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COMMENT Has Ontario's Anti-Scab Law Made any Difference - Legally, Economically, or Otherwise?* Brian Alexander Langille**1. THREE TYPES OF ARGUMENTS ABOUT THE ANTI-SCAB LAW On Saturday, January 21, 1995 the front page of The Globe andMail gave prominence to two stories. One headline read \"Ottawa MayBan Replacing Strikers\" and the other read \"Warren Found Guilty in 9Miners' Death\".1 The connection between these two stories did not gounnoticed and, indeed, the coverage given to the Federal Government'smusings about amending the Canada Labour Code specifically refer-red to the 1992 explosion which killed nine miners, including threereplacement workers, at the Giant Gold Mine in Yellowknife. I beginthe article by referring to the connection between anti-replacement oranti-scab legislation (and I use the two terms interchangeably) andviolence on picket lines, but not because I think the central legal argu-ment for anti-scab legislation is that it reduces violence. This is not myview. Rather, it is my view that, from the point of view of legalprinciple, the events at the Giant Gold Mine are very important, but fora very different reason.* This comment was written prior to Bill 7, introduced on October 4, 1995 by the recently elected Progressive Conservative Government, and which received Royal Assent on November 10, 1995. Bill 7 deleted the anti-scab provisions from the Labour Relations Act. This comment therefore addresses the situation under Bill 40.** Faculty of Law, University of Toronto. The Globe and Mail (Saturday, January 21,1995) AI.
462 CDN. LABOUR & EMPLOYMENT LAW JOURNAL [3 C.L.E.L.J.] I draw attention to the fact that I use the words \"from the point ofview of legal principle\". In addressing the issue of anti-scab laws it isimportant to separate three types of arguments for and against suchlegislation: (1) arguments about basic economic and distributive justiceissues, (2) arguments about other social policy concerns (such asreducing violence), and (3) arguments from legal principle.2 Thus thereare, in my view, three different sorts of debates about the rationality, orutility, or soundness of Ontario's decision to pass an anti-scab law.3First, from the point of view of general economic and distributive jus-tice concerns there is a legitimate debate about whether one shouldpass an anti-replacement worker law. The basic issue is whether onebelieves trade unions require more bargaining power or not. This intum is simply an assessment of our society's needs, in light of a host ofconsiderations we would wish to take into account regarding a justdistribution of wealth between capital and labour. Without pretendingto be exhaustive, it is obvious that several of the \"host ofconsiderations\" one would want to take into account are (l) the re-quirement that Canada be able to attract investment in order to havejobs at all, and (2) the concern over the continued \"impoverishment\" ofthe Canadian middle class in light of steadily declining real wagessince the late 1970s.4 When I speak of other social policy considerations, I do think ofthe issue of violence on picket lines which is so commonly invoked inboth supporting, and arguing against,5 such anti-replacement workerlegislation. There may be other \"external\" concerns, but this one isfront and centre and, as in the Giant Gold Mine tragedy, obviouslyimportant.2 Forthe O.L.R.B.'s views on the purposes of new Ontario provisions, see S.E.i.U.,Locals 204 & 532 v. Canadian Red Cross Society,  O.L.R.B. Rep. 34 andI.A.T.S.E., Local 357 v. Famous Players Inc.,  O.L.R.B. Rep 1270.3 Since this comment was written, on October 4, 1995 the Government introducedBill 7 which, inter alia, removed the anti-scab provisions brought in under Bill40. Bill 7 received Royal Assent on November 10, 1995.4 For some data on this phenomenon see, for example, Good Jobs Had Jobs(Economic Council of Canada, 1990); Working Time and the Distribution ofWork (Supply & Services Canada, 1994); see also John Gray, \"Does DemocracyHave a Future?\" New York Times (January 22, 1995) (Book Review at p. 1); and\"For Richer, ForPooter\" (November 5-11) The Economist, at 19-21.5 See the editorial \"Lockout this Law\" The Globe and Mail (Tuesday, January 24,1995) A18. .
