Report in which the committee requests to be kept informed of development - Report No 265, June 1989

1. 375. The complaint by the Canadian Labour Congress (CLC), contained in a
   • communication dated 15 February 1988, is presented on behalf of the nine
   • member unions of the Associated Railways Unions (ARU). The Government sent its
   • observations by a letter received on 29 November 1988. On 31 January 1989, the
   • CLC requested an adjournment in order to submit a response to the Government's
   • reply. However, in a further communication dated 5 May 1989, the complainant
   • indicated it would not file a response and asked that the case be examined by
   • the Committee.
2. 376. Canada has ratified the Freedom of Association and Protection of the
   • Right to Organise Convention, 1948 (No. 87); it has not ratified the Right to
   • Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant's allegations

1. 377. In its complaint, the CLC alleges that the Government breached
   • Convention No. 87 by enacting the Maintenance of Railway Operations Act, 1987
   • to put an end to a legal strike of the ARU member unions in a non-essential
   • service sector that was not endangering the life, personal safety or health of
   • the whole or part of the Canadian population, declared in complete conformity
   • with the Canada Labour Code. The CLC submits that the Government's
   • intervention was an unnecessary and unjustified intrusion into free collective
   • bargaining, that deprived the railway unions of their only lawful economic
   • lever. Attached to the CLC complaint is a document giving background
   • information on the situation and describing the chronology of events leading
   • to the adoption of the Maintenance of Railway Operations Act, 1987.
   • B. The Government's reply
2. 378. In its elaborate reply the Government begins by stressing the
   • historical, social, economic and political importance of railways in Canada,
   • mainly because of geographical and demographic factors (huge distances, low
   • population density, diverse topography and severe climatic conditions). The
   • history of Canada is to a great extent the history of its railway service
   • according to the Government, which states: "without railways there would be
   • and there could be no Canada".
3. 379. The Government then describes the federal labour legislation which,
   • under the Constitution, applies to railway operations. The legal process
   • leading to the renewal of collective agreements is set out in the Canada
   • Labour Code. Within three months preceding the expiry of an agreement, either
   • party may serve notice that it wishes to commence collective bargaining. After
   • a period of direct bargaining (where, on average, 25-35 per cent of agreements
   • are settled) either party may file a notice of dispute with the Minister of
   • Labour, who then has a number of options, but usually appoints a conciliation
   • officer to assist the parties. If the parties cannot conclude an agreement at
   • this stage, the Minister may extend the conciliation phase by appointing a
   • conciliation commissioner or a conciliation board, or terminate conciliation
   • thus placing the parties in a legal strike/lock-out position. The parties have
   • the right to strike or lock out seven days after the end of conciliation. The
   • Minister also has the discretion to appoint a mediator at any time to assist
   • the parties, which he normally does when they indicate that mediation would
   • help in their negotiations.
4. 380. The vast majority of disputes are resolved during the conciliation
   • phase through free collective bargaining and governmental intervention with a
   • view to imposing settlements is relatively rare. According to the Government,
   • it is only when every avenue of dispute resolution has been exhausted and the
   • continuation of a particular dispute would have severe consequences for the
   • national interest that Parliament gives consideration to ad hoc emergency
   • legislation. When a circumstance of this nature arises, the objective of the
   • legislation is not only to terminate the work stoppage, but to provide a
   • mechanism to achieve a final settlement of all outstanding differences.
5. 381. The Government stresses the unique circumstances which make Canadian
   • economy highly dependent on rail transportation: large size of the country;
   • patterns of economic development and industrialisation; geographic dispersion
   • of resources; low population density; severe climatic conditions; and, in many
   • instances, virtual absence of viable economic alternatives to rail
   • transportation. The Government argues that all these factors make the economy
   • of Canada more dependent than most industrialised nations on its extensive
   • transportation infrastructure, of which railways are an intrinsic and key
   • component. A railway work stoppage has an almost immediate impact for the
   • continuing operations of a broad range of industries and employers.
6. 382. Perhaps no sector better illustrates these far-reaching consequences
   • than the grain industry, which generates $3.9 billion in export revenue. Grain
   • sales depend upon an integrated transportation and grain-handling system -
   • rail, trucks, country grain elevators, port operations, terminal elevators and
   • shipping including the St. Lawrence Seaway in the east. Disruption in one
   • sector affects the operation, economic efficiency and hence viability and
   • employment status of other transport modes. The thousands of grain farmers in
   • the prairie provinces, and also in Ontario and Quebec engaged in the
   • production of grains for domestic and export purposes are affected by a
   • shutdown of the rail transportation network. The major grain elevator
   • terminals involved in grain exports at Prince Rupert and Vancouver on the west
   • coast, and at Thunder Bay which comprises one of the largest grain-handling
   • facilities in the western world, rely exclusively on rail transport, as do
   • some 2,000 primary elevators throughout the prairie provinces. Numerous
   • transfer elevators along the St. Lawrence Seaway and in the Atlantic provinces
   • are also part of the grain export process. Some 7,000 rail cars of grain a
   • week are employed to transport prairie grain; in a recent crop year bulk
   • exports of grains and cereals totalled 30.2 million tonnes.
