I hope it is self-evident that in any business relationship, including that between employer and employee, trust increases productivity.
Today, it’s becoming increasingly evident that trust is gone between our public-sector employees and our governments, and it is hurting us all. I have a proposal to save the relationship, without sacrificing basic business principles.
Political brinkmanship has started to interfere with a sound business approach to the management of our municipal and provincial employees.
Deepening public-sector labour strife brews in Alberta today. The Alberta Teacher’s Association, frustrated with classroom conditions and measly wage offers, is planning job action in January.
Recently, in Alberta’s most populous city, the Calgary Police Association expressed their frustration (via beards, ball caps and blue sweaters) with their arbitration process. In the quasi-public-sector side of things, CBC technicians are now on strike.
Naturally, introducing private-sector thinking into public-sector disputes such as these is not easy. After all, the key ingredients are missing: competition and the threat of bankruptcy.
Without fair competition and a profit incentive, the traditional bargaining process cannot work.
In a private-sector setting, if a company isn’t paying its people fairly, they leave. And if it pays too generously, a competitor moves in to steal contracts, robbing both the business of its customers and the union of its members.
This counterbalancing helps keep everyone honest.
But for the police, teachers and CBC technicians, this matrix does not function – in the short term. Striking is more like hostage-taking, and our governments, obviously, have no profit motive.
Even in the public-sector labour market, ‘corrections’ tend to emerge anyway, by inflation or currency de-valuations on the one extreme, or shortages, on the other. But these are painful side effects to unnecessary problems.
If public-sector companies pay higher than market value and attract the best workers, the private sector will be forced into relative inefficiency, because the inflated labour market will raise companies’ costs as they either seek to woo those top-notch people or are forced to use less-efficient employees. This hurts the Canadian dollar or boosts prices, or both.
But if public-sector workers are paid below market value for their services, a shortage will gradually emerge, as we see with the current nursing crisis. This forces the government to choose between providing fewer services or increasing expenditures to pay for extra labour costs.
In other words, over the long haul there is no way for governments to avoid natural market pressures. Logic would say that the best way to ensure fair public-sector contracts is through market-sensitive calculations.
It would be dangerous to deny our governments their right to innovate – to decide, for example, that 100 kids in each classroom might be a fair number (for whatever reason). After all, we, the electorate, can always take our leaders to task for making decisions that hurt our kids (by voting them out of a job), but there is an effective monopoly on who teaches them.
Which leads me to propose one simple common-sense idea: the strategic use of final offer selection (FOS) arbitration. It is not a panacea, but it has real potential. The provincial government of Nova Scotia used this tool to settle the serious dispute it had with its nurses last summer.
There are many variations on the theme, but the premise of FOS is simple. It involves a pure either-or decision, versus a “compromise” position, by the arbiter. With FOS, the judge or judges must choose between one of only two final offers, with both parties agreeing in advance to abide by the decision. This mechanism, apparently, has never been used in Alberta.
What a shame.
According to a Human Resource Development Canada study, this tool is not used in federal negotiations because it always involves a clear winner and loser. Presumably, if the government comes out the winner, the worry is that they will antagonize their own employees, while if they lose, they may antagonize the electorate.
For Dan MacLennan, president of the Alberta Union of Provincial Employees, it’s all up to the members. And, like our governments, his members do not want FOS.
When the chips are down, he says, the easiest way to build support is through a focus on clear issues of egregious unfairness.
I assume he means that no one wants to forfeit control when issues of right and wrong are at stake.
Plus, his experience with the Alberta Labour Relations Board, the ultimate labour judge in this province, gives him little confidence in the fairness of the final decision-maker. It’s largely a matter of trust. And he doesn’t have any.
So neither side likes FOS because neither side has larger interests in mind. In the traditional bargaining and arbitration process, Calgary police officers, not to mention the city itself, have literally wasted years – and millions of dollars – fighting over hundreds of clauses.
And their case is not exceptional. From nurses to transit workers, work-stoppage impasses are now the norm, a rare thing in most private-sector bargaining.
There is no incentive for either side to put realistic offers forward, especially in any sector deemed essential. Each bargaining team expects that an arbiter will impose a settlement, so the stronger their respective positions, the greater the likelihood that the final decision will be favourable. The result is an expensive conflict that fosters deep animosity.
I do not want to see forced FOS. My hope is simply that one side – and it matters little which one – will have the courage to take the humble road in the interest of rebuilding relationships. After all, it would signal a willingness to cut the crap.
In the end, all public-sector negotiations will be borne by the market. So let’s stop the power trips so we can struggle with the real issue, putting a dollar value on what the work is actually worth.To do that well, we need far fewer lawyers, and a lot more economists.
