Canadian Union of Postal Workers

Canadian Union of Postal Workers (CUPW)

What Happened

After negotiations to renew their collective bargaining agreement failed, CUPW members began a series of rotating strikes. Twelve days after the strike began, Canada Post locked its workers out. Five days after the lockout, the federal government introduced ad hoc legislation that forced CUPW workers to return to work. This legislation had several unusual terms. First, it created a dispute resolution scheme allowing the Minister of Labour the power to appoint the arbitrator, instead of leaving it to the agreement of the parties. Second, the statute specified the types of considerations that the arbitrator was required to use in resolving the dispute. Third, the statute specified a maximum wage rate that was in fact lower than the employer’s last offer before the lockout. For these reasons, the statute constituted a significant governmental interference with the parties’ ability to collectively bargain, let alone the union’s right to strike.

Since its creation in 1965, CUPW has been involved in approximately 19 major labour disputes covering a multitude of topics, and has advanced a number of key labour-related issues over the years. Most notably, the “wildcat” strike of 1965 was instrumental in obtaining collective bargaining rights for Canadian civil servants. Another noteworthy accomplishment was paid maternity leave for members in 1981, making CUPW the first national union to win this right. However, since the late 80’s, the union’s efforts to safeguard worker rights have been severely curtailed by a series of laws, culminating with the most restrictive to date: Bill C-6.

The beginning of the current labour dispute can be traced back to October 2007. The urban postal worker’s contract was set to expire shortly thereafter. Lisa Raitt, the Conservative Labour Minister, appointed Jacques Lessard to act as conciliator between CUPW and Canada Post Corporation (Canada Post).

Lessard’s appointment not only marked the beginning of official negotiations; it also represented the start of an 81-day period, at the end of which, either party reserved the right to strike or lockout if negotiations failed. CUPW’s collective agreement expired on January 31st 2011, without an agreement being reached.

Points of disagreement

One of the main points of disagreement was Canada Post’s insistence on creating a new “two-tier system of employees.” Under such a scheme, all new employees would earn 30 per cent less, would receive reduced benefits, a watered-downed pension and weaker job security.

More specifically, Canada Post was pushing to change the collective agreement so that all future employees would also be paid at a significantly lower rate, and would be required to work for seven years in order to receive the same salary as current staff. Furthermore, recently hired employees would have to work longer before being entitled to an increase in vacation leave, and would have an inferior pension plan as compared to existing employees.

Canada Post also planned to replace the traditional approach of building up sick days with a model based on a short-term disability system that would be administered by a third party. The third party would hold administrative powers such as deciding when union members get to use their benefits and how much time off they can take from work.

Rotating strikes in some regions begin

On April 18th 2011, 94.5 per cent of CUPW’s voting members expressed their support for a strike mandate if necessary. The voting represented the largest turnout and strongest mandate in CUPW history.

With little to no progress being made at the negotiating table, and after giving Canada Post the required 72-hour notice on May 30th, CUPW called upon its members to exercise a legal rotating strike designed to prevent disruption of service in any given city for extended periods. In response, Canada Post declared that it would no longer respect the collective agreement, thus suspending vacation leave and health benefits - including drug coverage for those on sick leave and disability insurance.

On June 2nd, 2011, CUPW members in Winnipeg and Hamilton began to strike - the first strike to affect Canada Post in 14 years. The two sides had agreed to have CUPW volunteers deliver Canada Pension Plan, Old Age Security and Child Benefits in the event of a strike.

Canada Post locks out employees

On June 10th, the union agreed to suspend strike activity and continue to negotiate: it proposed to go back to work under the previous collective agreement. Canada Post refused.

Then, four days later, Canada Post locked out its workers. According to Canada Post, the lockout was the best way to resolve the conflict and to make CUPW seriously consider proposals that would address declining mail volumes and the pension deficit.

Back to work legislation

On June 20th, the union and management agreed to go back to the negotiating table. But just hours later, the Harper government tabled back-to-work legislation - Bill C-6.