COMMENT 463 When I tum to the third class of reasons for and against suchlegislation, I am talking about \"legal principle\". Here I mean to distin-guish and set apart from the previous two categories arguments whichflow from the structure, \"grammar\" or \"logic\" of Canadian collectivebargaining legislation as we know it. That is, these are arguments ofprinciple to the effect that either the anti-scab law is required by, orinconsistent with, the complex structure of law which already governscollective labour relations in this country. There are, I think, two arguments from legal principle for andagainst the anti-scab law. The best argument in favour of anti-scab laws goes as follows.Permitting employers to hire replacement workers on a permanent or\"quasi-permanent\" basis is a recipe for permitting employers to\"contract out\" of the Act, avoid their obligations regarding collectivebargaining, and ·do an \"end run\" around the status of the exclusivebargaining agent with whom the statute demands that the employerdeal. When I first studied labour law 20 years ago this would havestruck most people as a slightly implausible argument. Its plausibilitynow flows from a perceived growth in a phenomenon which the GiantGold Mine situation represents and, indeed, of which it is emblematic.That phenomenon is the phenomenon of employers hiring replacementworkers, withstanding a long strike, and ultimately (and perhapshaving set out with that intention) decertifying the union either on a dejure or de facto basis. From this perspective, the ability of theemployer to hire replacement workers is an invitation to the employerto \"exit\" the statute., The perceived reality is that in Canada there arenow employers ready, willing and able to employ this tactic. This perception in Canada is informed by the perception of thestate of the world in the United States. President Reagan's wholesalereplacement of the air traffic controllers is in the popular imagination(at least of union leaders) emblematic of the new employer attitudewhich, when combined with the ability to hire (in that country) per-manent replacement workers, has led to an aggressive campaign on thepart of employers to decertify unions through the use of replacementworkers.6 Leaving aside any question of how general a phenomenonthis is in the United States, let alone Canada, it is clear that we do havespecific incidents of this phenomenon - witness the Giant Gold Mine6 Weiler, \"Striking a New Balance\" (1984) 98 Harvard L. Rev. 351.
464 CDN. LABOUR & EMPLOYMENT LAW JOURNAL [3 C.L.E.LJ.]problem - and that at the level of \"legal principle\" this is indeed aproblem with which those concerned with maintaining the integrity ofthe system must grapple. The second argument of \"legal principle\" is that the introductionof anti-scab legislation alters the \"balance of power\" in the legislationwhich, it is alleged by those against anti-scab laws, is now poised at anappropriate level dictated by legal principle. The argument is, cor-rectly, that under the Canadian system of collective bargaining whatwe have is still bargaining. Each side is free to withdraw at somepoint during negotiations in order to force the other to see the error ofits ways and to come to a more sensible bargain. It is argued that, in theabsence of an anti-scab law, for example under Ontario law pre-January 1st, 1993, there was an appropriate \"balance of power\" be-cause each party was free to refuse to participate with the other in theenterprise of production, to seek to deploy its assets elsewhere and toseek the assistance of third parties in so doing. Thus, employers werefree to hire replacement workers, but workers were free to seekemployment elsewhere or to enlist the aid of third parties in other waysthrough boycotts, etc. There are obvious problems with this argument, many of whichare pointed out by Paul Weiler in his famous article \"Striking a NewBalance\".? For example, there existed in Ontario and elsewhere a dis-tinct asymmetry between the law's attitude towards employers enlist-ing the support of third parties (replacement workers) and the law'ssupport for unions doing the same things (primary picketing, secondarypicketing, consumer boycotts etc.). On this view, the balance of powerargument gets turned on its head. The anti-scab law is said -to be jus-tified and required in order to achieve a balance of power (roughlyequal restrictions to enlist third party support). From the point of viewof those arguing against anti-replacement laws, prohibiting the use ofreplacement workers affects the basic strategy of bargaining in that itinsulates the union from competition in the labour market. This is true.It is, of course, also true that the employer, and thus the union, is notinsulated from competition in the product market. There are, thus, two key arguments of legal principle raised re-specting the anti-scab debate: that permitting replacement workersfosters decertification and that it alters the balance of power between7 Ibid. See also Weiler, Governing the Workplace: The Future of Labor and Employment Law (Cambridge: Harvard Univ. Press, 1990) 265-269.
