Canadian Companies Adapt to Changing Work Force

Canadian Companies Adapt to Changing Work Force

MISSISSAUGA, Ontario — Canada’s unionized labor force is undergoing demographic changes and a generational shift in priorities that are changing long-established ways that transportation and waterfront employers address contract negotiations and work rules.

The generous pension plans and employment practices negotiated in union contracts during times of stronger economic growth and employment are creating a burden on employers and unions alike that will have to be resolved as older workers retire and younger workers with different values replace them, according to a panel on entitled Waterfront and Transportation Labor Environment at the JOC’s Canada Maritime Conference here this week.

“The option of asking employers for more money (for pensions) is not there at the moment,” said Jean Bedard, president and CEO of Canada’s Maritime Employers Association. “Overoptimistic expectations from the ’80s for retirees are difficult to maintain for current employees. This creates a situation at the negotiating table where everyone is trying to find solution without affecting business.”

He said recent labor disruptions by unions were related to the pension issue. “Huge deficits were accumulated from past pension commitments,” he said. “We are not responsible for those deficits, but that doesn’t mean they will go away.”

As Baby Boom workers retire, they are being replaced by generation X and Y workers, who have a different set of attitudes toward work. “The X and Y generations are well qualified and good workers, but don’t subscribe to the all-work notion,” Bedard said. “Older workers want to make more money, while Gen X and Y want more balance in their work. It’s difficult to cover in the agreement. Who has preference on the day shift, or overtime? There is no answer on the union side, which is struggling with it.”

Employers, however, need to be able to schedule work shifts to meet operational needs. When they are unable to negotiate work rules and wage issues in expiring contracts with unions, employers are increasingly agreeing to longer-term contracts of up to eight years, instead of the prevailing one to two-year contracts. The longer contracts have clauses that allow both sides to reopen the contracts to address unresolved issues. That takes the pressure off the negotiators and encourages both sides to work toward a solution.

“During Port of Montreal negotiations, we signed the agreement and left open problems to discuss during the course of agreement,” Bedard said. “You know what? It worked. We are working in an environment with less stress as a result of being able to look together for solutions.”

Ron Tepper, president and CEO of the less-than-truckload motor carrier Consolidated Fastfrate, said tracking companies should be able to compete on innovation rather than on the wage costs resulting from whether or not they are good contract negotiators. He said labor contracts should extend for five years or more, instead of the current two or three years so they can provide more stability. “Unions are being forced to focus on the same economic issues as we are,” he said. “Unions now understand the competitive landscape that employers are facing.”

Another issue in the labor market of concern to the panel is the retention of workers during a period of high retirement. Demographic changes are causing changes for unions. “Up to 1,200 people per day started leaving the work force from 2008 on,” said Doug Fisher, senior director of labor relations for CN Railway. “That’s a lot of talent leaving.”

He said the next generation of workers is not particularly interested in being union members and wants to be rewarded on the basis of merit, not union membership. “But unions are not going away. They have been here for 100 years,” Fisher said.

Canadian railroads have become more proactive in heading off potential labor problems, he said. They are training non-union workers to operate the railroads in case of labor disruptions, but they are also training union workers to become more engaged in their work. “We need to encourage a total logistics mindset in our employees, so they understand they are part of the supply chain and provide better service,” Fisher said. This is important because “competition is rampant between rails and trucks.”

Contact Peter T. Leach at pleach@joc.com and follow him at twitter.com/petertleach.