The looming work stoppage in the rail sector could have major consequences for the Canadian economy. Still, special legislation is unlikely, according to one expert, who believes rail workers have the upper hand in negotiations.
If a last-minute agreement is not reached by 12:01 a.m. Thursday, nearly 10,000 employees of Canadian National Railway Company (CN) and Canadian Pacific Kansas City (CPKC) could walk off the job. CN employees would be locked out, while CPKC employees would begin a strike at the same time.
Despite several months of negotiations, discussions have stumbled, particularly over questions of timetables, the availability of teams in the region and the provisions for “fatigue management”.
A special law or not?
“The mere threat of special legislation can make companies no longer feel the need to negotiate,” laments Christopher Monette, director of public affairs for Teamsters Canada, the union that represents CN and CPKC employees. “This is what we have seen many times in the rail industry.”
That said, the adoption of a special law to force railway workers to work is unlikely, according to Raoul Gebert, professor of human resources management at the University of Sherbrooke. “There is a risk that a special law will not pass the test of a subsequent review by the courts,” he believes.
“In 2015, the Supreme Court issued two important decisions in labor law […] that severely limit what governments can do with respect to special laws,” the expert says. As a result, governments can no longer abrogate a free negotiation cycle between unions and employers. Since then, “governments have been reluctant to test how far the Supreme Court is prepared to go,” he says.
The government could, however, put pressure “behind the scenes” to get the parties to come together. It could also send signals to the Canada Industrial Relations Board, which has the power to determine which essential services should be maintained “for the health and safety of the population.”
The big end of the stick
“Strikes in the railway sector […] “are rarely very long” and it’s often more a matter of hours than days, says Professor Gebert. “The profits that are lost on a daily basis by these companies – because they are very, very, very profitable companies – are such that the loss after a week of strike or lockout would be enormous.”
In this context, the costs that would be incurred by wage increases or the granting of better working conditions are not comparable to the profits that could be lost in a dispute that drags on, he believes. “I would expect more that there would be a negotiated agreement a few hours before or after the deadline for the start of the lockout or strike.”
Does this mean that employees now have the upper hand? “A priori, yes,” says Mr. Gebert. “The companies are very profitable, the sector is growing, there is no government that would try, in my opinion, to pass a special law.” Unless a work stoppage drags on for weeks.
The fact that the same union represents employees of both companies is also an asset for the railway workers, according to the expert. In this type of negotiation, “we identify the company that we consider to be in a better position […] and we’re going to make an agreement,” he explains. Then, the company that doesn’t have an agreement will feel a lot of pressure to make one, not wanting to lose market share to its competitor.
“You also see this in Quebec in the hotel sector,” he says, where the same union negotiates collective agreements for employees of about thirty hotels at the same time.
Still “a lot of distance”
Even before the fateful hour, the two companies have already suspended the circulation of certain goods on their network. The possibility of a work stoppage also raises the concern of several economic players.
On Tuesday, Quebec Manufacturers and Exporters asked the Government of Canada to force arbitration to avoid a work stoppage. On Monday, the Federation of Quebec Chambers of Commerce and the Canadian Federation of Independent Business demanded government intervention.
A path that is not being considered for the moment by the federal Minister of Labour, Steven MacKinnon. “Settle this at the table,” he wrote on the social network X on Tuesday. Mr. MacKinnon must meet with the different camps “in the next 24 hours.”
CN deplores the dragging-on negotiations and the rejection of employer proposals made so far. “There is still a lot, a lot of distance between the two parties,” CN indicated to Duty its director of public affairs and media relations, Jonathan Abecassis. “We will stay at the table until we find an agreement. That being said, we believe that if the union does not start to show some seriousness, the minister will have to reconsider his position and intervene,” says Mr. Abecassis.
The CPKC says it is “firmly determined to remain at the negotiating table to reach renewed agreements.” “We do not want a strike or a lockout,” says director of government affairs and communications André Hannoush in an email.