Management Rights and the Crisis in Oshawa, Ontario, Canada: Limitations of the Reformist Left, Part One

The Socialist Project Steering Committee wrote the following on its website (Taking on the GM Shutdown: Unifor, Oshawa and Community Control) :

General Motor’s plan to end production at its Oshawa plant at the end of 2019 is a callous, cynical act by the U.S.-based multinational auto giant that needs to be challenged. After accepting $13.7-billion bailout offered by the Canadian public to the big automakers back in 2008 to keep GM and Chrysler alive (one third of which will never be recovered), the company plans will leave 2500 workers at the plant out of work, with perhaps further spinoff losses of jobs and taxes. This is a brutal blow for the home of industrial unionism in Canada and one of the long-time centres of Canadian auto production.

This view implies that GM’s decision to close the plant is somehow unfair. Why else would such a decision be called callous and cynical?

Why is it unfair? There seem to be several reasons for providing such a judgement. Firstly, GM, like many other capitalist employers, were bailed out by the so-called Canadian public (actually, the Canadian government–hardly the same thing). Secondly, “one third” of the bailout “will never be recovered.” So, you lend someone a hand–and they not only fail to appreciate your aid but bite the hand that helps him. These are two the moral objections to the closing of the Oshawa plant provided by the Socialist Project Steering Committee.

The negative consequences of the closure seem to be a further objection, but that would only be so if there was an argument against closing plants by employers in general. If the Canadian government had not bailed out GM and no funds had been lost, then GM could legitimately “leave 2500 workers at the plant out of work, with perhaps further spinoff losses of jobs and taxes.” (Just as an aside–there is little doubt that there would be substantial spinoff losses of jobs and taxes. Why the Socialist Project Steering Committee decided to add the qualifier “perhaps” is a mystery. For one description of what happens, at an experiential level, to workers’ lives when coal mines and steel plants close down, see Simon J. Charlesworth, A Phenomenology of Working-class Experience).

The article, however, does not limit itself to only two reasons for considering the decision to be unfair:

From the point of view of the workers and communities surrounding Oshawa and, indeed, the needs and concerns of the working class across the country, there is no understanding why a place so productive can be shut down. Besides directly attacking the livelihoods and economic futures of workers, the shutdown would eliminate a key component of productive capacities in Canada.

Two further reasons are thus provided: the Oshawa plant is productive, and its closing would result in a reduction in the productive capacities in Canada.

Presumably what the Committee means by productive is in terms of material production. It may also mean value added as a whole. However, as the Committee undoubtedly understands, what is productive in those terms need not transfer to productivity for capital since the issue for capital is aggregate profit, and that usually in relation to total investment (rate of profit). What is productive materially and value added need not necessarily translate into higher profits and a higher rate of profit. For example, the same value added can be distributed differently between profits and wages. And the same level of profits, if related to different aggregate costs, will result in a different rate of profit.

It seems that the Committee is using a different definition of what constitute productivity from what GM considers productivity; why else would GM decide to close the Oshawa plant? It has decided, according to its own definition of productivity, what is productive–profitability and the rate of profit.

That the Committee and GM are using different definitions of productivity becomes clearer in what follows:

There is no reason to close down the facility in Oshawa which has consistently ranked as one of the top plants in the world (and similar doubts could be raised for the four U.S. plants also slated for closure). GM could easily retool these plants, and produce both new electric and hybrid vehicles, as well as the SUVs that are dominating current markets. These plants have rested on the community and labour resources of their communities; if GM doesn’t use this productive capacity, it should be seized as community property and put to other uses.

Brutal Corporate Strategy

From the point of view of GM, and the financial markets that back GM up, the closures are part of a brutal corporate strategy to: cut overall costs; to concentrate production in hot selling profit-making trucks and SUVs; and to finance later moves to offshore production of electric vehicles (quite possibly in China as the key growth market for e-vehicles).

In what way has Oshawa consistently “ranked as one of the top plants in the world?” Perhaps it has done so in terms of level of material productivity, value added, profitability and rate of profit–or perhaps it has not. Without a further explanation of what the standards are that are being used to make such a judgement, it is impossible to say what is being claimed here. However, in the above quotation, the Committee itself recognizes that its standards and those of GM are not the same. GM has decided to close certain plants “to cut overall costs.” If overall costs are cut, with profit remaining the same, then the rate of profit increases. “From the point of view of GM,” the productivity of capital will have increased. Furthermore, a shift from production in Oshawa and other plants to “hot-selling profit-making trucks and SUVs.” Not only did GM makes its decision based on the input sides (costs), but it also made its decision on the output side (level of demand). Furthermore, there is implied an already proven profit-making market, with relatively secure profits since demand is apparently quite high for output.
Is this not what capitalist employers do? How is GM any different from other employers in this regard?