7. 383. The grain industry is only one example of the railway's importance for
   • the Canadian economy. Bulk commodities, a major component of foreign trade,
   • account for some 50 per cent of all railway traffic in tonnage terms; rail
   • exports represent 20 per cent of exports in value terms. Ultimately at stake
   • in a railway work stoppage are its consequences for the reliability of Canada
   • as a supplier of resources and goods and the continued economic viability of
   • the railway industry itself and whether it will be able to continue to fulfil
   • its vital role on which so much of the Canadian economy depends. A work
   • stoppage in the industry results in job losses and a significant loss of
   • revenue, and the industry's already diminished market share can be seriously
   • undermined as users of rail service seek alternative means to move goods and
   • products, a traffic loss that is at times irreversible.
8. 384. Dealing more specifically with the 1986-87 negotiations, the Government
   • emphasises the particularly complex bargaining structure then prevailing. On
   • the employer side, the two major companies, Canadian National (CN) and
   • Canadian Pacific (CP), agreed to come jointly to the bargaining table, but
   • they also bargained on behalf of eight subsidiary companies. On the union
   • side, the ARU grouped a number of interests from the running trades
   • (engineers, conductors and trainmen), non-operating employees (office, stores,
   • maintenance of way and signal employees) and two of the shopcraft unions
   • (carmen and electricians). To further complicate matters, only seven of the
   • nine member unions bargained with both railways through ARU; the two other
   • unions bargained at the ARU table with one railway, and at a separate table
   • with the other railway. According to the Government, this fragmentation on the
   • union side created obvious difficulties at the bargaining table. The
   • Conciliation Officer appointed by the Minister of Labour found the bargaining
   • situation even more complex than usual, partly due to the bargaining structure
   • and partly to the parties' widely opposed bargaining positions.
9. 385. The conciliation officer being unable to assist the parties in reaching
   • agreement, the Minister, bearing in mind the importance of the railway
   • industry to the Canadian economy, appointed a conciliation commissioner, who
   • concurred that the bargaining structure compounded the substantial issues at
   • the bargaining table. In his report, released on 10 August 1987, he dealt with
   • all the major items in dispute, recommending a two-year agreement with annual
   • increases of 3 per cent each year. During this period, as concern mounted
   • throughout the country, the media were full of reports on an impending strike,
   • a situation aggravated by the imminent release of the Conciliation
   • Commissioner's report on disputes with other railway bargaining units, and
   • their subsequent acquisition of the right to strike.
10. 386. At the request of the parties, the Minister appointed a mediator on 14
    • August 1987. Picketing began in some locations on 18 August, with ARU calling
    • a national strike on 23 August, after negotiations broke down despite the
    • mediator's assistance. The first day of the strike, the Minister sent a
    • telegram to the parties, advising them that the Government could not and would
    • not tolerate a shutdown of the nation's major transportation system, and
    • summoning the negotiating committees to resume bargaining with the assistance
    • of his Associate Deputy Minister, in a final attempt at mediation.
11. 387. The meetings began amid what the Government terms "a deluge of
    • representations from across the country", of which he gives a few examples. On
12. 27 August, shortly after the mediator announced no agreement could be reached,
    • the Minister introduced back-to-work legislation in the form of the
    • Maintenance of Railway Operations Act, 1987 (Bill C-85), which the House of
    • Commons adopted at 2 a.m. on 28 August.
13. 388. Bill C-85 provided that on the coming into force of Part I of the Act
    • (the only part germane to this complaint) the railway companies were required
    • to resume operations, and members of the unions then on strike were obliged to
    • resume the duties of their employment. The expired collective agreements were
    • extended until 31 December 1988 in order to ensure that the employees would
    • continue to be entitled to all the benefits and protections contained therein,
    • and an arbitrator was appointed to resolve the issues that were in dispute
    • between the parties. The Act further provided that the parties were entitled
    • to agree to amend any provision of the collective agreement (other than its
      • term), even one prescribed by the arbitrator. Financial penalties, equally
    • applicable to the employers and the unions, were provided for contraventions
    • of the Act.
14. 389. In the aftermath of adoption of Bill C-85, the difficulties which had
    • plagued negotiations from the start continued to hamper constructive dialogue
    • the end result being that, although the legislation had envisioned that the
    • arbitration process should only require 60 days, in all, it took almost 11
    • months to resolve the issues which had created the original impasse in
    • bargaining. By the time the final award was rendered, the extended collective
    • agreement had only another five and a half months to run, and the parties
    • would be back in bargaining in less than three months' time. Whether the
    • length of time that was required to resolve these six issues is attributable
    • to their complexity, or to the parties' failure to make a sincere effort to
    • resolve them prior to engaging in strike action, is impossible to determine.
