Question

Labor Relations- Chapter- Employers: Objectives, Processes and Strategy

Case Incident- Walmart and the UFCW

In November 2003 Walmart opened a new store in Weyburn, Saskatchewan. Soon afterwards, employees contacted the United Food and Commercial Workers Union (UFCW) seeking representation. In April 2004, the union filed an application with the Saskatchewan Labour Relations Board to represent these employees. The application to represent is an application for certification, the details of which are referred to in Chapter 6. This filing was the start of a legal battle that lasted until 2013.

The union sought an order from the Board to require Walmart to produce documents. It was alleged that Walmart had provided managers with materials that showed Walmart was guilty of illegal practices, including a document titled “A Manager’s Toolbox to Remain Union Free.” The Board ordered Walmart to produce records and Walmart appealed this decision. On the appeal, a lower court judge quashed the subpoena and in the decision appeared to suggest that the Board was biased in favour of unions.

Subsequently there were numerous comments on the situation in the media, some of which were critical of the Labour Relations Board and the provisions of the Trade Union Act that allowed a union to be certified without an employee vote. There were calls for amendments to the legislation and changes at the Board. Some critics alleged that union contributions to the NDP party, which was in power at the time, made change unlikely.

The Court of Appeal overturned the lower court decision and ordered Walmart to produce the documentation. The Court of Appeal also indicated that the lower court’s concerns regarding a possible bias in favour of unions by the Labour Relations Board were unfounded. Walmart attempted to appeal this decision to the Supreme Court of Canada, and this further delayed the certification application.

While the Weyburn battle raged, there was a related development in Quebec. In February 2005, Walmart announced that it would close a store in Jonquière, Quebec, which had been unionized for four months. Labour activists claimed that this closing was intended to send a message to employees in Weyburn and elsewhere in North America about the negative consequences of seeking unionization. The president of the Saskatchewan Federation of Labour referred to “economic terrorism” against Canadian workers.

In April 2005, one full year after the original application for certification, the Supreme Court of Canada refused to grant Walmart leave to appeal, and the certification process continued. Walmart filed an application to block the Labour Relations Board from hearing the application, alleging the Board was biased; however, a court decision rejected that application.

Through this process, Walmart stated that it respected “the individual rights of our associates and encourage them to express their ideas, comments and concerns. Because we believe in maintaining an open environment of open communications, we do not believe there is a need for third-party representation.” Walmart had some supporters in the ongoing battle. One newspaper commentary provided as follows: “This province’s unions are aggressive by nature, helped along by labour laws that favour unions far more than business, something that has been used by businesses as a clear illustration as to why companies avoid coming to Saskatchewan. . . . Presumably the union has jobs for the approximately 3,500 to 4,000 employees who would be put out of work if Wal-Mart . . . walked. Wal-Mart is a huge player in Saskatchewan. It provides hundreds of employees with jobs. It pays taxes. It is possibly the most popular retail outfit in the province. To lose something like that would be a major blow to the province’s economy and employment levels not to mention the government’s open for business slogan it shops around the country.”

In a 2007 provincial election, the NDP government was defeated by the Saskatchewan Party. In March 2008, the new government ended the term of the chair of the Saskatchewan Labour Relations Board, who had been dealing with the UFCW certification application, and in May 2008 amendments to the Trade Union Act that required a vote on certification applications came into effect. The chair of the Board continued to deal with the Weyburn application, asserting he had the authority to finish applications started before his term was ended, on the basis of the law as it was at the time. In December 2008, a certification order was granted. In 2009, Walmart challenged the certification in court on the basis that the chair did not have jurisdiction and that the amendments to the Trade Union Act required a vote. In June 2009, a lower court overturned the certification. Subsequently, the union indicated that it would be appealing the decision.

In July 2009, Walmart filed an application for a court injunction to restrict the activity of a union website critical of the company. UFCW Canada National President Wayne Hanley responded, “This injunction request is an over the top assault on effective freedom of speech. . . . It’s a kneejerk response by Walmart to the idea of its employees trying to understand their options as workers are trying to share experiences with other ‘associates’. Walmart’s response to the success of www.walmartworkerscanada.ca is just another outrageous example of how the largest retailer in the history of the world will use its bottomless legal budget to manipulate the collective bargaining process and do just about anything to discourage its ‘associates’ from joining the union.”39

In August 2013, the Saskatchewan Labour Relations Board made the decision to decertify the United Food and Commercial Workers union, which had been unsuccessful in its attempts to negotiate a collective agreement with the retail giant. Employees at the Weyburn store had voted to remove the union by a margin of 51–5.

Questions

1. Identify the employer’s labour relations strategy and explain possible reasons for this approach.

2. Outline the environmental factors, referred to in Chapter 2, affecting this situation.

3. In the light of the Supreme Court of Canada decision (June 2014) involving Walmart and a Quebec store closure in 2005, how might the company’s labour relations strategies be modified?

Answer 1

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Identify the employer’s labour relations strategy, and explain possible reasons for this strategy.

