Workplace Wire

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“Right to Work” legislation, Canada, and Job Growth


You may have heard about so-called “right to work” legislation.   I certainly have.  Everywhere I go I am hearing about the encroachment of “right to work” legislation and how this monster is creeping north, soon to cross into Canada.

So, what exactly is “right to work” legislation and what is happening south of the border?

While “right to work” legislation comes in various forms, the common element among such legislation is a prohibition of union security agreements or agreements between labour unions and employers that force employees to join unions or to pay union dues either before or after hiring.

At present, 24 US states have adopted some form of “right to work” legislation. While such legislation has traditionally been almost exclusively found among southern and western US states, more recently such laws have been adopted by northern states bordering Canada. The most recent state to adopt “right to work” legislation is Michigan, a state which is highly economically integrated with Ontario, particularly in the automobile manufacturing industry.

Many workers’ organizations in Canada are concerned that the adoption of “right to work” laws would undermine the integrity of existing unions and prevent any future expansion of collective bargaining. A further concern is that Ontario and other Canadian jurisdictions will find it more difficult to compete with those jurisdictions with “right to work” laws. Michigan’s adoption of “right to work” laws has accordingly made many individuals in Ontario’s auto sector nervous.

How big is Ontario’s Auto Industry?

Ontario currently produces 2.1 million vehicles per year. It is also the only jurisdiction in the world to produce vehicles for five of the world’s top automakers including Chrysler, Ford, General Motors, Honda, and Toyota. Ontario is also home to over 300 auto parts manufacturers which service and support auto manufacturing in the province. General Motors, Chrysler, and Ford are all unionized work places. While Toyota and Honda workplaces are not currently unionized, the Canadian Auto Workers continue to attempt to gain certification.

What does “right to work” legislation mean for Canadian employers?

The growth in the number of US jurisdictions implementing “right to work” legislation almost certainly means that there will be increasing pressure for jurisdictions in Canada to follow suit. Should this occur, this could represent one of the most significant challenges to unions in Canada in decades.

While many argue that “right to work” legislation could improve Canada’s competitiveness, particularly in manufacturing, it is not clear that this will be the result. Specifically, studies appear to support the notion that attracting investment in manufacturing appears to depend on a wide range of factors far beyond legislative frameworks governing unionization. This includes the availability of skilled workers, proximity to market, infrastructure, corporate tax rates, as well as currency valuations. In fact, reviews of “right to work” states appear inconclusive in terms of whether such laws promote job growth. Specifically, while some “right to work” states have seen job growth in manufacturing, others, such as Oklahoma, have lost significant manufacturing jobs in recent years.

Accordingly, while “right to work” legislation headlines tell a simple story, the reality of such legislation and its impact on Canadian employers and job growth is much more nuanced indeed.

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