The unfairness arises from an implied critique of capitalism as such as unfair without explicitly making it so; it is couched in terms of a bailout and non-recoverable funds. However, the article confuses the two issues and does not argue against GM as such as unfair.

If the only actions that are unfair is the bailout and nonrecoverable funds, then the solution would be to seize the Oshawa plant and have GM pay back the lost funds, after which GM would be free to close down the plant.

If, on the other hand, an economy dominated by a class of employers is unfair as such, then GM’s actions are unfair and seizing the plant without compensation would be only a prelude to seizing other plants since the ownership of such plants by employers would be illegitimate.

Since the Steering Committee fails to criticize explicitly the power of employers as a class to decide what to produce where and when it wants, its criticism of GM’s “brutal corporate strategy” rings hollow.

Why, for example, did it not criticize the following?:

MASTER AGREEMENT
BETWEEN
GENERAL MOTORS OF CANADA COMPANY
AND
UNIFOR
Local No. 199 St. Catharines Local No. 222 Oshawa Local No. 636 Woodstock
Dated
September 20, 2016
(Effective: September 26, 2016)
Page 5:
SECTION IV
MANAGEMENT
(4) The Union recognizes the right of the Company to hire, promote, transfer, demote and lay off employees and to suspend, discharge or otherwise discipline employees for just cause subject to the right of any employee to lodge a grievance in the manner and to the extent as herein provided.

The Union further recognizes the right of the Company to operate and manage its business in all respects, to maintain order and efficiency in its plants, and to determine the location of its plants, the products to be manufactured, the scheduling of its production and its methods, processes, and means of manufacturing. The
Union further acknowledges that the Company has the right to make and alter, from time to time, rules and regulations to be observed by employees, which rules and regulations shall not be inconsistent with the provisions of this Agreement.

(This blog has criticized management rights on principle on a number of occasions. See    (Management Rights, Part One: Private Sector Collective Agreement, British Columbia, Management Rights, Part Two: Public Sector Collective Agreement, Ontario,  Management (Employer) Rights, Part Three: Public Sector Collective Agreement, Manitoba,   Management Rights, Part Four: Private Sector Collective Agreement, Ontario).

The limitation of the social-reformist left are further exposed in the following:

Workers in Canada, the USA or Mexico for that matter, have no democratic control over what is being produced in our countries, or the fate of the productive facilities that produce them. Current governments of all stripes accept the free movement of capital and the domination of large investors in making key economic decisions. Trudeau, Ford and NDP governments are so committed to free trade and the wisdom of the private marketplace, that it is breathtaking to see how they fall over themselves to accept the right of GM to close down Oshawa, and limit themselves to providing Employment Insurance (EI), retraining and such.

This call for democratic control comes from out of the blue. Such a call is pure rhetoric and is not at all linked with the critique of concrete social structures that workers and community members experience on a daily basis. It is “breathtaking to see how they fall over themselves” in failing to criticize the various social structures that support the power of employers in general. Seizing the plant and managing it on democratic principles hardly need to coincide. Seizing the plant may be just an immediate reaction to the perceived threat to jobs–jobs that are hardly decent since they involve treating human beings as things (see The Money Circuit of Capital) but, nonetheless, are needed by workers if they are going to live in a society dominated by a class of employers.

A call for democratic control requires preparation. Why is there no definite critique of management rights? Why is there no definite critique of the right of employers to use workers as things legally? Why is there no definite critique of the economic dependence which characterizes so much of the lives of the working class? A critique of these structures is a necessary prelude to real democratic control by workers over the economic conditions of their own lives.

Actually, what they probably mean by “democratic control” is the regulations of employers and not the actual democratic control by workers over their own lives. Why else do they use the term “no democratic control.” They seem to object, not to the power of employers to dictate to workers in general, but to a particular form of that dictatorship–neoliberalism, where the welfare state is reduced in scope for the benefit of the class of employers.

The Committee then proceeds to criticize the weakness of Unifor’s response in the face of the announced closure of the Oshawa plant. The criticism is accurate as far as it goes, but the Committee does not bother to look at the weakness of the left and its role in feeding into that response. As already mentioned, the left does not generally criticize management rights as such. Quite to the contrary. It uses rhetoric and euphemisms, such as “decent work,” “fair wages,” (Tracy McMaster), “a fair contract” (Wayne Dealy). It fails to criticize the pairing of the Fight for $15 with the concept of “fairness,” implying that fairness can be achieved within the employer-employee relation. It fails to criticize the rhetoric of “Fair Labour Laws Save Lives.” It fails to criticize the rhetoric of “economic justice” (John Cartwright).

