Collective Bargaining in the Canadian Public Sector, 1978–2008: The Consequences of Restraint and Structural Change
| Date | 01 March 2016 |
| Published date | 01 March 2016 |
| Author | Robert Hebdon,Michele Campolieti,Benjamin Dachis |
| DOI | http://doi.org/10.1111/bjir.12082 |
Collective Bargaining in the Canadian
Public Sector, 1978–2008: The
Consequences of Restraint and
Structural Change
Michele Campolieti, Robert Hebdon and
Benjamin Dachis
Abstract
We study public-sector bargaining and contract outcomes using Canadian data
from 1978 to 2008. We have a number of interesting results, but our principal
findings are from our analysis of wage settlements. We find that the essential
services designation, which only allows non-essential members of a bargain unit
to strike, is associated with decreases in wages. Our estimates also suggest that
there is an arbitration wage premium and that making adjustments to the ability
to pay criterion used by arbitrators to determine awards does not affect this
premium. We also discuss the implications of our estimates.
1. Introduction
The last several decades have been a time of transition and upheaval in the
public sector. A combination of economic and political forces has initiated an
era of structural change in public-sector employment arrangements in the
USA and Canada (Hebdon et al. 2013; Swimmer 2001). This shift in the
economic and political environment has led to a movement towards effi-
ciency in delivering public-sector outputs and a ‘new public management’
(Hebdon and Kirkpatrick 2005). Some of these changes in the public sector
include greater non-standard or contingent employment, privatization,
transferring services to other levels of government, as well as restructuring
and other cost-saving initiatives (e.g., among others, Beaumont 1996;
Thompson 1995; Gunderson 2002; Jalette and Hebdon 2012).
Michele Campolieti is at the University of Toronto. Robert Hebdon is at McGill University.
Benjamin Dachis is at C.D. Howe Institute.
© 2014 John Wiley & Sons Ltd/London School of Economics. Published by John Wiley & Sons Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
British Journal of Industrial Relations
54:1 March 2016 0007–1080 pp. 192–213
doi: 10.1111/bjir.12082
Governments responded to the deep recession of the early 1990s by chang-
ing the collective bargaining process in various ways. For example, in
Canada, some governments used legislation that imposed temporary controls
on compensation and arbitration awards, while others changed arbitration
criteria to emphasize ability to pay (Swimmer 2001). Unfortunately, many
earlier studies studying public-sector contract and bargaining outcomes have
relied on data collected prior to the start of this era of structural change.
Consequently, it is not clear whether the findings from these earlier studies
still hold in the new environment of structural change and hard bargaining.
This suggests that it is important to have estimates that reflect the changing
environment in the public sector and its effect on contract and bargaining
outcomes.
In this article, we study public-sector bargaining and contract outcomes in
Canada using data that cover the period between 1978 and 2008, which
include contracts and strikes from the 10 Canadian provinces as well as the
Federal jurisdiction. Our sample will thus overlap with earlier studies, but
also includes the more recent negotiations that reflect the current realities in
the public sector. Earlier papers have also emphasized the quality of the
Canadian data, as well as the similarities in the industrial relations system
between Canada and the USA (e.g., among others, Budd 1996; Currie and
McConnell 1991; Gunderson and Melino 1990). We focus on three outcome
measures: the probability of how the contract was settled (strike, legislated
settlement, mediation, arbitration and bargained), strike duration and wage
settlements. We use the term bargained to refer to settlements made without
third-party assistance.
While we consider three outcomes measures, we focus our attention on
wage settlements. Wage settlements are of particular interest in this era of
restraint since various governments implemented wage controls in the public
sector as one way to reduce their spending. Governments in many jurisdic-
tions used direct interventions (e.g., temporary policies to limit wage settle-
ments and arbitrated awards in the early 1990s, as well as legislating wage
settlements and other contract terms instead of bargaining) in the bargaining
process to control the growth of wages in the public sector. In addition, many
jurisdictions also strengthened the ability to pay criterion used by arbitrators
to attempt to limit the size of wage awards in the public sector. We will
explore the effects of these changes on wage settlements in the public sector.
Earlier research using Canadian data has found that compulsory arbitration
is associated with an increase in wage settlements relative to other legal
structures, and that the ability to pay criterion is not the principal driver of
arbitrated settlements (Currie and McConnell 1991). One important policy
implication of this earlier literature is that strengthening the ability to pay
criteria of arbitrators could reduce the arbitration wage premium relative to
other legal structures. Our estimates will show whether these conclusions and
policy implications still hold in this new era of public-sector bargaining.
The next section provides some background information on collective
bargaining legislation and a conceptual framework. Section 3 presents our
© 2014 John Wiley & Sons Ltd/London School of Economics.
Collective Bargaining in the Canadian Public Sector 193
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