During the negotiating process, the federal government had been reluctant to get involved in the postal dispute. New Democrat MP Anne Minh-Thu Quach accused the government of remaining passive in order to force a lockout and subsequently introduce harsh back-to-work legislation. CUPW president Denis Lemelin also accused the Conservatives government of holding Canadian mail hostage.

For its part, the Conservative government has repeatedly claimed that its actions were aimed at protecting the well-being of the Canadian economy. In a speech to the Commons, Prime Minister Harper expressed his concern over the labour dispute, stating that the impasse in negotiations threatened to jeopardize economic recovery.

CUPW continues to oppose changes to its sick leave entitlement, vacation leave and pension program.

How back-to-work legislation ‘works’

While back to work legislation is relatively common in Canada (unlike most other countries), the content of the statute legislating the parties back to work in this case was unusual in five key ways.
First, back to work legislation is usually used only when a strike or the lockout is of long duration. In this case, the government introduced the back to work legislation only 5 days after the lockout began.

Second, rather than allowing the parties to select their arbitrator by consensus, the Harper government reserved the right to appoint the arbitrator itself.

Third, the government imposed a specific type of arbitral process to be undertaken, called “final offer selection.” This model requires the arbitrator to accept one party’s proposal in full, such that the arbitrator cannot craft a compromise position between the parties.

Fourth, the government used the statute to require the arbitrator to take certain things into consideration when deciding between proposals, such as the long-term economic viability and competitiveness of the corporation, and that the solvency ratio of the pension plan could not be adversely affected by the terms of the new agreement.

Fifth, the back to work legislation specified the maximum wage rate that the arbitrator could impose. This was highly unusual, not only because it removed a central bargaining issue from the parties’ control, but also because it allowed the government to specify a maximum wage rate in the statute that was lower than the last offer from the employer.

Federal court rules against the government’s choice of arbitrator

The union not only opposed the government’s interference in the dispute, but also the specific arbitrator they chose to impose on negotiations. The union argued that the government-imposed arbitrator did not possess a background in industrial relations, and was not bilingual, although negotiation between these parties usually occurs in French.

So the union applied to the Federal Court to request a judicial review of the Minister of Labour’s decision to select that particular arbitrator. The arbitrator ultimately resigned before the challenge was heard, but the Court decided to hear the case nontheless.

The Court held that the Minister of Labour must consider the arbitrator’s labour relations expertise, independence, impartiality, and general acceptability to the labour relations community when she exercises her discretion to appoint an arbitrator. In so doing, the Federal Court Judge quoted the National Academy of Arbitrators (which was an intervener in the case):

If arbitrators are, or are perceived to be, a surrogate of either party or of the government, or appointed to serve the interests of either party or of the government, the system loses the trust and confidence of the parties, elements essential to industrial relations peace and stability… A lack of confidence in arbitration would invite labour unrest and the disruption of services, the very problem impartial interest arbitration was designed to prevent [C1].

Union launches constitutional challenge

In addition to challenging the appointment of the arbitrator, CUPW commenced a constitutional challenge against the federal government in October 2011 [C2]. The union’s constitutional challenge alleges that the Harper government’s back to work legislation, Bill C-6:

  • violates the union members’ constitutional right to free expression under s. 2(b) of the Canadian Charter of Rights and Freedoms (the Charter);
  • violates their right to free association under s.2(d) of the Charter; and
  • violates their right to equality under s.15(1).

Legal arguments will likely focus on two out of these three allegation. Firstly, the courts will have to decide whether the Bill C-6 requirements regarding the pension plan’s solvency amounts to age-based discrimination under s.15(1) of the Charter. Secondly, the courts will have to decide whether the Harper government’s Bill C-6 violates the free association rights of CUPW members under s.2(d) of the Charter, such as their right to collective bargaining and the right to strike.

Union rights protections still unclear

In 2007, after decades of minimal constitutional protections for trade union activity, the Supreme Court of Canada ruled that the constitutional protection of freedom of association includes the right to collective bargaining, which could not be substantially interfered with by the government.