Were the jobs at the Oshawa plant before the announcement “decent jobs?” Was the collective agreement a “fair contract” and the wages a “fair wage?” But then magically, after the announcement, they are no longer “decent jobs?” There is no longer a “fair contract?” There is no longer a “fair wage?”

Were the labour laws fair before the announcement of the closure of the Oshawa plant fair? If so, how did they remain fair afterwards? Or did they magically become unfair?

So many questions, but the article by the Steering Committee fails to provide any answers.

A later post will look in more detail at the proposed solutions by the Steering Committee.

 

Comments from John Urkevich, AESES-UM Business Agent, to my Critique of the Grievance and Arbitration Procedure: Letter to the Editor, Inside The Association of Employees Supporting Educational Services (AESES), Vol. 17, No. 4, May 1994

As I wrote in my last post (Critique of the Grievance and Arbitration Procedure: Letter to the Editor, Inside The Association of Employees Supporting Educational Services (AESES), Vol. 17, No. 4, May 1994), I would provide the business agent’s reply to my letter to the editor in the same volume of the union newsletter. Here it is verbatim:

Mr. Harris’ comments are noteworthy in several respects albeit difficult to understand. I  believe that Mr. Harris is attempting to convey the message that a collective agreement only goes so far in reducing management’s unbridled right to manage its affairs and its working force and therefore a union, any union, is only as effective as the collective agreement it has to work with on behalf of its membership.

I would agree, as would most, that collective agreements only limit management’s right to manage and that which is not specifically abridged by a collective agreement remains within the employer’s purview. This right, however, is tempered by legislation which dictates that the exercising of management rights must be reasonable, fair, non-arbitrary, non-discriminatory and in good faith. Although arbitrators do not generally accept the argument that because there is a collective agreement, management is restricted to dealing only with those functions as specified in the agreement unless there is union agreement, neither do arbitrators accept the argument that management has an unfettered right to act completely as it wishes, in particular when it comes to severing or detrimentally affecting an employee benefit.

Mr. Harris reiterates the definition of a grievance which is found in our collective agreement but in so doing leaves the impression that such a definition is restrictive. I would suggest that this defines a grievance in its broadest sense.

Arbitration is the final step in the grievance procedure and therefore is part and parcel of the procedure and not an entity of its own. The arbitration of a grievance occurs only if the parties cannot come to a mutually acceptable resolution of the issue either during the process or before a grievance is ever filed. Many of the issue that arise during the life of a collective agreement are resolved without either the necessity of a grievance of arbitration. Depending on the state of the employer/employee relationship, common sense and fairness can prevail without a confrontation.

The reason that management does not file grievances is because the employer/employee relationship is such that the employer acts and the employee reacts. The union’s right to be proactive is curbed by the law which prohibits employees from withholding their services during the term of a collective agreement and specified that all agreements must contain a method of resolving disputes which arise during the term without a work stoppage (grievance procedure). Whenever management takes an action the employee must continue as normal whether or not the employer is correct (there are some exceptions). This is aptly coined as the “work now–grieve later” principle. If this were not the case then I suspect that management grievances would be a fact of life.

I do not agree, as Mr. Harris suggests, that because management’s right is merely restricted by a collective agreement that employees should not voice their concerns or their problems, unless it is certainty that a grievance is winnable. Union members should always check with their union representative any questionable act of management. After all the employer only has control over the how, what, and when, it does not have the right to treat employees in an unjust or undignified manner. Employees are not channel.

I have provided Mr. Urkevich’s response in full without my intervention so that the reader could see the whole response before I begin to analyze the response (an opportunity which I did not have since, as I said, I was no longer a member of the union).

….Mr. Harris is attempting to convey the message that a collective agreement only goes so far in reducing management’s unbridled right to manage its affairs and its working force and therefore a union, any union, is only as effective as the collective agreement it has to work with on behalf of its membership.

I fail to see how anyone could infer from what I wrote that that is the message that I wanted to convey. Unions need to teach their members the limitations of the legal rights of union members as contained in collective agreements–and those legal rights are very limited. That is what I wanted to convey.

Union representatives, in order to “sell” a contract, often exaggerate the fairness of a collective agreement and thereby do their members a disservice because they then teach them the opposite; they imply that, by being “fair,” collective agreements are not very limited instruments for protecting their collective interests. See, for example, reference to a “fair contract” by the Canadian Union of Public Employees (CUPE) Local 3902 of the University of Toronto (CUPE 3902, University of Toronto Education Workers).

