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UCP platform will drive down wages

NOTE: On April 5, 2019, after this blog was originally published, the United Conservative Party amended its platform, including changes to overtime. The revised platform indicates that the UCP would: “Reverse the change in 2018 that eliminated the option for workers and employers to develop straight time banked hours arrangements (this has no impact on overtime pay).” (p.21). Essentially, the UCP is now proposing that banked OT could be taken as straight time off, instead of at 1.5 times (as is the case now). In this way, the revised UCP proposal reduces the time workers could take off by one-third. Under the amended policy overtime that is paid out instead of taken in lieu would still be paid out at 1.5.

The United Conservative Party (UCP) election platform contains several planks affecting employment law, labour law, and training. These changes are framed as “bring balance back to Alberta’s labour laws, restore workplace democracy, and incentivize the creation of youth employment” (p. 21). The overall effect of the UCP platform is, however, to directly or indirectly reduce workers’ wages in order to benefit employers.

Employment law

The UCP platform promises a number of changes to Alberta’s employment laws. Employment laws are the primary source of workplace rights for the 75% of Albertans who are not covered by a collective agreement.

The most significant change is related to over-time (OT) pay. At present, workers who are required to work more than 8 hours in a day or 44 hours in a week must receive 1.5 times their normal pay for this OT work. Over-time pay is designed to dis-incentivize employers from requiring long working hours (which create a fatigue hazard) and, instead, hire more workers.

The current OT rules allow employers and workers to enter into agreements where OT is “banked”. In practice, employers can impose such “agreements” at their discretion by denying workers OT if they don’t agree to the employer’s terms. Banked OT can then be taken as paid time off or as pay calculated at 1.5 times workers’ normal rate of pay. Employers can deny employees time off in lieu of pay, thus forcing workers to take a pay out.

The UCP indicates it will allow employers to pay out banked over-time hours at “straight” time, instead of at the OT rate. This will allow employers to evade OT premiums by denying worker requests to use banked OT. Instead, employers will be able to simply
pay out the OT as straight time. The result will be a significant cost savings for employers, and a significant pay reduction for workers.

For example, a minimum-wage worker (earning $15 per hour) being asked to work five 12-hour shifts, would have gross monthly earnings of $4200 under the current OT rules. Under the UCP proposal, an employer could impose an OT agreement and reduce the worker’s gross earnings to $3600 per month. This nets the employer a $600 savings per worker per month. Consequently, the UCP proposal will encourage employers to work existing workers harder, rather than hiring additional staff.

The UCP has also promised to reduce the earnings of workers who are under the age of 18 to $13/hour (from $15/hour). This plank is intended to incentivize employers to hire young workers. There is no compelling evidence that such a policy would result in
employers creating additional jobs for young teens. It may, however, incentivize employers to hire young teens in lieu of older workers (who comprise the vast majority of minimum wage earners in Alberta).

Implementing a lower youth wage benefits employers. For example, assuming a 40-hour work week, an employer who replaces an older worker with someone under 18, will save $320 per worker per month. The UCP also promises to discuss reducing the minimum wage of workers who serve alcohol. This suggests a return to the two-tier minimum-wage for alcohol servers that existed under past Conservative governments.

Finally, the UCP has also promised to replace Alberta’s present laws about farmworker rights. As previously reported, this proposal will deny 70% of paid farmworkers basic employment rights as well as reducing worker access to injury compensation.

Labour law

At present, Alberta workers are free to decide whether or not they wish to join a union, free from employer interference. If a union has the support of 65% or more of workers, they can apply for immediate certification (this is called card-check certification). If the union has the support of at least 40% but less than 65% of workers, then the Labour Board holds a vote and the majority decides whether or not to unionize. If the employer interferes in the workers’ decision, the Labour Board can automatically certify the union.