In our analysis of the employers' labor relations policy, we concluded that their business approach is influenced by a heavy market rivalry as they are a major employer in Weyburn. In the case study, they claimed that the unions in the province are militant and labor laws are far more favorable to unions than businesses.It is a major barrier to the establishment of shops in Saskatchewan for other businesses. It employs hundreds of people who live in Weyburn and is a corporation that pays taxes and is one of the biggest dealers in the city. If Wal-Mart shuts its doors, the economy will decline dramatically.

Union or non union status of competitors, No other organisations are so big within Weyburn and can hire so many men. Consequently, the rivalry between union and non-union is minimal. Furthermore, other Wal-Mart stores are unionized aside from the one in Quebec.

Experience with unionization,The only unionized Wal-Mart shop in Quebec closed 4 months after approval, which proved that unionisation did not succeed for the store.

Management Values or ideolog,The Managers of Wal-Mart circulated a book on how to stay union free. Quoted on Wal-Marts website was that freedom of speech was supported by this retailer and stated that the company respects the individual rights of their associates and encourages them to express their ideas, comments and concerns. Wal-Mart indicated that they believe in maintaining an environment of open communications therefore did not agree there was a need for third-party representation.

Union philosophy or policy, The Union is entitled to question its claims and criticize the employer. In order to strengthen working conditions, policies and job standards, Unions say they should serve employers and organizations.

Types of employees, Compared to the types of workers who worked with Wal-Mart, the employer's partnership approach was affected minimally, aside from being one of the biggest employers in Weyburn, Saskatchewan.

Legal environment, There were several legal repercussions in this conflict as it went through lower courts and the Supreme court of Canada and Wal-Mart was also attempting in the end to block the Labor Relations Board's decision, on the basis that the Board was unified, but the courts dismissed it. In exchange Wal-Mart declined, at the request of the Supreme Court of Canada, to send the documents.

Outline the environmental factors referred to in Chapter 2 affecting this situation.

Many environmental factors affected this dispute:

Economy, Wal-Mart in Weyburn was the largest retailer and a business that paid taxes to the government. They employ a large quantity of Weyburn residents and help bring market and financial return to the small community. Using the Quebec branch as a example of what Wal-Mart would look like in a unionized frame work simply reiterated that Wal-Mart should remain non-union because the Quebec union did not provide job security with continued employment.

Technology, In the media the conflict was brought about by the union and Wal-mart, which gave rise to a great deal of public attention and debate. That form of publicity may also have impacted clients, staff and shareholders, or limited the number of applicants for potential positions in Weyburn. Wal-Mart has also used their website to explain their ideals of freedom of speech, advancement of ideas, complaints, etc.

Social,In the eyes of the public, the position can be seen as negative or positive, impacting market sales and job standards. In line with what the social media and light Wal-Mart is looking at, several results will affect not only local and local consumers, but even retail outlets who want to go to Saskatchewan. In the beginning the employees approached the union for representation and wanted to be certified, however after the Quebec store closure, ithe employees realized that unions clearly were not be able to protect the quality or security of employment within the organization, thus in the end resulted in leading to an employee vote against unionization which ending in 51-5.

In this case politics played an enormous role. First of all, it was the NDP government; it was pro-Union and supported the labor council and the party. The Saskatchewan Party ultimately rejected NDP, which prompted the policy of the governments to change and agreed to end the terms of the President of the Saskatchewan Labours Relations Committee who had to deal with the application for certification. It also sparked another argument, as the Chairman of the Labor Relations Board assumed they were here to resolve what they had begun and sought to try to correct the conflict.

Political, It was more than once a 10-year struggle over this case at three levels: the lower court, the higher court and the Supreme Court. The Weyburn Wal-Mart in court and lawyer's fees should have been extremely deficitary.

In the light of the Supreme Court of Canada decision (June 2014) involving Walmart and a Quebec store closure in 2005, how might the company’s labour relations strategies be modified?

The Supreme Court eventually wavered on the first decision to pro-unionise Wal-Mart in Weyburn using the Quebec store as a unionized example. Earlier on in this situation, had Wal-Mart in Weyburn communicated with the employees about the reasons behind why they decided to approach the union to seek representation and had a discussion about the pros and cons of a union to non–union environment while using Quebec as an example of a union represented work place, they potentially could have avoided 10 years of court appearances, the cost associated with legal fees and hardship on their employees and consumers.

The social attacks on the company and the insecurity of the workers' future and job security would also have been reduced. You should have maintained your demands for freedom of speech and sharing of views on management and philosophies as stated on your web site. Wal-Mart should have been expected to provide the courts, and to the Supreme Court with his reasons why, instead of becoming a red neck fool, they did not want to get unionized at first sight.

By disobeying Wal-Mart, it created a ten-year lawsuit and demonstrates that it is not possible for Wal-Mart to be valid for its workers. By the end of the day, the Wal-Mart staff, the company and court cases had properly interacted with each other, this could have been handled much more effectively.