CN union talks strike in battle over ‘action fund’
Proposed social-action charity likely to become ‘political,’ railway charges
Only two days after the strike at Canadian Pacific Railway Ltd. ended, shippers may need to begin preparing for another countrywide rail strike, this time at Canadian National Railway Co.
The dispute centres on CN’s refusal to contribute to a union “action fund.” It may sound like a minor disagreement, but it could prove to be a deal-breaker.
“I believe, in my heart of hearts, that we’re going to have a strike at CN,” Jerry Dias, president of the Unifor union, said in an interview Wednesday.
According to CN, Unifor rejected a settlement offer made Sunday that calls for a three-year agreement with three-per-cent wage increases in each year and benefit improvements that are in line with recent contracts negotiated by the United Steelworkers and Teamsters Canada unions.
The key stumbling block is Unifor’s demand that the company contribute five cents per employee per compensated hour to its new Canadian Community Fund — a fund CN insists will be used for “political and community action.”
The fund was established in a tentative agreement that competitor CP reached with Unifor workers over the weekend, but CN says it won’t follow suit.
“This is an issue of principle for us,” Claude Mongeau, chief executive of CN, said in a statement. “CN is prepared to co-invest in charitable causes, but we are not prepared to support such a union agenda.”
Canadian law allows unions to direct members’ dues to political causes, many of which have been used to create third-party political groups that aggressively campaign against conservative parties at the provincial level, in favour of more labour-friendly parties.
But Dias contends the fund contributes to organizations such as women’s shelters and food banks and is in no way political.
“I’m absolutely flabbergasted that somehow they would say that the fund is political,” he said. “It’s utterly stupid.”
A copy of the tentative agreement between CP and Unifor, obtained by the Financial Post, provides only partial detail about the fund — saying it supports “philanthropic efforts in Canada and internationally, including efforts such as flood relief, disease control and earthquake relief.”
However, these funds rarely if ever issue audited financial reports to show how contributions are being spent, said John Mortimer, president of the Canadian LabourWatch Association, an organizedlabour watchdog group. Corporate contributions to such union funds can actually run contrary to employees’ interests, he added.
“My experience has been that sometimes employers give money to one of these funds in lieu of what employees would get in terms of wages, benefits and other terms and conditions of employment,” Mortimer said in an interview.
“The employees get less because the union gets money for its pet cause and it’s a way of getting union leadership to pressure a group of employees into ratifying a proposed agreement.”
Dias said he doesn’t think the fund is the real issue anyway; rather, he believes CN is using it as a “diversion” because it doesn’t want to give its employees the larger wage increases agreed to by CP. (According to Dias, CP employees will get annual increases of three per cent, three per cent, 3.5 per cent and four per cent, respectively, if the agreement is ratified.)
“CN carved an inferior deal with the other unions, with the Steelworkers and with the Teamsters,” Dias said. “They’re saying we have to eat the pattern that was established by the other unions and we’re not going to do that.”
CN spokesman Mark Hallman said the claim is “wholly without merit,” adding the offer would ensure its Unifor employees remain the best paid in the industry.
“The dispute is not about charity; it’s about cash contributions to a new union fund and other union financial matters taking precedence over the interest of CN’s employees,” he said.
Until a deal is reached, CN said it will modify some terms of its employees’ collective agreements. For example, the probationary period for intermodal employees will be increased to 120 days from 60 days. The railway will also give its Unifor employees a two-per-cent raise.
Unifor represents about 4,800 mechanical, intermodal and clerical workers at CN.