Report in which the committee requests to be kept informed of development - Report No 316, June 1999

1. 275. In a communication dated 25 September 1998, the Canadian Labour Congress (CLC) presented a complaint concerning violations of freedom of association against the Government of Canada. Communications International endorsed this complaint in a communication dated 29 September 1998.
2. 276. The Government sent its observations on the case in communications dated 22 January and 15 April 1999.
3. 277. Canada has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). However, it has not ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Labour Relations (Public Service) Convention, 1978 (No. 151), or the Collective Bargaining Convention, 1981 (No. 154).

A. The complainant's allegations

1. 278. The complainant maintains that the Government has seriously contravened the principles of freedom of association by adopting, on 3 December 1997, Bill C-24 (the Postal Services Continuation Act, 1997) to terminate a lawful strike by Canadian postal workers. The events leading to the enactment of Bill C-24 are outlined below.
2. 279. On 31 January 1995, the Canada Post Corporation and the Canadian Union of Postal Workers concluded a collective agreement which was due to expire on 31 July 1997. A notice to bargain with a view to renewing the agreement was served, following which the Canada Post Corporation and the Canadian Union of Postal Workers held a number of meetings for the purpose of negotiation.
3. 280. The complainant claims that throughout the period April-November 1997, and despite the talks that were held, the existence of a strike mandate, the intervention of conciliation officers and the establishment of a conciliation board, the Canada Post Corporation made no real effort to conclude a collective agreement; indeed, during this period, the Minister on several occasions said that a special back-to-work law would be enacted if the postal workers went on strike.
4. 281. The complainant is of the opinion that, after November 1997, the Canada Post Corporation had no intention of negotiating in good faith, and alleges that the proposals submitted at that time to the postal workers constituted a retrograde step in relation to the original demands and indeed in relation to the employer's own initial offers. The complainant maintains that the employer deliberately created a situation of deadlock in the negotiating process in order to force the union to resort to the ultimate means of applying pressure, namely, strike action. It was in this context, with no other option available, that the union went on strike on 19 November 1997. Shortly after this the Government passed Bill C-24, forcing the workers involved to return to work.
5. 282. The complainant alleges that Bill C-24 deprives the union not only of its right to strike but also of its ability to negotiate freely on matters concerning the conditions of employment of its members.
6. 283. More precisely, the complainant maintains that Bill C-24 restricts the right of workers to organize in the defence of their interests and negates any benefits of joining a trade union organization, whose efforts are systematically hampered by the new legislation. Union membership now confers no real benefits, given that any collective agreement that may be concluded can be modified unilaterally by the authorities to accommodate the wishes of the Government or the employer.
7. 284. Furthermore, Bill C-24 violates the principle of free collective bargaining by: (i) extending the collective agreement which expired on 31 July 1997 for a further three years; (ii) imposing pay awards through legislation for the same period; (iii) requiring the mediator-arbitrator to take account in his decisions of the interests of the Canada Post Corporation, namely, its viability and financial stability; (iv) unduly restricting the scope of collective bargaining; (v) prohibiting strikes; and (vi) setting fines that are ten times higher than those provided for in the Canadian Labour Code for similar cases.
8. 285. Lastly, the complainant maintains that Bill C-24 violates the right to strike, in that the prohibition of strike action, combined with the extension of the collective agreement, the unilateral imposition of conditions of employment and the absence of genuinely impartial and independent arbitration machinery (even though the postal service is not an essential service in the strict sense of the term), deprives the workers concerned of effective means for defending their economic and social interests.
9. 286. The complainant recalls that Bill C-24 is only one of many legislative measures adopted by the Government which impede and are seriously detrimental to the process of collective bargaining in the country. In this regard, the complainant refers to the 1987 and 1991 Postal Services Continuation Acts. On a number of occasions in the past, the Canadian Government has shown little interest in respecting the right of workers to bargain collectively and freely on their terms and conditions of employment. As regards Bill C-24, the complainant maintains that the Government has wilfully and deliberately sacrificed collective bargaining in the interests of the stability, efficiency and productivity of the Canada Post Corporation. Indeed, the Government in recent years has demonstrated its intention to institutionalize recourse to legislation as a means of unilaterally fixing conditions of employment, not only for public servants but for all workers employed in organizations under federal jurisdiction. Despite numerous complaints and recommendations made by the Freedom of Association Committee and the Committee of Experts on the Application of Conventions and Recommendations, the Government has still not adopted the necessary measures. Taking into account these repeated violations, the complainant requests that a direct contacts mission visit the country to meet representatives of the trade unions, employers and Government with a view to carrying out an in-depth assessment of the situation and formulating suitable recommendations.