I would agree, as would most, that collective agreements only limit management’s right to manage and that which is not specifically abridged by a collective agreement remains within the employer’s purview. This right, however, is tempered by legislation which dictates that the exercising of management rights must be reasonable, fair, non-arbitrary, non-discriminatory and in good faith.

Mr. Urkevich, like many union representatives, begs the question. Why does he assume what he needs to prove, namely, that the employer/employee relation can be “reasonable, fair?” In the money circuit of capital, for example, it has been shown that employees are mere means for the benefit of employers (see  The Money Circuit of Capital). Indeed, as I wrote in that section:

Immanuel Kant, a German philosopher, argued that, in order to act ethically, it is necessary to treat people never as means only but as ends in themselves: “For, all rational beings stand under the law that each of them is to treat himself and all others never merely as means but always at the same time as ends in themselves” (Groundwork of the Metaphysics of Morals. New York: Cambridge University Press, page 41). Human beings need to be treated as ends and not as means. To treat human beings as ends in themselves, it is necessary to have those who engage in realizing the ends also engaged in participating in the formulation of the ends.

If human beings, as employees, are treated as means to others’ ends, then how is such a situation “fair and reasonable”? For the employer, by definition, it is fair and reasonable. Is it for the workers though? Does not Mr. Urkevitch take the point of view of the employer as his standard? Should we? Why?

Is not Mr. Urkevich’s reference to “legistlation which dictates that the exercising of management rights must be reasonable, fair, non-arbitrary, non-discriminatory and in good faith” meant to justify Mr. Urkevitch’s own role as union business agent since, otherwise, Mr. Urkevich would be justifying unreasonable actions, unfair actions, and so forth.

Although arbitrators do not generally accept the argument that because there is a collective agreement, management is restricted to dealing only with those functions as specified in the agreement unless there is union agreement, neither do arbitrators accept the argument that management has an unfettered right to act completely as it wishes, in particular when it comes to severing or detrimentally affecting an employee benefit.

Of course arbitrators would not permit employers to let managers do what they will with employee benefits or, for that matter, employees in general. The treatment has to be consistent with the line of business. However, this leaves management with a very wide latitude of power to determine what can and cannot be done at work.

Whenever management takes an action the employee must continue as normal whether or not the employer is correct (there are some exceptions). This is aptly coined as the “work now–grieve later” principle. If this were not the case then I suspect that management grievances would be a fact of life.

Mr. Urkevitch, like many union representatives, assume without further ado that the employer/employee relation is inherently reasonable. I categorically deny that, and for reason already provided in reference to Kant and the money circuit of capital.

Management has a monopoly of decision-making power except as restricted by the collective agreement (and limited legislation); why employers have such a monopoly of decision-making power Mr. Urkevitch does not even question–undoubtedly like many other trade-union representatives and social-reformists.

Mr. Urkevitch merely repeats what needs to be explained: “Whenever management takes an actio the employee must continue as normal…” Why must the employee do so? Because of economic coercion, perhaps? (See “Capitalism needs economic coercion for its job market to function” (Ontario Coalition Against Poverty: OCAP)). It is the economic power of employers compared to employees that shapes legislation in favour of employers?

Mr. Urkevitch, undoubtedly like many union representatives, with a manipulative “if” (“If this were not the case”–but it is not the case–and that makes all the difference in the world for the daily lives of unionized workers–seeks to minimize the importance of the fact that it is mainly unions that file grievances and not management–because management has the power to make the major decisions that effect the lives of millions of workers.

I do not agree, as Mr. Harris suggests, that because management’s right is merely restricted by a collective agreement that employees should not voice their concerns or their problems, unless it is certainty that a grievance is winnable.

This reasoning is pure fantasy. Employees should voice their concern in various ways–even if the grievance is not winnable. Where did I imply that only if the grievance is winnable should workers voice their concern?

After all the employer only has control over the how, what, and when, it does not have the right to treat employees in an unjust or undignified manner. Employees are not channel.

This last sentence likely sums up the attitude of many union representatives. No, employees are not chattel, that is to say, they are not slaves, owned 24 hours a day. They are not required to work for a particular employer. No one forces them to work for a particular employer.

However, just as with the manipulative use of the word “if” above, Mr. Urkevitch uses the word “only” in order to minimize the importance of how much power management has over the lives of even unionized workers: “the employer only [my emphasis] has control over the how, what, and when….”

Mr. Urkevitch evidently does not think that “control over the how, what, and when” is “unjust or undignified.”