The UCP platform promises to eliminate card-check certification and make every union certification application subject to a vote. The delay inherent in mandatory votes gives employers the opportunity to pressure workers into rejecting unionization, and employer intimidation of workers during union drives is commonplace. One Canadian study found that 80% of employers oppose certification drives, 60% do so overtly, and 20% take action that is illegal (e.g., threatening or dismissing workers). Not surprisingly, card-check certification provisions dramatically increase the success rate of union drives.

The UCP platform frames eliminating card-check certifications as “restor[ing] workplace democracy” (p. 21). This attempt to equate certification votes with the electoral process ignores the fact that, when we cast a vote in a federal or provincial election, the government doesn’t spend the campaign period threatening to fire us if we vote for a different party.

Such claims also ignore that elections and union drives are fundamentally different. Government policies profoundly affect every aspect of our lives and can’t be avoided (unless we abandon our country and citizenship). By contrast, the selection of a bargaining agent affects only certain aspects of our employment and the effects (typically higher wages and greater job security) can be avoided by changing jobs.

The UCP platform is silent on two other important changes to Alberta’s labour laws implemented by the Notley government: remedial certification when employers interfere in union drives, and first-contract arbitration when employers stall collective bargaining to try and break new unions.

The UCP platform also promises to continue to require public-sector unions to provide essential services during a work stoppage in order to protect the health, safety or life of others or public order. In many cases, this entails forcing a significant portion of a union’s membership to continue to work. The UCP proposes, however, allowing public-sector employers to hire replacement workers to cover the jobs of those workers that are able to strike. This promise would fundamentally undermine public-sector union’s power to make contractual gains. Unions will probably respond to such a change by resorting to illegal strikes.

Overall, these platform planks appear designed to reduce workers’ ability to join a union and limit the strike power of public-sector unions. These planks benefit both employers (who typically seek to avoid unions) and a UCP government (which would likely be keen to drive down public-sector wages).

Labour-market training

The UCP platform contends there is a need for more apprenticeship training due to retirements among skilled workers. Alberta’s occupational demand and supply model (forecasting to 2025) does not support this assertion. Instead, it predicts a surplus of
workers in most skilled trades.

Increasing the number of qualified workers will, however, further loosen the labour market, likely driving down wages. While he was the federal Minister of Immigration, Kenney used fears of labour shortages to flood Alberta with temporary foreign workers.

This, in turn, meant employers did not have to increase wages or improve working conditions in order to attract workers.

The UCP proposes to “solve” this imaginary skill shortage by expanding trades training opportunities, including for high-school students. This promise ignores that:

  1. high-school students in Alberta’s current Registered Apprenticeship Program face high levels of injury and low levels of retention, and
  2. there is high attrition among apprentices, in part because only 1 in 5 employers that use skilled trades people offer apprenticeship opportunities.

Overall, the UCP’s platform attempts to solve a non-problem by increasing training capacity. This approach has been demonstrably ineffective for decades because it ignores the barrier posed by employers’ unwillingness to provide apprentices workplace experience. If successful, the main beneficiary of the UCP’s training planks will be employers, who will be able to pit surplus workers against one another and drive down wages.

Conclusion

The UCP’s claim that it will “bring balance back to Alberta’s labour laws, restore workplace democracy, and incentivize the creation of youth employment” (p. 21) is false. Instead, the UCP’s platform will increase employer profitability by lowering wages.

Specifically, the UCP’s platform will:

  • directly reduce the wages of young workers and workers who are required to work over time,
  • increase employer interference in workers’ decisions about unionization in order to reduce unionization rates and thereby, indirectly, drive down wages, and
  • flood the labour market with skilled workers (in response to an imaginary skill shortage) and thereby, indirectly, drive down wages.
Bob Barnetson

Dr. Bob Barnetson is a professor of labour relations at Athabasca University. His research focuses on the political economy of workplace injury, farm workers, and child labour in Alberta. He’s the author of The Political Economy of Workplace Injury in Canada (Athabasca University Press, 2010), co-editor of Farm Workers in Western Canada: Injustices and Activism (University of Alberta Press, 2016) and co-author of Health and Safety in Canadian Workplaces (Athabasca University Press, 2016).

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