B. The Government's reply

• Profile of the Canada Post Corporation
  287. 287 The Government explains that the Canada Post Corporation was set up in 1981 by an Act of Parliament (the Canada Post Corporation Act) and that its mission is to establish and operate a postal service for all Canadians.
  288. 288 The Government states further that the Canada Post Corporation handles more than 37 million letters and parcels daily, and in 1997-98, 30 million Canadians and more than 900,000 companies and public institutions were served by the Corporation.
  289. 289 The Canada Post Corporation has more than 63,000 employees working at 22 major mail-processing centres and other facilities and is Canada's fifth largest employer.
  290. 290 The Government considers that the work of the Corporation is of importance to all Canadians. A large proportion of the total volume of letters and parcels handled by the Corporation is private mail; any disruption of the service can entail serious consequences for people who depend on government benefits which are, as a rule, sent through the postal system. As for commercial enterprises, the postal service plays a vital role with regard to sending out invoices and payments. Strikes or other disruptions to the postal service in Canada can lead to serious cash-flow problems for these companies.
  291. 291 Bearing this information in mind, the Government indicates that the strike which paralysed the Canada Post Corporation for almost two weeks in November and December 1997 entailed serious consequences for companies and individuals alike. According to some estimates, Canadian companies lost more than $20 million for each day of the strike. Charities, most of which rely on contributions paid during these months, are said to have lost more than $10 million per day. The strike resulted in lay-offs for 10,000 workers in various companies that were directly affected. In addition, some people who are dependent on state benefits found themselves -- despite contingency measures -- without adequate funds to cover basic necessities and rent. Throughout the period of the dispute, conciliators and mediators were available to the parties concerned to help them to reach an acceptable settlement. The Government intervened only once it became evident that no such settlement was in prospect
• Legislative framework for collective talks under the Canadian Labour Code
  292. 292 Only 10 per cent of Canadian workers are covered by the Canadian Labour Code and related laws. These are workers employed in infrastructures and industries of considerable importance to the Canadian economy, including international and inter-provincial land and sea transport, air transport and airports, telecommunications, banks, ports, postal services, and other industries declared to be of general advantage to Canada. In June 1998, Part I of the Canadian Labour Code was amended to replace the Canada Labour Relations Board with a representational body, the Canada Industrial Relations Board. These amendments came into force on 1 January 1999. As regards the rights of the workers covered by this legislation to organize and bargain collectively, the Government recalls its commitment to respect them and refers in this regard to the Preamble to Part I of the Canadian Labour Code, which states:
• Whereas there is a long tradition in Canada of labour legislation and policy designed for the promotion of the common well-being through the encouragement of free collective bargaining and the constructive settlement of disputes;
• And Whereas Canadian workers, trade unions and employers recognize and support freedom of association and free collective bargaining as the bases of effective industrial relations for the determination of good working conditions and sound labour management relations;
• And Whereas the Government of Canada has ratified Convention No. 87 of the International Labour Organization concerning Freedom of Association and Protection of the Right to Organize and has assumed international reporting responsibilities in this regard;
• And Whereas the Parliament of Canada desires to continue and extend its support to labour and management in their cooperative efforts to develop good relations and constructive collective bargaining practices, and deems the development of good industrial relations to be in the best interests of Canada in ensuring a just share of the fruits of progress to all;
• Now Therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: (...)
  293. 293 As regards collective bargaining as such, Part I of the Canadian Labour Code grants exclusive bargaining rights to bargaining agents representing employees in a given bargaining unit. The Canada Industrial Relations Board is the body responsible for providing the necessary certification.
  294. 294 In order to be certified to carry out collective bargaining, a trade union must establish its status as a union. For this purpose, the Canada Industrial Relations Board requires proof from the union that it is an organization established for the purpose of collective bargaining and that it has adopted appropriate statutes and by-laws. The organization must be free from employer interference or domination. The union once certified must show that it represents the majority of employees in a given bargaining unit.