COMMENT 465the parties. In what follows I focus upon the first of these issues whichis, I think, the most pressing. Even if we assume there was in existence an appropriate balanceof poWer, the key question which remains is whether, in light of cur-rent realities, the threat of \"exit\" by employers through the use of re-placement workers is so compelling that it warrants a creation of aslight asymmetry that the alleged pure logic of bargaining would entail.Again, this is why the Giant Gold Mine case is so significant - it is astriking example of the conflict between these two legal principles. Ido not think one can fault an analysis which says that some shift in thebalance of power is required in order to ensure that some balance ismaintained at all. That sounds like sound legal reasoning to me. But, ofcourse, that depends upon a finding that the use of replacementworkers was a vehicle for \"union busting\" in Canada. That in tumforces us to look at a host of other legal issues.under Canadian labourlaw. If the existing rules did permit employers to use replacements toavoid the statute, then the anti;-scab law will make an important legal .difference. But if the existing legal regime was sufficient to preventthis tactic, then the law does not do very much, from a legal point ofVIew.2. HAS THE ANTI-SCAB LAW MADE ANY LEGAL DIFFERENCE? Before turning to the central question I have identified, otherissues must be noted. I start with a reminder that the significantmajority of Ontario workers do not engage in collective bargainingand, as a result, all strike activity by such workers is illegal. Thus, inassessing the impact of the anti-scab legislation we should begin withthe reminder that for the majority of workers in Ontario this change isan irrelevancy.8 For those within the system of collective bargaining in Ontario,what was the situation before the anti-replacement provisions wereenacted? First of all, the situation was complex, and is compared withthe new situation as follows:8 There is, of course, the interesting question of whether the change in the law will actually aid unions in their efforts to organize the hitherto unorganized. That is a question which we will have to wait for some time in order to answer in any sound empirical way.
466 CDN. LABOUR & EMPLOYMENT LAW JOURNAL [3 C.L.E.L.J.](a) Employees in the Striking Unit Before the new legislation, employees in the striking unit could,legally, continue to go to work; that is, cross their own union's picketline. There was a further issue of what sort of legal recourse the unioncould take against those who cross picket lines. Could the trade uniondiscipline or expel its members for, such action? Of course, closedshops are unusual in Ontario, but for those covered by closed shopsthis interesting issue remained. If a member could be disciplined, coulda member bound by a closed shop provision lose his or her job? Thisdepended upon the appropriate interpretation of what is now section47(2) of the Act, and whether such conduct in crossing the picket lineis \"reasonable dissent\" within the trade union. For non-members in thebargaining unit, this was not an issu~. The most overlooked and misunderstood aspect of the anti-replacement worker provision is that it is not a provision limited toreplacement workers at all, but is much more than that. Not only arereplacement workers prohibited from performing struck work, but soare members of the bargaining unit. In terms of either of the argumentsof legal principle, cited above, (avoiding decertification via replace-ment and balancing the limits on appeal to third party support) this isan unnecessary and unwarranted amendment to the Act. The threat ofdecertification posed by replacement workers and the problem of thirdparty support workers are addressed by prohibiting replacementworkers, not by removing the rights of the members of the bargainingunit to decide for themselves whether to support a strike or not.9(b) Employees in Non-Striking Bargaining Units of the Struck Employer at the Struck Location It has long been the law, mistakenly in my view, that a refusal bynon-striking workers to cross the picket line set up by members of astriking unit at their place of work is, in and of itself, a strike. 10 This isone of the many ways the law limited the rights of unions to enlist thirdparty support. As I understand the new legislation, this situation hasnot changed. However, the new provisions do extend, in section73.1 (7), a right to refuse to perform strike work. Thus, one has to go to9 This is linked to the \"watering down\" of the certification process - see Weiler, \"Promises to Keep\" (1983), 96 Harvard L. Rev. 1769. 10 Nelson Crushed Stone v. Mount Nemo Truckers Assn. (1978), 1 C.L.R.B.R. 115 (O.L.R.B.); 1.L.A. v. M.E.A.,  1 S.C.R. 120.
