Contract is a "con-trick"
In the province of Ontario public sector unions, representing over 950 thousand workers, are facing cutbacks in services, pay and working conditions that amount to $9 billion - all in the name of a "social contract". But as our correspondent explains the "contract" is little more
International Viewpoint #248 September 1993 than a "con-trick". BARRY WEISLEDER* — Toronto, July 30, 1993
F there was ever any doubt, it is now crystal clear that Ontario New Democratic Party (NDP) Premier, Bob Rae, ' has made his bed with big business, and he intends to sleep in it.
Yet top labour leaders are failing to make any serious effort to disrupt Rae's summer tryst with the business class by initiating the kinds of actions the Premier cannot afford to ignore: work-to-rule, mammoth public protests, local strike votes and a challenge to Rae's leadership within the NDP.
This failure is remarkable given the high
With the adoption of Bill 48, the Social Contract Act, the Ontario government has imposed the most reactionary, anti-labour legislation seen in decades in order to grab $2 billion from the pockets of public sector workers.
This comes on top of the over $4 billion cut in government programmes and services (eliminating over 11 thousand jobs) announced in late April, and the $2 billion tax increase (mostly hitting middle income earners) sprung in the May provincial budget.
The government says neither of these moves is negotiable within the "social contract" framework; only how to come up with a further $2 billion in wage cuts.
And if unions and employers, spread across eight sectors, from health to education, do not meet the sectoral fiscal targets by the August 1 deadline, Bill 48 allows the government to impose a three year freeze on wages, benefits and all other increments, retroactive from June 14.
Negotiated improvements are not just postponed for three years — they are cancelled.
Bill 48's "fail safe measures" also give employers the power to extract up to twelve days leave without pay in each of the three years. Employers gain free rein to adjust workload, holidays and to impose layoffs at will.
For example, school boards less concer30 ned about the quality of education than about protecting lavish senior management salaries and perks have already indicated that they intend to designate professional development days as unpaid leave days and to upwardly revise pupil-teacher ratios. "Enabling legislation" accompanying the Social Contract Act permits this kind of contract stripping.
Ironically, when former federal Liberal Prime Minister Pierre Trudeau imposed a "controls" law in 1975, it was far less intrusive into collective agreements.
Also, Trudeau's Anti-Inflation Board at least claimed to control prices as well as
Bob Rae's controls make no such pretence. Assuming a rate of inflation of 3% over each of the next three years, plus the approximately 5% that would be lost in wage deductions for unpaid leave in the first year alone, nearly 1 million Ontario public service workers stand to suffer at least a 14% decline in real wages.
### Private sector
This precedent and example will not go unnoticed by employers in the private sector. Nor is this merely a temporary or short-term setback.
Although the scheduled wage controls are expected to end on March 31, 1996, the Social Contract Act itself, including "enabling" amendments to other labour laws, has no fixed termination date.
Nothing prevents the next (Liberal or Tory) Ontario government from extending the wage freeze, or other provisions, for another three years, or longer! Bob Rae, in crafting this type of anti-labour "War Measures Act", is handing the rulers and their state a major weapon — one that is deadly to free collective bargaining for at least three years, and potentially permanent.
In an olympian display of political cynicism and manipulation, the provincial sions will not be undermined, exemption from the freeze for workers earning less than $30 thousand a year, a pledge that Pay Equity will not be harmed and reduced sectoral fiscal targets for unions that sign a deal.
Responding to labour indignation over the horrendous prospect of re-opening collective agreements, Rae seemed to extend an olive branch to public sector unions by offering to let existing contracts expire before the freeze is imposed in each case.
Quick examination of the details however, reveals that the carrot attached to the stick is a thoroughly poisoned one.
To begin with, there is no guaranteed job offer for laid-off workers. Only re-deployment "where a suitable vacancy exists". Guess who determines what is "suitable"?
Given the dearth of hiring in the public service today, combined with massive cutbacks in funding, re-deployment may, in any case, be a purely academic question.
Furthermore, there is no guarantee that a worker will not be re-deployed into a job with a significantly lower salary.
And what about the $300 million job security fund? The government says it can be used either to top-up a lay-off victims Unemployment Insurance (UI) benefits to 95 per cent of former salary, or it can be given to employers (yet another subsidy to the bosses) to extend notice of lay-off for one year. But after the year is up, the worker is still out of a job, and/or out of the Ul bene-
The job security fund is limited to $100 million per year. This fund could be quickly exhausted by the large number of lay-off notices employers will feel compelled to issue in order to meet fiscal targets in the weeks ahead. Government transfer payment cuts to employers in the broader public sector came into effect on July 1.
Incidentally, none of the job security measures applies to the 11,000 workers given termination notices arising from the $4 billion cuts announced in April. Remember, * The author is a member of the Executive of the Ontario Public Service Employees Union and of the section of the Fourth International in the Canadian state.
1. Each state in Canada has its own premier or prime minister. The NDP is the Canadian affiliate of the social democratic Socialist International.
2. All figures are in Canadian dollars.
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• CANADA government is attempting to make its pack- age of service and labour cutbacks more palatable by promising the following: job security protection, the assurance that pen-
International Viewpoint #248 September 1993 that part is not negotiable.
Oh yes, there is one more little problem. The federal workers who administer Ul have told Ontario leaders of the Canadian Union of Public Employees (CUPE) that a Ul top-up is legal only in the event of a temporary lay-off. Without changes to federal regulations, that would leave the majority of those laid off either disqualified, or solely on UI...
