes 215 members mostly working in
production. This union signed a ten-year collective agreement which
became effective on May 20, 1998 and which expires on February 28,
2008[^24].

This ten-year agreement was negotiated in a context where the firm's
owners were planning to shut down this institution. In this case, the
Ministère du Travail was not approached by the parties. On the other
hand, the possibility of a shutdown of the institution allowed the
parties to request the establishment of a Comité d'adaptation de la
main-d'œuvre \[*Manpower Adjustment Committee* (CAMO)\]. The purpose and
the terms of this public support are described further on.

Formerly, collective agreements were signed for two years. The extension
of the term of the agreements was part of a package of measures and of
the review of working processes developed jointly by the parties for the
survival of the institution. The interest of this long-term collective
agreement lies more in the steps that preceded its signature than in the
clauses of the agreement itself.

######## Main observations concerning the long term

The signing and implementation of the collective agreement required a
prior approach adopted by the two parties: expressions of good faith and
openness, a willingness to change, the establishment of a climate of
confidence, transparency, employee accountability, etc. Furthermore,
this approach was carried out by dynamic senior management intent on
promoting these new values, on the side of the union as well as that of
the employer. These two factors played an important role in the
preservation of a climate conducive to the smooth implementation of the
collective agreement ever since its signature in 1998.

The term of the collective agreement is one of the elements which
allowed the employer to maintain the plant's activities, make savings on
the administrative level, preserve stability while keeping an eye on the
payroll expenditure evolution, be more flexible in the management of
human resources, improve the volume of production and finally, invest in
large expansion projects without the fear of slowdowns caused by
possible labour disputes.

For unionized employees the primary motivation was to preserve jobs by
avoiding the shutdown of the plant. Although many concessions were made
on paper as to salaries and social benefits, vacation periods, mobility
within the firm, terms of temporary layoffs and job guarantee, the true
impact on the employees was moderate because of the counterbalancing
measures taken by the management.

Disputes are settled according to the ad hoc model by means of formal
meetings between representatives of the parties, which can lead to
letters of agreement. Moreover, a union representative was freed
full-time to make preparations for and attend these meetings.

In this firm the progress towards a partnership culture, combined with
the willingness to show flexibility during the bargaining process helped
prevent a deterioration of the working climate before the far-off
expiration of the collective agreement. In fact, it is as if the
collective agreement remained open since the negotiations were settled
through letters of agreement.

# *The context before the signing of the collective agreement*

During the 1994-1997 period the main Canadian competitor of the firm had
doubled its production and acquired a larger part of the market. Sucre
Lantic ltée was forced to close one of its two institutions, either the
Saint-Jean (Nouveau-Brunswick) or the Montréal institution. Reacting to
this news, the two plants became competitors in order to increase their
production and ensure profitability in order to prevent the impending
shutdown of one of the institutions.

Several means were thus implemented: improvement of working processes,
reduction in production and labour costs, development of new operation
and marketing plans, etc. The institution located in New-Brunswick as
well as the competitor's institution already had a long-term collective
agreement.

######## The steps taken in Montréal

The years preceding the signing of the long-term collective agreement
led to a drastic change in work relations, which went from a very
conflictual approach to a more «reasoned» mode of operation. To achieve
this aim both parties needed to take concrete action.

With regard to the employer, a promotional campaign for ten new values
was carried out at all levels of the firm's structure (confidence,
transparency, integrity, the right to make mistakes, etc.) and concrete
actions were taken to prove the employer's commitment to these new
values.

During the same years, earning the ISO 9002 Standard and setting up
autonomous or semi-autonomous work groups helped improve work relations
and promote employee accountability. The employer also made some of the
firm's profits available to the employees to help them improve their job
environment. Finally, faced with impending threats of a shutdown the
employer got the union involved in discussions on the means to relaunch
the firm.

On the side of the employees, after an unsuccessful attempt to face up
together with the union of the Saint-Jean institution, the Montréal
union authorities gave themselves the mandate to find a local solution
to the problem of the upcoming shutdown. The union then proposed to set
up a CAMO. When both parties submit a request, public authorities
finance the operating costs of such a committee. The committee includes
representatives of the institution's management and union as well as a
secretary, who is an external consultant chosen by both parties. The
purpose of such a committee is to make a diagnosis of the institution's
problems; this diagnosis can be approved by both parties and lead to
joint recovery proposals.

