The Federal Government, Canada Post and Final Arbitration

Did the Canadian Federal Government steal from the U.S. Government’s playbook to resolve the Canada Post labour dispute?

A further look demonstrates final arbitration was wholly adopted by the Canadian Government from the United States in resolving the labour dispute between Canada Post and its CUPW represented employees when it passed legislation on June 26, 2011 entitled: Restoring Mail Delivery for Canadians Act.

The U.S. Government since 2003 has been trying to enact final arbitration legislation but has not succeeded. But it did happen in Canada, which historically is a more socialist country, and takes a more restrained approach in labour relations. This was a substantial shift from traditional Canadian Government intervention.

Here is a brief history of this development in the United States.

The 2003 presidential commission on the USPS promoted an amendment to the legislation on the United States Postal System by which final arbitration would be standard procedure. They found arbitrators tended to side with employees too often in arbitration rulings. Therefore the solution would be to force arbitrators to consider the financial condition of the USPS in its collective bargaining decisions.(1)

This recommendation by the presidential commission was never enacted.

In 2009, a similar bill was introduced by Senate Committee on Homeland Security and Governmental Affairs. It was multifaceted and included, “to require arbitrators in rendering collective bargaining decisions to “consider the financial condition of the Postal Service.””(2)

More recently the U.S. Government Accountability Office also echoed the same clause should be added in any revision:

“facilitating USPS cost reduction, such as by modernizing and optimizing postal networks and its workforce; modifying its retiree health benefit cost structure in a fiscally responsible manner; and requiring any binding arbitration in the negotiation process for USPS labor contracts to take USPS’s financial condition into account.”(3)

In that same year, Republican Senators Tom Coburn, and Susan Collins tried to amend with their own Senate Bills that had the same wording.(4)

More recently Sen. Tom Capers (D-Del.) introduced an omnibus bill in May, 2011 in the United States. His press release outlined many goals outside of this writing, but in reference to wages and final arbitration, it stated:

“At times, arbitrators have awarded postal employees what they believe are comparable pay and benefits without taking the Postal Service’s financial condition into account. Recognizing that this situation cannot continue in a world where the Postal Service operates under a rate cap and faces stiffer competition from electronic communication, the bill requires arbitrators to take the Postal Service’s financial condition into account along with other factors such as the comparability requirement and the details of the rate system.”(5)

None of these amendments have passed so far.

In June, 2011, labour relations between Canada Post and its main union came to an impasse. In order to resolve the stalement and get the mail running again, the Conservative Government decided to pass legislation that forced final arbitration and a fixed wage schedule. The final arbitration has never been used in Canadian back-to-work legislation before.

It reads very similar to the U.S. motions tabled over the years. In reference to final offer arbitration it reads:

“(2) In making the selection of a final offer, the arbitrator is to be guided by the need for terms and conditions of employment that are consistent with those in comparable postal industries and that will provide the necessary degree of flexibility to ensure the short- and long-term economic viability and competitiveness of the Canada Post Corporation, maintain the health and safety of its workers and ensure the sustainability of its pension plan…”(6)

This final arbitration process enacted by the Canadian Government was a well-researched one that took considerable time to develop. It definitely was not a knee-jerk reaction or quickly put together. It was planned months ahead for the inevitable negotiations to break down and be implemented. It always appeared to be a made-in-Canada solution, but it is of foreign origin.

The U.S. Postal Service’s Financial Condition: Overview and Issues for Congress. Kevin R. Kosar. Analyst in American National Government. March 17, 2010. Pg. 12
(2) The U.S. Postal Service’s Finances and Financial Condition. Kevin R. Kosar. Analyst in American National Government. September 17, 2009. Pg. 8

Article updated 11/03/2012

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