  295. 295 The Canada Industrial Relations Board has exclusive jurisdiction to determine the unit appropriate for collective bargaining. To do this, it takes into consideration the nature of the industry concerned, the organization of the company and the skills and occupational groups of the workers. In practice, the bargaining unit may cover one, several or all of an employer's establishments, and the units may cover all employees or be divided to cover particular categories. Although the nature of the industry concerned will influence the determination of the appropriate bargaining unit, the Canada Industrial Relations Board tends increasingly to avoid fragmentation of bargaining units. Once certification has been granted, the bargaining agent and employer are under an obligation to meet and bargain in good faith and to make every reasonable effort to conclude a collective agreement. Such agreements are concluded for a minimum period of one year, during which time strikes and lockouts are prohibited. However, collective agreements must contain a provision to the effect that all disputes on their interpretation and implementation must be settled by arbitration or in some other way. If the parties fail to agree on the choice of arbitrator, one can be appointed at their request by the Minister of Labour.
  296. 296 Notice to bargain may be given by either party three months before expiry of the collective agreement. If talks do not lead to an agreement, one of the parties can notify the Minister of Labour in order to take advantage of the provisions of the Labour Code relating to the appointment of a conciliation officer or conciliation commissioner (an independent official), or in order to acquire the right to strike or lock out. The Minister can then set the conciliation procedures in motion, in which case strikes or lockouts are prohibited until the settlement procedures have been exhausted.
  297. 297 Lastly, the Canadian Labour Code also requires that the bargaining agent represent all the members of a given bargaining unit fairly and without discrimination, and provides for penalties in the event of any violations of its provisions.
  298. 298 The Government concludes its presentation of the legislative framework by stressing that the Canadian Labour Code aims to create a stable environment for collective bargaining and to encourage parties to use collective bargaining as a means of settling their differences. In practice, the Government considers that collective bargaining in private companies subject to federal jurisdiction works well, given that more than 95 per cent of agreements are concluded without any work stoppage. Between 500 and 600 such agreements come up for negotiation each year.
• History of talks between the Canada Post Corporation and the Canadian Union of Postal Workers
  299. 299 The Government sets out the history of collective bargaining since the Canadian Union of Postal Workers concluded its first collective agreement. Between 1975 and 1997, collective talks were held during the periods 1975, 1977-78, 1979-80, 1981-82, 1984-85, 1986-87, 1989-1991 and 1994-95. Strikes were carried out in 1975, 1978, 1981, 1987 and 1991. The Government ended the strikes in 1978, 1987 and 1991 by means of "back-to-work" laws. In the other cases, the parties involved eventually reached an agreement without the Government taking legislative action or without any work stoppage (1979-80, 1984-85 and 1994-95).
  300. 300 The Government recalls the reasons for the establishment of the Canada Post Corporation in 1981. During the 1970s, Canadians became increasingly frustrated at the postal system, as disputes became more frequent and disrupted services. A number of inquiries were carried out in an attempt to solve the problem, and it was following these inquiries that the Canada Post Corporation was set up by law with a mandate to "establish and operate a postal service for the collection, transmission and delivery of messages, information, funds and goods both within Canada and between Canada and places outside Canada".
  301. 301 Section 5 of the Canada Post Corporation Act states that the Corporation must have regard to "the need to conduct its operations on a self-sustaining financial basis while providing a standard of service that will meet the needs of the people of Canada and that is similar with respect to communities of the same size". The Board of Directors set up under the Act interpreted these fundamental objectives to mean improved services, creating a better climate for human relations within the organization, and the achievement of financial self-sufficiency by the end of the Corporation's fifth year of operation.
  302. 302 In November 1995, the minister responsible for the Canada Post Corporation ordered a comprehensive and independent review of the Corporation's mandate. The report of that review, which was released in October 1996, concludes that the Canada Post Corporation is operating under constraints that are no longer in tune with the realities of today's workplace, particularly with regard to flexibility, job security and pay for time not worked. The financial consequences of these problems are serious enough to pose a threat to the Corporation's viability. The report recommends that the Corporation reduce costs associated with the application of collective agreements by bringing them into line with the realities of the contemporary Canadian workplace, and that this should be done through bargaining in good faith. Should talks end in deadlock, the Government must take the necessary measures to safeguard the public interest and ensure the long-term financial stability of the Canada Post Corporation.