After an initial reluctance on the part of the employer the CAMO
constitution allowed the employees, among other things, to express their
grounds for dissatisfaction. Both parties were then able to settle most
of the issues on which they disagreed. Solutions for the survival of the
institution were developed in the framework of this committee's work,
particularly in regard to work relations and human resources management.

Thus, the official negotiation period lasted a week and was basically
aimed at ensuring that the terms of the collective agreement reflected
adequately the agreements previously signed in the framework of the CAMO
work.

# *The most important points negotiated*

The signing of a long-term collective agreement was a request made by
the management, which felt it needed to benefit from the same advantages
as its competitors in that regard. The employer wanted 5 years. The
union offered 8 years and finally 10 years in exchange for the
maintenance of the employees' buying power, in addition to other
benefits.

Several of the points negotiated fall within the scope of the social
peace sought by both parties in order to create a climate favourable to
investors. This was the case with the two-year moratorium on grievances
and the dispute resolution by an ad hoc joint committee. The other
points negotiated were aimed more at controlling the payroll expenditure
increase by indexing salaries yearly to the cost of living (IPC -
Québec) and doing away with the permanent status for new employees.
Finally, negotiations revolving around the work schedules and the job
assignment processes were aimed at improving the firm's flexibility
towards personnel management.

All these measures, combined with a healthier working climate, were
aimed at the survival of the institution. The management admits that the
signing of the collective agreement played a role in its decision to
keep the plant open.

Finally, certain safety mechanisms were established. For instance, new
schedules were introduced to improve working processes. However, in the
event this improvement did not materialize, it was planned that the
former work schedule agreed upon in the collective agreements would be
re-established.

The union expects that in 2008 salary review will be an important point
of the negotiations. For its part, the management hopes to obtain even
more flexibility in the management of human resources, particularly in
the case of job assignments, but feels prepared to respect the
expiration of the present agreement.

[]{#__RefHeading___Toc515943991 .anchor}3.3 [The Nortel Networks
Corporation]{.underline}

The Nortel Networks company is a multinational firm which produces a
wide range of communications material and Internet products. It has
plants in eight countries[^25]. In North America, the engineers are
unionized in only one institution, that in Ville Saint-Laurent (Québec).
They are members of the Association des ingénieurs et scientifiques des
télécommunications (AIST), created in the 1940s, which is not affiliated
with any central labour body. It groups together 500  Nortel[^26]
engineers and specialized technicians whose annual salaries vary between
\$55,000 and \$120,000 CDN.

In March 1998 the AIST and the Nortel Networks management signed a
collective agreement that will expire in March 2008. No external support
was requested. However, it is not the lengthening of the term of the
collective agreement which constitutes the most outstanding fact of this
agreement. It is first its content, which differs radically from that of
the previous collective agreement, especially in terms of remuneration
and of the mechanisms for the determination of the other working
conditions.

####### *A progressive approach*

Both parties acknowledged during an interview that since 1988 the
negotiation of the collective agreement had become a "non-event" due to
the lack of confrontation. During the 1995 negotiation the idea of a
long-term agreement was even brought up but nobody followed up on it.
However, both parties had then submitted a joint statement of their
objectives (excluding salaries) to the upper management. Then, after the
negotiation, both parties requested that a third party introduce them to
negotiation based on the "winner-winner" interests and approaches.

####### *The union's initial objective*

In 1998 the AIST had two main objectives involving remuneration. First
and foremost it wanted its members to benefit from the firm's
"Investment Plan" granted in North America to all the engineers in other
institutions. Under the terms of this program the firm deposits in a
savings plan an amount equal to that invested by the employee up to a
maximum of 6% of his or her annual salary. Secondly, the union wanted to
make sure that its members could also obtain the annual bonuses given to
the engineers of other institutions.