    • It is evident, however, that had the Government not intervened, the parties
    • were quite prepared to subject the Canadian public to the devastating effects
    • of a prolonged work stoppage over their private differences.
15. 390. In conclusion, the Government submits that railways have always been
    • and continue to be of critical importance for the welfare of the Canadian
    • public. Numerous small communities are dependent on the railways for their
    • very existence. Producers of a number of key commodities, such as western
    • grain farmers, have no reasonable alternative means to get their products to
    • markets. Commuters in large urban centres rely on rail passenger services to
    • take them to and from their places of work. Because of the inter-relatedness
    • of the Canadian transportation network, the employment of workers in a number
    • of other industries depends upon the reliable operation of the railways. The
    • losses in personal income sustained by these individuals due to a rail strike
    • cannot be easily recovered, if at all, once the work stoppage ends. Thus, a
    • strike in the railway industry has far-reaching effects on the lives of many
    • other Canadians.
16. 391. The Government made every effort to promote a negotiated resolution, by
    • appointing a conciliation officer, a conciliation commissioner and a mediator.
    • In addition, the Minister gave the parties a final opportunity to resolve
    • their dispute through bargaining by providing the help of his Associate Deputy
    • Minister, but there was no indication that either party would be prepared to
    • change its position, no matter how prolonged the work stoppage might be.
17. 392. The Government has supported and continues to support free collective
    • bargaining process, but was obliged to balance the parties' right to freely
    • negotiate their collective agreements against the general welfare of the other
    • members of society and their right to pursue their livelihoods. In light of
    • the evidence that there was no likelihood that the parties would be capable of
    • reaching a negotiated resolution in the foreseeable future, the Government was
    • compelled to act in the public interest. The Maintenance of Railway Operations
    • Act, 1987, was formulated to be as unintrusive as possible into the parties'
    • relationship. The right to strike was only temporarily withdrawn, as the
    • collective agreements were extended just until 31 December 1988, a period of
    • some 16 months. The parties were entitled to serve notices to bargain for its
    • renewal any time after 1 October 1988. An arbitrator was appointed to resolve
    • the issues remaining in dispute between the parties, and his awards on the
    • various items were issued between February and July 1988. Even during the life
    • of the extended collective agreements, the parties were entitled to mutually
    • agree to amend any of its provisions.
18. 393. The Government admits that the Maintenance of Railway Operations Act,
19. 1987 placed temporary limits on the right of members of the Associated Railway
    • Unions to strike. However, it submits that such limitations were and are
    • consistent with the general principles embodied in the International Covenant
    • on Economic, Social and Cultural Rights and Convention No. 87 concerning
    • freedom of association and protection of the right to organise, which Canada
    • has ratified. The sole purpose of the Government in promulgating this
    • legislation was to protect the welfare of large segments of the Canadian
    • population from the serious adverse effects of a dispute which the parties had
    • demonstrated themselves incapable of resolving.

C. The Committee's conclusions

1. 394. The complainant alleges that the Government has infringed on the right
   • to strike of Canadian railway workers by adopting the Maintenance of Railway
   • Operations Act, 1987. For its part, the Government stresses the devastating
   • effects a long general strike would have had on many crucial sectors of the
   • Canadian economy: it submits that its only objective was to protect the
   • welfare of large segments of the population and that it was compelled to act
   • in the public interest.
2. 395. The Committee notes that the complainant and the Government generally
   • agree on the description of the events which led to the August 1987 strike and
   • to the adoption of back-to-work legislation, although the Government blames
   • the parties for their intransigent attitude and their inability to conclude a
   • negotiated settlement and, to a lesser extent, the complex bargaining
   • structure. The Committee observes that the Government used all the statutory
   • means at its disposal to promote a negotiated resolution but to no avail.
   • Whatever the immediate and underlying reasons for that dispute, the Committee
   • notes that the ARU, in complete conformity with the Canada Labour Code,
   • launched on 24 August 1987 a legal strike, which had been under way for five
   • days when the Maintenance of Railway Operations Act became law.
3. 396. Very early on, the Committee has laid down the principle that the right
   • to strike is one of the legitimate and essential means through which workers
   • and their organisations may defend their economic and social interests (Digest
   • of Decisions and Principles of the Freedom of Association Committee of the
   • Governing Body of the ILO, third edition, paras. 362 and 363, and cases
   • cited).