The scope of the new constitutional protections for union rights remains somewhat unclear because the Supreme Court has not yet had the opportunity to determine whether the constitutional protection of labour rights and freedom of association includes the right to strike. However, a recent decision of the Saskatchewan Queen’s Bench has answered this question in the affirmative [C3], lending some persuasive authority to the idea.

CUPW and the government have not yet presented their arguments regarding the constitutional challenge to the Court. Nonetheless, it seems likely that both the right to strike, and the scope of the right to collective bargaining, will be before the Court in this case.

Relevant Dates

  • January 31, 2011: CUPW’s collective agreement expires.
  • April 18, 2011: Union members vote overwhelmingly for a strike mandate.
  • June 2, 2011: CUPW begins legal, rotating strikes in Winnipeg and Hamilton.
  • June 10, 2011. CUPW agrees to suspend strike activity if its members go back to work under the previous collective agreement. Canada Post rejects the offer.
  • June 14, 2011: Canada Post announces a lockout, causing complete disruption in postal services.
  • June 20, 2011: The Conservative government introduces back-to-work legislation.
  • June 27, 2011: With the enactment of Bill C-6, work stoppage ends and postal workers are forced to go back to work.
  • October 11th, 2011: CUPW files an application with the Ontario Superior Court of Justice against the Attorney General, alleging Charter breaches by Bill C-6.
  • January 27th, 2012: The Federal Court of Canada issues its decision regarding the manner in which the Minister must exercise her discretion in appointing an arbitrator: 2012 FC 110

Role or Position

The Canadian Union of Postal Workers (CUPW) is a democratic public sector trade union with around 54,000 members. CUPW represents postal workers employed at Canada Post as well as private sector workers. It was created in 1965 out of the Canadian Postal Employees Association.

Implications and Consequences

  • Rule of Law: The right to collective bargaining is guaranteed under section 2(d) of the Canadian Charter of Rights and Freedoms [C4]. This is legally provided for by provincial labour relations statutes, which allow each party to wield the strike or lockout tool to exercise bargaining leverage. But in this case, the parties had no opportunity to use that leverage to resolve their disputes. The threat by the government to use back to work legislation prior to a work stoppage, and its subsequent enactment, effectively interfered with the parties’ exercise of their statutory and constitutional rights.
  • Rule of Law: The right to free expression is guaranteed by section 2(b) of the Charter. Participating in collective action to protest one’s terms and conditions of employment is a form of expression that was abrogated by the enactment of the back to work legislation.
  • Democracy: A collective bargaining agreement is intended to operate as a constitution for the workplace, where workers’ representatives and management’s representatives participate in formulating the terms of their relationship. Arbitration is the judicial process that interprets the collective bargaining agreement. For this reason, arbitration is usually conducted by an appointee agreed to by the parties. At specific intervals, the parties are legally allowed to use the strike or the lockout to improve their bargaining position. Theoretically, the role of the government is to supervise respect for the laws that guide this process. Bill C-6 alters that process and threatens the democratic nature of collective bargaining. It does so by limiting the ability of workers to engage in bargaining over the terms and conditions of their work relationships on the basis of the full strength of their economic leverage, without creating an impartial dispute-resolution mechanism to compensate for the lack of the ability to strike.
  • Equality: The content and timing of Bill C-6 suggests that the government effectively took the employer’s side in this dispute. This violates the position of neutrality the government is intended to occupy between employers and unions under our current system of labour relations.
  • Equality: Canada Posts’s proposed changes to working conditions would create two classes of employees: new employees will receive inferior wages and benefits in contrast to CUPW workers hired prior to the dispute. There is particular concern over the age effects of pension changes suggested by the terms of the statute. This type of labour policy will inevitably lead to greater social and economic inequality. When the government enforced an even more austere plan on workers who were already locked out of their jobs, it disregarded the value of equality for all Canadians.
  • Transparency: The Federal Court specifically noted that the Minister of Labour lacked transparency when she appointed an arbitrator to resolve the CUPW dispute.

Date updated: 20 April 2012

Photo: The Canadian Press/Adrian Wyld


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