  303. 303 With regard specifically to the 1997 collective talks in the postal sector, the Government explains that direct negotiations between the parties began in the summer of 1997. Two conciliation officers were appointed by the two parties and meetings were held in July, August and September 1997. However, from the beginning of September onwards, the union, which said it was not prepared to continue with the conciliation process, asked the conciliation officers to submit their report. The union subsequently rejected the global offer made by the Canada Post Corporation on 18 September. Some weeks later, the Minister of Labour appointed a conciliation commissioner who, after numerous meetings with both sides, indicated on 30 October that the parties had been unable to reach a settlement. He suggested that more rapid progress would be made if the parties were under the pressure of a possible strike or lockout. At the same time, the conciliation commissioner recommended that the Minister of Labour should urge the parties to "negotiate their dispute promptly, diligently and in good faith" and that the services of the Federal Mediation and Conciliation Service should be made available to them at any time at their request. The report was published on 10 November, and on 18 November the parties obtained the right to conduct a strike or lockout in accordance with the relevant provisions of the Canadian Labour Code.
  304. 304 The strike by the Canadian Union of Postal Workers began at 5 p.m. on the following day. However, the Government indicates that the parties continued to negotiate throughout November. Following talks with the parties in which he was assured that they still wanted to achieve a negotiated settlement, the Minister appointed a senior civil servant as mediator on 24 November. Although the mediator met with the parties between 24 and 28 November, they were unfortunately unable to reach a settlement. Under these circumstances, the Minister of Labour felt obliged to introduce a "back-to-work" bill at the beginning of December. Bill C-24 (the Postal Services Continuation Act, 1997) was enacted on 2 December 1997. The postal workers returned to work on 4 December.
  305. 305 The Government stresses that under Bill C-24, a mediator-arbitrator was appointed in January 1998 with a view to settling all the matters in dispute. He subsequently held regular meetings with the parties involved. The union for its part simultaneously initiated various judicial proceedings. The Quebec Superior Court, in a ruling handed down on 24 March 1998, rejected the union's application alleging that Bill C-24 was contrary to the Canadian Charter of Human Rights and Freedoms.
  306. 306 The Government explains that Bill C-24 extends the collective agreement until such time as a new one comes into force. The collective agreement is also amended by provisions for wage increases of 1.5 per cent from 1 February 1998, a further 1.75 per cent from 1 February 1999 and a further 1.9 per cent from 1 February 2000.
  307. 307 In its concluding remarks, the Government recalls that the Canadian Labour Code recognizes the rights to strike and lock out. It also stresses that it favours collective bargaining and intervenes only as a last resort and that, since 1950, it has had recourse to special "back-to-work" legislation on only 25 occasions and does so only in cases where a stoppage would have serious consequences for Canadians.
  308. 308 In 1997, the Government was obliged to enact back-to-work legislation in the postal services to protect the public interest and settle the dispute, the parties having failed to agree despite the intervention of conciliation officers, conciliation commissioners and mediators. This government initiative became necessary because the stoppage of postal services was potentially very damaging to individuals and companies which had no connection with the parties to the dispute. Several Canadian companies which depend on the postal service suffered considerable losses which could, in already difficult circumstances, threaten their economic viability. Some individuals found themselves without any money to cover basic necessities.
  309. 309 Furthermore, the Government considers that, since Bill C-24 contains provisions on the settlement of disputes, it has created a new opportunity for the parties concerned to reach a settlement through mediation or arbitration. In this regard, the Bill sets out the guiding principles which mediator-arbitrators must follow; these principles are intended to ensure that the mediator-arbitrator keeps in mind the financial constraints on the Canada Post Corporation, as well as its statutory obligation to provide a quality service.
  310. 310 Lastly, the Government notes that the wage increases provided for in Bill C-24 are larger than those that have been negotiated for the public service in general, and also states that the fines provided for in the event of non-compliance were deliberately set at a high level in order to be a certain deterrent.
