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The Progressive Economics Forum

Opting Out of Union Dues

Murray Mandryk’s excellent column today saves me the trouble of writing a lengthy blog post on the Saskatchewan government’s recent musings about labour legislation.

From an economic perspective, it’s worth noting that enabling unionized workers to opt out of paying union dues would create a classic free-rider problem. Indeed, Wikipedia’s article on this topic uses collective bargaining as an example:

In the context of labor unions, a free rider is an employee who pays no union dues or agency shop fees, but nonetheless receives the same benefits of union representation as dues-payers. Under U.S. law, unions owe a duty of fair representation to all workers that they represent, regardless of whether they pay dues. Free riding has been a point of legal and political contention for decades. In Canadian labour law, the Rand formula (also referred to as automatic check-off) is a workplace situation in which the payment of trade union dues is mandatory . . .

From a political perspective, it’s worth substantiating Mandryk’s observation that this week’s musings directly contradict what Premier Wall said just six months ago during the provincial election campaign. As this screenshot shows, Wall tweeted the following clarification: “no opting out of union dues.”

However, his government’s consultation paper now includes the following question: “Are there any instances where union dues should not be collected in a situation where the employee has opted out?” (page 23).

The paper also contemplates strengthening the duty of fair representation (pages 18-19). Taken together, these proposals would require unions to devote more resources (contributed by dues-paying members) to representing people who choose not to pay dues. The apparent goal is not to “modernize” labour legislation, but to undercut the viability of unions.

Enjoy and share:

Comments

Comment from Purple Library Guy
Time: May 4, 2012, 9:53 am

Isn’t that the idea? Wall wants to destroy unions; that seems to have been clear for a while. Creating a free-rider problem would seem to be just one of the methods he’d like to adopt if he can get away with it.

It’s funny . . . right wingers seem to have a strong grasp of the danger of free-rider problems when they’re creating them to weaken enemies. But they seem oblivious when they’re creating them to benefit friends at the expense of the broader economy.

Comment from Paul Tulloch
Time: May 4, 2012, 10:56 am

Its called union busting and that is what you should be responding in the media. They can couch in it touchy feely discourse, but the response, as always, is open shop rules = union busting

Comment from Travis Fast
Time: May 4, 2012, 1:45 pm

Guess labour will have to show them why the Rand formula was adopted. Wall is betting labour does not have it in them.

Comment from Rob Logue
Time: May 5, 2012, 8:48 pm

“It may be argued that it is unjust to compel non-members of a union to contribute to funds over the expenditure of which they have no direct voice; and even that it is dangerous to place such money power in the control of an unregistered union. But the dues are only those which members are satisfied to pay for substantially the same benefits, and as any employee can join the union and still retain his independence in employment, I see no serious objection in this circumstance. The argument is really one for a weak union.” – Justice Ivan Rand, in Ford Motor Co. of Canada v. UAW-CIO (1946)

“To constitute substantial interference with freedom of association, the intent or effect must seriously undercut or undermine the activity of workers joining together to pursue the common goals of negotiating workplace conditions and terms of employment with their employer that we call collective bargaining. Laws or actions that can be characterized as “union breaking” clearly meet this requirement.” – Chief Justice of the Supreme Court of Canada, Beverly Mclachlin, in BC Health Services (2007), para. 92

Though the meaning of freedom of association is currently a hot topic of debate at the highest court, I would suggest Mr. Wall pause and ask himself whether he really wants to pass another piece of unconstitutional labour law?

Comment from Greg Goremykin
Time: May 12, 2012, 2:17 am

They know it is unconstitutional, civil servants are making them quite aware of that. They knew the essential services legislation was unconstitutional. But they are content to pass these laws anyways knowing full well that they’ll be struck down, because they can still get their licks in at labour in the meantime until they appeal it right to the Supreme Court.

One of the most unfortunate things is the damages that the government will eventually have to pay out for their legislative malfeasance with the people of Saskatchewan’s money could run into the tens (or hundreds) of millions of dollars, just look at BC and Campbell’s legacy of passing anti-labour legislation that was in clear violation of the Charter.

Maybe they don’t care about being on the hook for damages though because they know by that time they’ll have messed us up financial so badly with their string of bad-math budgets and ballooning Crown debt that they will be out of office.

Comment from Marcus
Time: May 31, 2012, 11:01 pm

Randy Hillier just wrote a tea-party worthy a op-ed in the post about introducing “right to work” legislation in ontario. Thin edge of the wedge…

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