This wage demand was based on the fact that the remuneration of the
engineers had rapidly and unexpectedly increased in the other
institutions at the end of the 1990s. This was due to a work market that
was favorable to these salaried workers in the telecommunications
industry and to the firms' desire to attract young graduates and retain
the best engineers. The AIST was aware that its institution could lose
certain competitive assets if it failed to sufficiently attract young
people or to retain the most experienced engineers, specifically by
means of bonuses and rates of increase of differential piece rates.

####### *The management approach*

The management of the institution then proposed that the union adopt the
overall remuneration system of the non-unionized engineers of the firm
and have the same performance appraisal criteria used by the managers of
the other institutions. The AIST therefore had to abandon the wage class
system established for its engineers in the collective agreement. It
also had to abandon the model which consisted in granting the same wage
increase (in percentage) to all the engineers. The management also
required that the AIST abandon the bumping by seniority principle in the
case of job cuts. Finally, it requested that the new agreement be signed
for ten years.

####### *The new collective agreement*

The requests of both parties therefore included radical changes with
respect to the existing situation. Nevertheless, they had no
difficulties in coming to an understanding which resulted in a
collective agreement that was entirely different from the previous
one[^27]. The new collective agreement in fact grants the engineers and
technicians the working conditions of non-unionized employees performing
the same duties in other institutions. Moreover, any changes in the
working conditions of the non-unionized employees automatically applies
to the union members.

In other words, by signing this agreement the AIST decided to hand over
to the Human Resources Directorate the determination of working
conditions (including the remuneration), and the institution of
personnel management standards and policies. Finally, the recourse to
arbitration is only possible in the case of grievances involving
disciplinary measures. On the other hand, the members of the AIST
henceforth benefit from the firm's "Investment Plan" and from the bonus
policy.

The AIST also negotiated certain rules to protect its members against
abusive layoffs. Before dismissing an employee the Human Resources
Directorate must subject the employee to a performance appraisal program
along with an enhancement program. The dismissal can only be effective
if the results of this program are inconclusive.

There exists no regular consultative committee. The meetings with the
firm's management are conducted on an ad hoc basis. As a matter of fact,
the personnel management standards and policies regarding the working
conditions of the AIST members are now decided at the corporate level.
The union simply decided to use the counsel services of an attorney to
obtain from time to time a legal opinion concerning the respect of the
procedures by the firm's managers in regard to the calculation of
severance pays, performance appraisal, etc.

####### *The "safety window"*

The passage to a new radically different collective agreement for a
period of ten years was accompanied by the creation of safety "valves"
allowing for the termination of the agreement at the request of either
party. Thus, from March 1999 to March 2001 each party could decide to go
back to the previous collective agreement (1995-1998) by submitting a
written notice on the anniversary date of the signing of the agreement.
Following this two-year period a party can decide to terminate the
collective agreement by sending a notice to bargain between November 15
and 25 of each year. The right to strike can be exercised six months
after the transmittal of this notice. However, the employer's
contribution to the "Investment  Plan" offered to the unionized
engineers shall stop as soon as this notice is sent by either one of the
parties.

Since January 2001, Nortel Networks has been experiencing serious
problems as a result of the depressed demand for capital goods in the
telecommunications and Internet sectors. This had two consequences for
AIST members. Their asset value in the "Investment Plan" dropped since
the employer's contribution is paid with company shares. Then there were
layoffs at the Saint-Laurent plant. This context however did not appear
to influence the opinion of the AIST management who felt, in May 2001,
that nothing justified a request to reopen the collective agreement.

### CONCLUSION

Extending the duration of collective agreements provides more productive
results when it is associated with the parties' willingness to modify
their approach in matters of labour relations, and with their ability to
maintain the dialogue despite the difficulties and controversies which
unavoidably arise during the life of a collective agreement. Moreover,
the fact that the signataries resort to various mediation services can
play a significant role in getting around these obstacles and avoiding
dangerous pitfalls which may affect the firm's productivity and
dynamism.

We know that the prevention services of the ministère du Travail can
contribute to getting such an approach underway in terms of the working
climate within the firm, or oversee its maintenance for the duration of
the collective agreement. However, the social role of this contribution
will depend on the importance of long-term collective agreements in
terms of numbers, and on the signataries' interest in adopting it.