4. 397. It is also a well-established principle that the substitution by
   • legislative means of compulsory arbitration for the right to strike as a means
   • of resolving labour disputes can only be justified in a limited number of
   • situations: civil servants or workers in essential services in the strict
   • sense of the term, i.e. those services whose interruption would endanger the
   • life, personal safety or health of the whole or part of the population
   • (Digest, loc. cit., para. 387), provided however these workers have access to
   • adequate procedures, such as conciliation and arbitration, where the parties
   • concerned can participate at all stages and in which the awards are binding on
   • both parties and are fully and promptly implemented (202nd Report, Case No.
5. 931, para. 210, Canada).
6. 398. The Committee has previously been called upon to examine whether or not
   • a given activity or enterprise constituted an essential service according to
   • the above-mentioned criterion. There is not, and there cannot be, any hard and
   • fast rule allowing such a categorisation: what is meant by essential services
   • in the strict sense of the term depends to a large extent on the particular
   • circumstances prevailing in a country. Moreover, this concept is not absolute,
   • in the sense that a non-essential service may become essential if a strike
   • lasts beyond a certain time or extends beyond a certain scope, thus
   • endangering the life, personal safety or health of the whole or part of the
   • population. The Committee has indeed stated in the past that strikes may be
   • restricted and even prohibited, in the public service, essential services or a
   • key centre of a country's economy because - and to the extent that - a work
   • stoppage may cause serious harm to the national community (194th Report, Case
7. No. 893, para. 114, Canada, Alberta). More recently, the Committee has
   • restated this very principle, in a case concerning British Columbia, in the
   • following terms: whenever a total and prolonged strike in a vital sector of
   • the economy might cause a situation in which the life, health or personal
   • safety of the population might be endangered, a back-to-work order might be
   • lawful if applied to a specific category of staff in the event of a strike,
   • whose scope and duration could cause such a situation. However, a back-to-work
   • requirement outside such cases is contrary to the principles of freedom of
   • association (Case No. 1430, 256th Report, para. 189). The Committee also
   • recalls it has concluded on several occasions that transport, generally
   • speaking, does not fall within the category of essential services (Digest,
   • para. 407, and cases cited).
8. 399. In this case, the Government's arguments are essentially based on
   • economic considerations. It readily admits that the Maintenance of Railway
   • Operations Act, 1987 temporarily restricted the right to strike recognised to
   • members of the Associated Railway Unions, arguing however it was compelled to
   • act in the public interest. The Government was undoubtedly under heavy public
   • pressure to adopt back-to-work legislation, but the Committee recalls it has
   • dismissed similar economic arguments in comparable - though not identical -
   • cases (217th Report, Case No. 1099, para. 470; 234th Report, Case No. 1255,
   • para. 190, Norway), and in a case concerning the postal service in Canada
9. (202nd Report, Case No. 931, para. 211).
10. 400. Furthermore, in this instance, the strike was allowed to last only five
    • days before the Government decided to introduce back-to-work legislation. That
    • Act restricted, with an immediate application to a work stoppage called in
    • conformity with the law, the right to strike granted to railway workers by the
    • federal legislation. In all the circumstances, and despite the almost 11-month
    • period that was necessary after the enactment of the law to settle the issues
    • which created the initial impasse, the Maintenance of Railway Operations Act,
11. 1987 does not appear to be conducive to sound industrial relations, which
    • should be founded on a predictable and stable legislative framework respecting
    • the principles of freedom of association.
12. 401. The Committee is aware, given the particular situation of the railway
    • transport industry in Canada, that a total and prolonged stoppage in railway
    • services might lead to a situation of acute national emergency such as to
    • endanger the well-being of the population, which may in certain circumstances
    • justify the Government to intervene, for instance by establishing a minimum
    • service. In that respect, both the Committee and the Committee of Experts have
    • considered on previous occasions it would appear legitimate that a minimum
    • service be maintained in the event of a strike the extent and duration of
    • which might be such as to result in an acute national crisis endangering the
    • normal living conditions of the population. Such a minimum service should
    • however be confined to operations that are strictly necessary to avoid
    • endangering the life, personal safety or health of the whole or part of the
    • population; in addition, workers' organisations should be able to participate
    • if they so wish in defining such a service in the same way as employers and
    • the public authorities (Digest, loc. cit., para. 415;General Survey by the
    • Committee of Experts on the Application of Conventions and Recommendations
    • "Freedom of Association and Collective Bargaining", ILO, 1983, para. 215). As
    • the Committee emphasised in a recent case, the employers' and workers'
    • participation in the determination of essential services not only allows a
    • careful exchange of viewpoints on what in a given situation can be considered
    • as minimum services limited to the absolutely essential, but also contributes
    • to guaranteeing that the scope of the minimum services does not result in the
    • strike becoming ineffective in practice because of its limited impact, and to
    • dissipate possible impressions in the trade union organisations that a strike
    • has come to nothing because of over-generous and unilaterally fixed minimum
    • services (Case No. 1342, Spain, 244th Report, para. 154).