Concerning pensions, it is difficult to believe that government when it promises not to undermine the actuarial soundness of pension plans by with holding its contributions (and thus forcing workers to pay more in the future to keep plans afloat) given that just before the 3 June break down in social contract talks government negotiators said Queen's Park would be saving $500 million in contributions in each of the three years of the projected pact. Rae's promise of joint union trusteeship of pension plans, labour's long standing demand, would be hollow compensation for a gutting of the funds.
Even putting that aside, however, workers nearing retirement will be severely harmed by the wage freeze because pension levels are determined by a workers best five years of earnings, which are usually the last five years. Reduced pensions will be Bob Rae's lasting legacy to older workers.
Exemption from the freeze for workers earning less than $30 thousand is also not assured because the earnings of part-time and on-call workers (like substitute teachers) will be calculated as an annual full-time wage pushing many above the cut-off, even though their real earnings are below the
Pay Equity gains are threatened too, if only for the fact that members of the target groups (women, black and other ethnic minorities, Aboriginal peoples and the physically disabled) will likely be laid off in disproportionate numbers.
Despite the government's claim to be guided by social conscience, regulations in Bill 48 over-ride workers' protection under other laws, like the Employment Standards
Act, grievance rights if dismissed, working conditions and benefits.
According to Sack Goldblatt Mitchell, Bob Rae's former law firm, Bill 48 would allow the government to arbitrarily replace a union refusing to co-operate on concessions with a company union that would bargain for its members under the social contract.
What an incentive for labour to reach an amicable consensus with government!
And what could be more cynical than the government's offer to reduce sectoral fiscal targets by 20 per cent where sectoral agreements are reached between unions and employers? This clearly demonstrates that the fiscal targets were arbitrarily set, and that the offer of target reductions is a political ploy in a political power game, the aim of which is to show Bay Street that an NDP government is capable of hobbling public sector unions and establishing a lower-level playing field for all the bosses to enjoy, across the public and private sectors.
Finally, there is the offer to let existing collective agreements expire before controls take over. Rae picked up this gem from tough-talking, sweetheart-dealer Ted Roscoe, Canadian director of the Service Employees International Union (SEIU). Some union leaders seem to think that such a gimmick would create the illusion that they had preserved the sanctity of contracts.
But it would not really protect the integrity of collective agreements. Many local union branches have recently signed two-year deals with 0 percent in both years. Five years of zero destroys a worker's purchasing power, tears away any longstanding mechanism for cost of living adjustment and, as argued above, undermines pension earnings.
### Speed-up
Neither would a postponement of the wage freeze prevent employer tampering with staffing ratios, and other forms of contract stripping, resulting in drastic worker speed-up, and rising stress and accident levels on the job. Cuts in services to the public would simply proceed unhampered.
Union collaboration with this Social
Contract, whether it is phased in or otherwise, is no face saver for anyone except
No union should be a party to such a brutal assault on the rights of working people. Let the labour traitors legislate and enforce their odious programme if they will;
workers should resist every inch of the way,
Bill 48 should be rescinded, not amended. The earlier $4 billion cuts should be reversed. And Bob Rae should be removed from the party leadership if he refuses to break the government from its present cour-
The Public Services Coalition, comprised of some twenty eight unions and associations, remains intact. It organised a march and rally in Toronto on July 10 to oppose Bill 48
But the coalition lacks a winning strategy that can unite non-unionised workers, the unemployed, as well as private and public sector employees in a struggle to save public services and defeat the bosses' austerity drive. This was evident in the protest rallies held in eighteen cities across Ontario on 29 May which drew few people outside the ranks of the sponsoring provincial public sector unions. The same was true at the rally in Gananoque, Ontario, site of the Ontario NDP Provincial Council meeting on June
The high point of Coalition solidarity, when the unions broke off the talks on June 3 in the face of a provocative "final offer" from the government, quickly withered on the vine without any serious mass action follow up in work places, combined with broader community coalition building
Inaction allowed the government to regain the initiative.
The Coalition for a Peoples' Agenda, based in the Toronto-Hamilton-Niagara area, is correctly attempting to bridge the social sector gaps, to instigate mass actions, and to agitate inside the Ontario NDP for a leadership review — but it lacks the necessary union resources and involvement to really take off.
And now the Public Services Union Coalition is under increasing strain as a number of its components stumble back to sectoral bargaining tables under the draconian terms of Bill 48.
Unfortunately, with the Ontario Public Service Employees Union (whose executive voted by 21-7 to return) and SEIU leading the retreat, smaller organisations in the Ontario public sector feel pressured to "be there too" to protect their interests in the event a deal is made. So far, CUPE Ontario is refusing to go back, partly under orders from a large June 19 divisional conference. and partly because its highly autonomous local branches tend to reserve bargaining to themselves and may try to cut deals with their immediate employers.
It made sense in May for unions to be at a central bargaining table, and perhaps at sectoral tables too, using that situation as a platform to expose government intransigence and to publicly present viable union alternatives to cutbacks.
Today, in the wake of Bill 48, it makes no sense. It only gives credence to a discredited and destructive process that disorients our members and sidelines our allies. And it leads inexorably to worker concessions, with a union signature on the bottom line that will haunt the signatories for decades.
The crucial perspective of an all-out struggle, focussed on mass political action and the broadest public mobilisations against the government, is undermined by the spectacle of important unions at concession-driven sectoral tables.
As the saying goes, it is hard to suck and blow at the same time. *
3. Bay Street is the name given to Canada's main financial district. Similar to London's "City" or New York's "Wall Street".
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