Moreover, the success of long-term collective agreements and of the
internal transformations of the firms accompanying them will also depend
on the ability of the persons in charge for both parties to plan for
relief prior to their departure provided there is a desire to warrant
the continuity of such a procedure. As a matter of fact this issue of
the new approaches will remain unsolved in Québec as elsewhere, since
the experience acquired in terms of consensus-building may eventually
disappear with the departure of its initiators.

[^1]: In Canada, approximately 90% of the labour force is under the
    jurisdiction of the labour laws of the provinces.

[^2]: *Relations du travail : nouvelles pratiques,* Report of the Work
    Committee of the Professional Corporation of Industrial Relations
    Consultants of Québec on the subject of the renewal of work
    relations in Québec, November 1992, p. 37. See also: Bourque,
    Raynald and Jean-Guy Bergeron, *Les changements en milieu de travail
    au Québec : politiques gouvernementales et réponses syndicales*,
    Off-print 126, École des relations industrielles, Université de
    Montréal, 1997.

[^3]: Statistics Canada, Labour Force Survey, seasonally unadjusted
    monthly data.

[^4]: Statistics Canada, Labour Force Survey

[^5]: Ministère de l'Industrie, du Commerce et de la Technologie,
    Direction générale des politiques, "Un modèle original d'entente de
    partenariat": le social contract du MICT », August 1992, 14 pages.

[^6]: See the *Actes du Congrès 1993* of the Professional Corporation of
    Industrial Relations Consultants of Québec, Montréal, September
    1993. See also: Bourque, Raynald and Jean-Guy Bergeron, *Les
    changements en milieu de travail au Québec : politiques
    gouvernementales et réponses syndicales*, Research paper 97-01,
    École des relations industrielles, Université de Montréal, 1997.

[^7]: See Grant, Michel and Benoît Lévesque, "Aperçu des principales
    transformations des rapports du travail dans les entreprises : le
    cas québécois", in: Michel Grant, Paul Bélanger and Benoît Lévesque
    (under the direction of) *Nouvelles formes d'organisation du
    travail*, Montréal: Harmattan, 1997, pp. 221-227.

[^8]: Maschino, Dalil, "Les changements dans l'organisation du travail
    dans le contexte de la mondialisation", *Le marché du travail*, vol.
    13, Nos. 7 and 8, July and August 1992.

[^9]: See the following texts: Confederation of National Trade Unions
    (CNTU), "*Une démarche syndicale pour prendre les devants dans
    l'organisation du travail"*, January 1992. Fédération des
    travailleurs et travailleuses du Québec (FTQ), *Face aux
    changements, de nouvelles solidarités,* Working paper presented at
    the Colloque sur l'Action syndicale dans l'entreprise, Laval
    (Québec), November 11-12, 1993. (FTQ), *Notre action syndicale et la
    réorganisation du travail*, Montréal, 1995. Centrale des enseignants
    du Québec (CEQ), L'organisation du travail, *Options*, 1993-1994
    winter issue.

[^10]: Maschino, Dalil, "Les nouvelles pratiques en milieu de travail au
    Québec", *Le marché du travail*, vol. 16, No. 8, August 1995, pp.
    6-8, 87-94.

[^11]: It is characterized by negotiations based on a conflictual
    approach which advocates the use of formal procedures for solving
    conflicts (grievances, arbitration) and the strict observance of job
    descriptions and managership rights within the framework of work
    sharing according to the Taylor principles.

[^12]: Conseil consultatif du travail et de la main d'œuvre (CCTM),
    *Document de réflexion sur une nouvelle organisation du travail*,
    April 1997 (English translation available on the CCTM web site:
    [www.cctm.gouv.qc.ca)]().

[^13]: The three-year maximum term was established in 1951 by the *Loi
    sur la durée des conventions collectives* (L.Q., 1951, c.34). The
    *Act to Amend the Labour Code* (R.S.Q., 1994, c.6) was adopted on
    May 11, 1994. However, it maintains a three-year maximum term for
    the collective agreements in the public and parapublic sectors
    (education, health, etc.). Moreover, the three-year maximum term
    continues to apply in the case of all first collective agreements.