COMMENT 467work to perform one's own functions, but can refuse to perform thefunctions of the striking workers.(c) Managers at the Struck Location It was the case before, and also after, the amendment thatmanagers at the struck location can perform struck work. But they toohave a \"right to refuse\".(d) Other Employees of the Employer at Other Locations Under the old law, employees at other locations of the employerwere permitted to do the struck work at their location and, in theory,could have been moved to the struck locations to perform work there.Now, under the new legislation, employees at other locations can per-form struck work there, but have a right to refuse to do so. They can-not, however, be moved to a struck location.(e) Managers From Other Locations Before the amendments, employers were free to use, consolidate,or move around, managers from other locations to perform work at astruck location. Under the new amendments, the employer cannotmove managers from non-struck locations. Managers from other strucklocations can be consolidated and asked to perform struck work, butthey too have a right to refuse.(I) The Relative Job Rights of Striking Workers and Replacement Workers Here we come to the heart of the matter. The key argument basedon legal principle assumes that, under the old law, replacementworkers could be used to aid in effectively decertifying a union eitherde jure or de facto. The meritoriousness of this assumption dependsupon the answer to two questions. First, could replacement workersactually replace striking workers who wished to return to work?Second, could replacement workers vote in a decertification applica-tion? In Ontario, the answer to the first question was quite complex.First, under the old Ontario law, striking workers had an absolute rightto reclaim their job within six months of the beginning of the strike. 11The crucial question was what happened after the six months were up.11 The \"old\" s. 73.
468 CDN. LABOUR & EMPLOYMENT LAW JOURNAL [3 C.L.E.L.J.]On this question, the Ontario Labour Relations Board misinterpretedthe Act in the Miniskool decision,12 but partially recovered in theShaw-Almex Industries 13 decision. The issue in Miniskool was whetherit was an unfair labour practice for an employer to keep on a replace-ment worker in preference to a striking worker after the striker's sec-tion 73 rights had lapsed. What Ontario should have done is what theCanada Board did in the E.P.A. decision and clearly state that prefer-ring a replacement worker to a striker is an unfair labour practice. 14Ontario law did not do this clearly. Thus, in my view, Ontariojurisprudence made available the argument that permitting replacementworkers opens the door to employers to avoid their obligations underthe Act and to unilaterally exit the bilateral collective bargainingrelationship. The law in Ontario may also have been too ambiguous on thesecond question of whether replacement workers are eligible to par-ticipate in decertification votes during a strike. This was the key ques-tion resolved by the Canada Labour Relations Board in connectionwith the Giant Gold Mine strike, in holding that replacement workerswere not eligible to vote during the decertification proceeding. 15 If, in Ontario, it had been clearly established that replacementworkers were ineligible to vote during decertification proceedings, andthat it was an unfair labour practice for an employer to prefer a replace-ment worker to a striking worker, the legal argument in favour of theanti-scab law based on its relationship to decertification would nothave been available. We would then have been left with the less com-pelling, albeit strong, argument based on redressing the imbalance ineconomic weapons during a strike. 16 The argument in favour of anti-12 Miniskool (1983), 5 C.L.R.B.R. (N.S.) 211 (O.L.R.B.).13 U.S.W.A. v. Shaw-Almex Industries Ltd. (1986), 15 c.L.R.B.R. (N.S.) 23 (O.L.R.B.).14 E.P.A. v. C.A.L.P.A. (1983), 3 C.L.R.B.R. (N.S.) 75 (Can.) and (1984), 5 C.L.R.B.R. (N.S.) 68.15 Giant Mines Employers Assn. v. Royal Oak Mines Inc. (1993) 21 c.L.R.B.R. (2d) 55 (Can.).16 I do not attempt to resolve this point in detail here. My view is that Weiler is right - there was asymmetry in our law. The path Ontario has taken is the path not taken by Weiler. Weiler argued that we should address the asymmetry by remov- ing the restrictions on unions and thus achieve a balance. Ontario's path has been to increase the restrictions on employers. See Weiler, above, note 6. But Ontario has overstepped the mark in its creation of a \"statutory strike\" for all members of the unit. This is not related to a balancing of third party support at all.