  311. 311 In conclusion, the Government says that it is convinced that the parties to this dispute were not able to reach a settlement, even after all the available mechanisms had been exhausted. Back-to-work laws are passed only in the case of the major infrastructure services, any interruption of which would have serious repercussions for all Canadians. The Government finally reaffirms its belief in collective bargaining.

C. The Committee's conclusions

1. 312. In this case, the complainant alleges that the Government infringed the principles of freedom of association by adopting Bill C-24 (the Postal Services Continuation Act, 1997), which forced postal workers to return to work after a lawful strike lasting 12 days. The Government maintains that it adopted Bill C-24 in the public interest, after it had made available to the parties involved in a public-interest sector all the dispute settlement mechanisms available under legislation, without any success.
2. 313. The Committee takes note of the Government's very detailed reply; it also notes that the Government bases its arguments on more or less the same claims which it had put forward on the occasion of the examination of a complaint following the enactment in 1987 of the Postal Services Continuation Act, 1987, which forced Canadian postal workers back to work after a seven-day strike (see Case No. 1451, 268th Report, paras. 46-104).
3. 314. The Committee also notes that the complainant and the Government appear to agree in general terms on the nature of the events summarized here which led to the adoption of Bill C-24.
4. 315. In terms of legislation, and with regard to companies and institutions under federal jurisdiction, collective bargaining and dispute settlement procedures are provided under Part I of the Canadian Labour Code, Divisions IV and V. Within the three months before the expiry of a collective agreement, either of the parties to it can, by notice, require the other party to commence collective bargaining for the purpose of renewing or revising the collective agreement (Canadian Labour Code, section 49). After a period of collective bargaining in good faith (ibid., section 50), either party may inform the Minister of their failure to reach any agreement (ibid., section 71). Under the law, the Minister can then choose from a number of options: appointment of a conciliation officer, appointment of a conciliation commissioner, or establishment of a conciliation board (ibid., section 72(1)(a), (b) and (c)). The Minister can also notify the parties of his or her intention to take no such action (ibid., section 72(1)(d)). In cases where the parties have used these dispute settlement mechanisms and the Minister has indicated his or her intention not to take any of the actions referred to above, the parties acquire the right to carry out a strike or lockout once a certain period (seven days) has elapsed. Until this stage is reached, "No employer shall declare or cause a lockout and no trade union shall declare or authorize a strike" (ibid., section 89(1)). The Minister may have recourse to conciliation at any time if he or she considers that such action may help the parties to conclude a collective agreement (ibid., section 72(2)).
5. 316. In the present case, the parties began talks in early June 1997. Subsequently, two conciliation officers were appointed and meetings were held during the summer of 1997. At the beginning of September, the Canadian Union of Postal Workers indicated that it was no longer prepared to use the services of the conciliation officers. In this context, in accordance with the Canadian Labour Code, the Minister of Labour appointed an independent conciliation commissioner who, in the report which he submitted on 30 October 1997, conceded that his efforts to bring the parties together had failed. Nevertheless, the parties continued to negotiate. The parties acquired the right to strike or lock out on 18 November and the union called a lawful strike the following day. The Minister of Labour appointed a senior official as mediator on 24 November; meetings were held in his presence until 28 November, without any agreement being reached by the parties. The Government considered that talks were leading nowhere and at the beginning of December 1997, 12 days after the strike began, introduced Bill C-24 before Parliament which passed it, forcing the postal workers to return to work on 4 December.
6. 317. The Committee notes that Bill C-24 not only ends the lawful strike declared by the union, but also extends the collective agreement which expired in June 1997 until such time as a new collective agreement is concluded (section 6) or for a maximum period of three years and requires the Minister to appoint a mediator-arbitrator and refer to him or her all matters that remain in dispute between the parties (ibid., section 8). On 1 January 1999, more meetings were held between the mediator-arbitrator and the parties on the basis of these provisions. Bill C-24 states expressly that the mediator-arbitrator "shall be guided by the need for terms and conditions of employment that are consistent with the Canada Post Corporation Act and the viability and financial stability of Canada Post, taking into account (a) that the Canada Post Corporation must, without undue increases in postal rates, (i) operate efficiently, (ii) improve productivity, and (iii) meet acceptable standards of service; and (b) the importance of good labour-management relations between the Canada Post Corporation and the union" (ibid., section 9).