[^14]: The Confederation of National Trade Unions (CNTU) even filed a
    complaint in 1993 before the Freedom of Association Committee of the
    International Labour Ofice (ILO), claiming that the bill went
    against international agreements concerning the freedom to join the
    organization of one's choice. According to the Confederation the
    project questioned four legal rights: the right to choose one's
    representative association within a reasonable period, the right to
    be affiliated to the union of one's choice, the right to an adequate
    protection against any interfering act and finally, the right to
    negotiate. Following analysis the Comité de la liberté syndicale
    found that the proposed amendments did not constitue a violation of
    the principles of union rights for the following reasons: (a) the
    long-term contract was negotiated on a voluntary basis; (b) this
    contract did not prevent the reopening of certain aspects of the
    agreement; (c) the contract signature remained subject to
    ratification by the members; (d) other mechanisms provided by the
    *Code* could allow for a solution to problems that were likely to
    occur.

[^15]: Ministère du Travail du Québec, Direction de la planification
    stratégique, de la recherche et des politiques, service des
    statistiques. This data is available on the site of the ministère du
    Travail ([www.travail.gouv.qc.ca](http://www.travail.gouv.qc.ca/))
    or by calling the customer service of the Ministère.

[^16]: ^?^ In Canada, it was estimated that in 2000 the collective
    agreements signed by units having more than 500 employees accounted
    for 27,5% of the total.

[^17]: ^?^ Mayer, Danièle, *Étude comparative des conventions
    collectives de longue durée avant et après la loi 166I,* Master's
    thesis in Industrial relations, École de relations industrielles,
    Faculté des études supérieures, Université de Montréal, September
    1999. See also: ministère du Travail, *Rapport sur l'application des
    articles 2 et 14 de la Loi modifiant le Code du travail adoptée par
    l'Assemblée nationale le 11 mai 1994*, March 2000. It is available
    on the web site of the ministère du Travail:
    [www.travail.gouv.qc.ca](http://www.travail.gouv.qc.ca/)

[^18]: See the transcript of the testimonies given during the
    parliamentary commission held on the repercussions of the 1994
    reform application. National Assembly, *Journal des débats*,
    Commission permanente de l'économie et du travail, consultations
    particulières sur le rapport sur l'application des articles 2 et 14
    of the *Act to amend the Labour Code*, tuesday September 5, 2000.
    ([www.assnat.qc.ca/archives](http://www.assnat.qc.ca/archives))

[^19]: We should mention that this method deals with the persons issues
    and the conflict which is the subject of the debate, focuses on the
    interests at play, makes use of a wide range of solutions before a
    decision is made and proposes an agreement as well as the assessment
    of the results on the basis of objective criteria. Bourque, Raynald,
    *Négociation raisonnée et démocratie syndicale*, Actes du cinquième
    colloque Gérard-Picard (*Colloquium Proceedings*)*,*(organized by
    the Confederation of National Trade Unions) Montréal, 1996.

[^20]: See Cutcher-Gershenfled, Joel, "Bairgaining Over How to bargain
    in Labor-Management Negociations", *Negociation Journal*, vol 10, No
    4, pp. 479-495. See also Friedman, Raymond*, "*Missing Ingredients
    in Mutual Gains Bargainning Theory"*, Negociation Journal,* vol. 10,
    No 3, pp. 265-280.

[^21]: There is an exception where a preventive intervention also takes
    place in the framework of the collective agreement negotiation: the
    NBI training.

[^22]: Source : ministère du Travail, *Rapport annuel*, 2000.

[^23]: The 375 employees of the Isle Maligne plant are represented by an
    independent union, whereas in the case of the Shawinigan plant
    approximately 450 employees are affiliated with the Confederation of
    National Trade Unions (CNTU).

[^24]: The union unit has revised its statutes in order for union
    delegates to be elected every three years and not only upon expiry
    of the collective agreement as before.

[^25]: United States, the United Kingdom, Canada, France, Mexico,
    Brazil, Turkey, and the Republic of Ireland.

[^26]: The engineers who are responsible for new development projects
    are not unionized. Moreover, non-expert technicians are grouped in
    another union whose last collective agreement was signed for a
    period of six years.

[^27]: The new collective agreement includes 9 articles compared with 26
    for the previous agreement and has 11 pages, whereas the previous
    one (1995-1999) had 34 pages.