470 CDN. LABOUR & EMPLOYMENT LAW JOURNAL [3 C.L.E.L.J.]which bans the use of replacement workers, and experts have analyzedtheir impact in quantifiable terms. Morley Gunderson, of the Centre forIndustrial Relations at the University of Toronto, along with a numberof colleagues, has undertaken an analysis of the impact of a host oflegal rules, including prohibiting replacement workers, upon three keyvariables - (1) the incidence of strikes, (2) the duration of strikesshould they occur, and (3) the impact on wage settlements. In a 1990study,17 Gunderson and Melino concluded that \"the prohibition of re-placement workers increases both strike incidence and conditionalduration\".18 In another context, Gunderson, Curvin and Reid 19 alsoconcluded that \"our results indicate that the legislation is associatedwith a statistically significant and quantifiably large increase in bothstrike incidents and duration and hence overall strike activity\".20Crampton, Gunderson and Tracey, in a 1994 article, also found that areplacement ban increases the real wage leve1.21 Some of these resultshave been characterized as \"somewhat surprising\".22 Why? The results on strike duration and strike incidence are surprisingbecause, based on certain theoretical models of the \"causes\" of strikes,these results are not indicated. One such model, the \"joint cost\" model,hypothesizes that strikes will be used less when the joint costs to bothparties (employers and unions) are high relative to the cost of usingother mechanisms for achieving those same ends.23 Anti-scab legis-lation increases the cost to the employers of strikes by removing theiroption of carrying on production by using replacement workers, andthus should result in fewer and/or shorter strikes. Thus, the data whichGunderson and his colleagues have collected, which indicates that theresult is more and longer strikes, is counter-theoretical, at least on thismodel. However, the data indicate higher wage settlements, i.e. thatunions have greater bargaining power, because the legislation increases17 Gunderson & Melino, \"The Effect of Public Policy on Strike Duration\" (1990) 8 1. of Labour Economics 298.18 Ibid. at 310.19 \"The Effect of Labour Relations on Strike Incidents\" (1989) 22 Can. 1. of Economics 775. See too Gunderson, Melino & Reid, \"The Effects of Canadian Labour Relations Legislation on Strike Incidents and Duration\"  Labor L.l. 512.20 Ibid. at 517.21 The Effect of Collective Bargaining Legislation on Strikes and Wages, Depart- ment of Economics, University of Maryland (unpublished).22 Gunderson, Melino & Reid, above, note 19 at 517.23 Above, note 19 at 514.
COMMENT 471the cost to only one party, the employer, and that party has to \"bribe\"the other party through an improved offer.24 On the other hand, there are theoretical perspectives from whichthe surprising data about strike duration and incidents is said to makesense. Models of what is called \"strategic bargaining\" are said to ex-plain the phenomenon of increased strike activity in the presence ofanti-replacement worker provisions. Keenan and Wilson, in an paperentitled \"Strategic Bargaining Models and Interpretation of StrikeData\",25 argue that \"attrition, screening, and signalling models derivedfrom strategic analysis\" all predict the observed outcome that Gunder-son and his colleagues have noted. In a subsequent paper, Wilson26gives a common-sense explanation of these theoretical insights. Heargues that the impact of anti-replacement worker legislation is to in-crease the uncertainty at the bargaining table from the union's point ofview. The situation at the table is that the employer has superior infor-mation about the value of the union's services, and the union knowsthis. The union also knows that it will be in the employer's interest notto disclose the true value of the union's services and to attempt to wina larger share for itself. The advantage of a strike is that it imposescosts upon the employer and the idea of the strike is that it forces theemployer to demonstrate convincingly that it cannot afford a higherwage. The strike, therefore, is a \"kind of communication\". The abilityof the employer to acquire a new work force is one of the concreteways which puts \"an upper bound on the range of acceptable wages\".27The idea is that when \"the union knows this bound, the problems ofcommunication are reduced and strikes tend to be shorter\".28 Whenthis source of communication and information is removed, through theimplementation of an anti-scab law, the result is longer strikes andmore of them. This, then, would explain the data which Gunderson andhis colleagues found \"surprising\". Gunderson and his colleagues, intheir later work, have drawn attention to the work of Keenan and Wil-son as a possible explanation for the data they discovered. Thetheoretical models are, however, in agreement that anti-scab laws do24 Ibid.25 (1989) 4 J. of Applied Econometrics at S87.26 \"Negotiation with Private Information: Litigation and Strikes\", The Nancy L. Schwartz Memorial Lecture, Kellog Graduate School of Management (May 1994 [unpublished]).27 Ibid. at 15.28 Ibid.