7. 318. With regard to facts that are not disputed, the Committee notes that, by the time the Canadian legislature passed Bill C-24 forcing the postal workers back to work, the parties had been holding talks for six months and that, despite having used the many dispute settlement procedures available under the law, they had failed to reach agreement.
8. 319. The Committee also notes that one of the main issues in the present complaint concerns the fact that the postal workers were engaged in a lawful strike and that the Government, through Bill C-24, had ordered them to return to work 12 days after the strike began.
9. 320. In this context, the Committee is bound to recall that the right to strike is one of the legitimate and essential means of defending workers' economic and social interests (see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, paras. 473-477). The Committee must once again draw the Government's attention to the principle of freedom of association according to which the right to strike may be restricted or prohibited only in a limited number of cases, namely: in the case of public servants exercising authority in the name of the State; essential services in the strict sense of the term, that is, services the interruption of which would endanger the life, personal safety or health of the whole or part of the population. Furthermore, the Committee recalls that a general prohibition of strikes can only be justified in the event of an acute national emergency, and then only for a limited period of time (see Digest, op. cit., paras. 526-527).
10. 321. In addition, the Committee has been asked on several occasions to examine complaints concerning the compulsory continuation of postal services to the detriment of the legitimate exercise of the right to strike. On these occasions, the Committee concluded that it was difficult to concede that such stoppages were likely to result in consequences characteristic of essential services in the strict sense of the term (see Case No. 1692, 291st Report, para. 224; and Case No. 1451 (Canada), 268th Report, para. 98).
11. 322. Nevertheless, the Committee notes that a prolonged interruption in postal services can affect third parties who have no connection with the dispute. The Committee is aware of the fact that a strike affecting postal services, especially at a crucial time of year, may have serious repercussions for companies, even with the availability of alternative services such as private mail services, facsimile or electronic mail. In this regard, the Committee has already noted that direct mail undertakings, which rely heavily or exclusively on the postal system, are particularly badly affected (see Case No. 1451 (Canada), 268th Report, para. 98). The Committee is also especially sensitive to the fact that a postal strike directly affects individuals; even if they, too, have access to alternative services, the Committee cannot ignore that it is often people in a socially precarious situation who suffer directly from interruptions in services of this kind, since they are thereby deprived of the minimum level of income needed to cover basic necessities and housing. In such cases, the worst hit are often recipients of unemployment benefits or social assistance and elderly people who depend on their pension payments.
12. 323. Whatever the case may be, and however unfortunate such consequences are, they do not justify a restriction of the fundamental rights guaranteed under Conventions Nos. 87 and 98, unless they become so serious as to endanger the life, safety or health of part or all of the population. In the opinion of the Committee, this is not the case here, especially in view of the claim, which has not been refuted, that even by the Government's own admission, contingency measures had been taken. The Committee therefore requests the Government to make every effort in the future to avoid having recourse to back-to-work legislation in the postal sector.
13. 324. On the other hand, the Committee has previously indicated that the maintenance of a minimum service can be foreseen in the postal services (Digest, op. cit., para. 568). The Committee stresses, however, that the maintenance of minimum services in the event of a strike should only apply: (1) in services whose interruption would endanger the life, personal safety or health of the whole or part of the population (essential services in the strict sense of the term); (2) in services which are not essential in the strict sense of the term but where the extent and duration of a strike might be such as to result in an acute national crisis endangering the normal living conditions of the population; or (3) in public services of fundamental importance (Digest, op. cit., para. 556). In such cases, trade union organizations should be able to participate in defining the minimum service, along with employers and the public authorities (Digest, op. cit., para. 557). The Committee of Experts on the Application of Conventions and Recommendation shares this view (General Survey of 1994 on freedom of association and collective bargaining, para. 161). The Committee suggests that the Government should examine the possibility of introducing, in agreement with the trade unions concerned, measures in order to avoid recourse to back-to-work laws, and requests the Government to keep it informed in this respect.
14. 325. Finally, recalling that the Committee already suggested that the Government consider having recourse to the assistance of the International Labour Office, and noting the complainant's request that a direct contacts mission visit the country, the Committee requests the Government to re-examine these proposals in order to facilitate finding solutions to the difficulties identified, and to give an answer in this regard.