I do. (See above, referring to Kant and the money circuit of capital). Employers, by controlling “the how, what, and when”–control the lives of workers, which is undignified and unjust.

Union representatives, like Mr. Urkevitch, however, obviously believe that it is just. They believe in the justice of the collective agreement, where “the employer only has control over the how, what, and when.”

Union representatives imply, often enough, that there is somehow something fair about collective agreements. No one seems to challenge them to explain what they mean by fair collective agreements.

For instance, here is an example from a relatively recent union representative in Ontario:

Toronto (24 May 2018)…

Warren (Smokey) Thomas, President of the Ontario Public Service Employees Union (OPSEU/NUPGE) said he is hopeful the employer is ready to step up and do what is right for 20,000 of its workers who have suffered for decades under appalling working conditions.

“We’ve heard countless horror stories from our new members about poor pay and job security, no vacation time, they don’t even get sick days,” said Thomas.
“The fact our members overwhelmingly voted to join OPSEU/NUPGE in the largest organizing drive in Canadian history sends a strong message that times are changing. I hope this employer will work with us and make sure our members get a fair contract,” he said.

Of course, unions generally do improve wages and working conditions, but such improvements do not give them the right to declare that any collective agreement is somehow fair. They abuse their position by doing so, and by abusing their position, they open themselves up to legitimate criticism.

Unfortunately, few among the so-called left engage in such criticism. Rather, at best they follow along behind the unions, seeking “openings” here and there to open up discussion rather than openly criticizing all talk of fair contracts or collective agreements. They do a disservice to the regular worker but certainly aid both union representatives–and the class of employers.

One final point: although any particular employee is not obliged to work for any particular employer, what of the class of emloyees in relation to the class of employers? Can the class of employees simply not work for an employer, freely and realistically? If not, what does that make them?

So many questions, but so few answers–by union representatives and, undoubtedly, by many social reformists.

 

 

Critique of the Grievance and Arbitration Procedure: Letter to the Editor, Inside The Association of Employees Supporting Educational Services (AESES), Vol. 17, No. 4, May 1994

In a previous post, I provided the current management rights clause between AESES and the University of Manitoba  (Management (Employer) Rights, Part Three: Public Sector Collective Agreement, Manitoba). This is a continuation, of sorts.

The title indicates what the content of this post will be about.

In 1994, I worked on a project at Dafoe Library at the University of Manitoba (Canada) for a few months (one of the few positions I had because I was probably blacklisted because of my previous union and radical activity in my workplace in School District No. 57, Prince George, British Columbia). I sent in the following to the union newsletter. Unfortunately, I could not pursue any further the debate since the project had ended–and consequently my union membership.

The following is a verbatim letter to the editor of the AESES newsletter. The next post, probably next week, will be the business agent’s reply to my letter in the same newsletter.

Unions need to instruct members concerning the legal limits of the union’s capabilities, and members need to know what they can legally expect from the union. Unfortunately, from my own observations, many members do not know what the limits of union power are as it presently exists. They do not even have a clear grasp of the grievance and arbitration procedure. The following is thus meant both to inform members of the procedure and to generate some debate over the nature and function of unions.

A grievance is frequently defined as any difference arising from the interpretation, application, administration, or alleged violation of a collective agreement. If a grievance is not resolved in the grievance process, it may end in arbitration (a sort of court which determines whether the grievance is valid). The problem is that most arbitrators in Canada interpret the collective agreement as merely limiting management’s general right to manage work–including the lives of the workers–as it sees fit. With few exceptions, management retains its general right unless specifically restricted in the agreement.

Some union executives may disagree, claiming that the collective agreement expresses the joint and equal will of both parties (management and the union); the collective agreement is a contract like any contract and is binding on the parties. Such a view fails to account for the specific nature of the employment contract. The employment contract entails the control by management of employees’ activities. Indeed, arbitrators differentiate independent contractors from employees primarily (though not exclusively) on the basis of the level of control: an independent contractor is not under the control of an employer, but an employee is. In other words, an employee is a subordinate.

Moreover, if the employment contract were similar to other contracts, both parties would likely claim a breach of the agreement roughly the same number of times. However, the vast majority of grievances are initiated by unions. Why is that? The answer has already been formulated above: management need not initiate grievances because it has the general right to manage work.

However, many issues important to workers which emerge during the term of the collective agreement are not covered by the collective agreement. Given that arbitrators’ authority is restricted to the collective agreement, it is unlikely that workers will win grievances that end in arbitration if no provisions exist in the agreement which restrict management’s general rights To be sure, arbitrators have some leeway in applying arbitral jurisprudence, but they are ultimately restricted by the collective agreement which exists.