472 CDN. LABOUR & EMPLOYMENT LAW JOURNAL [3 C.L.E.LJ.]increase the relative bargaining power of unions, and do lead to anincrease in wages. There is no theoretical model which disputes eventhis. Nonetheless, apart from theoretical models, there is data whichdisputes this conclusion. John Budd, a distinguished commentator onthese matters, has recently demonstrated that the empirical reality ofthe impact of various forms of anti-scab laws upon union bargainingpower and bargaining results is quite mixed and difficult to assess. Heconcludes, \"the preferred specifications imply that a ban on strikereplacements significantly increases strike duration and wage changesettlements, but not strike insurance or real wage levels.\"29 Can anexplanation be found for this conclusion? I leave the detailed and inter-nal assessment of Budd's methodologies to those expert in the field.But there is one point which I wish to make. All of the researchers engaged in the project of estimating theactual impact of anti-scab laws seem to have ignored one importantquestion; that is whether the anti-scab laws actually prohibit somethingthat otherwise would be done, in other words, whether they actuallyeffect a change in the real world. In all of the research to which I havereferred, the researchers have simply taken their data regarding strikes,strike duration, and wage settlements, and analyzed changes in the datafollowing a change in the law. There is an assumption that the lawactually directed itself to behaviour which was occurring in the realworld, and that the law brought about a change in that behaviour in thereal world which results in the changed data. But does this assumptionhold? This turns upon the question of whether replacement workers, ofthe sort now prohibited, were actually used by employers before thepassage of the law. It may tum out that what the law prohibits is some-thing that was not occurring in any event. If this is the case, then all ofthe data and all of the theoretical speCUlation about it is beside thepoint. However, it is quite difficult to get sound information about theuse of replacement workers by struck employers prior to the passage ofthe Ontario legislation. The only data of which I am aware in Ontariois the study produced by the Ministry of Labour during the period of29 John W. Budd, \"Canadian Strike Replacement Legislation and Collective Bar- gaining: Lessons for the United States\" (forthcoming in Industrial Relations). See also: Budd and Pritchett, \"Does the Banning of Permanent Strike Replacements Affect Bargaining Power?\" I.R.R.A. 46 Annual Proceedings 370.
474 CDN. LABOUR & EMPLOYMENT LAW JOURNAL [3 C.L.E.L.J.]creases could be created with a legal change with such a small impactin the real world.314. HAS THE ANTI-SCAB LAW MADE ANY DIFFERENCE OTHERWISE? Here, I think one can be more definitive. In my view, the anti-scab law has made a difference - not particularly legally, and not par-ticularly economically - but definitely rhetorically. The level ofrhetoric associated with labour law reform in Ontario has escalated tonew heights, and the lack of an informed basis for much of this discus-sion is only matched by its hysterical tone. But our world has been changed, not merely rhetorically, but con-ceptually. The debate about the anti-replacement worker legislation inOntario has, in large part, been mounted in terms of what I would referto as \"international regulatory competition\". The basis of the argumenthere is that Ontario cannot afford to pass \"progressive\" labour lawsbecause jurisdictions with which Ontario is in competition do not havesuch \"high\" labour standards. Thus, Ontario is put at a \"competitivedisadvantage\". These are complex questions, but I would say the onepositive contribution of the anti-scab law debate (and the general Bill40 debate) has been to awaken us to the need for contemplation aboutOntario's labour law, not as the law of an isolated jurisdiction, but asone of the policies of a player in an increasingly economically in-tegrated world. This is where out attention should be focused, not be-cause the answers are easy, as many opponents of Bill 40 seem tobelieve, but because they are complex, important and unavoidable.3231 Further anecdotal evidence for this proposition is found in the data indicating low on average annual per cent wage increases in Ontario (including private sector alone) for both 1993 and 1994. See Ontario Collective Bargaining Review 1993 and December 1994 Report (Lab. Man. Services - Office of Collective Bargain- ing Information).32 See Langille, for example, \"'Labour Standards in the Globalized Economy' and The Free Trade/Fair Trade Debate\" in Sengenberger & Campbell (eds.) International Labour Standards and Economic Interdependence (International Institute for Labour Studies, Geneva, 1994).

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