Wal-Mart wins big union battle

Let's see how this news plays out: Union takes on Wal-Mart under most favourable union laws in North America, and Wal-Mart wins hands down. The union, the United Food and Commercial Workers Union (UFCW), had forced its way, via Quebec's union-friendly card-check organizing laws, into representing workers at a lone Wal-Mart store back in 2005. Yesterday, the union emerged with the first-ever North American Wal-Mart union arbitrated contract, with nothing to show for it in terms of worker benefits.

After three years of negotiation and arbitration, the UFCW received the bad news yesterday from arbitrator Alain Corriveau. Union calls for wage and benefit increases were rejected, which means that all the union's big promises -- of bonuses and 5% annual wage gains worth up to $1.3-million a year --have turned to dust. In fact, new workers at the store, in the small community of Saint-Hyacinthe, south east of Montreal, will now find themselves paying union dues to a union that didn't get them anything.

In a bizarre twist, the arbitrator did award existing workers a small wage gain of 30¢ an hour in each of the next two years. The reason: To prevent them from being "impoverished" by dues paid to a union that failed to justify wages increases to the arbitrator. As a result, new workers hired by Wal-Mart will not receive that extra 30¢.

The arbitration ruling, however, is a major vindication of Wal-Mart. In unmistakable language, the arbitrator portrayed Wal-Mart as at least as good an employer --even a superior employer -- compared with other retailers. More importantly for the company, the arbitrator refused to disturb Wal-Mart's famous "business model."

The union wanted to bring in standard automatic-progression annual wage scales. You come to work, you get paid. The company wanted to maintain its system of paying on the basis of "performance at work evaluated each year."

Wal-Mart's compensation system, said the arbitrator, "must be retained," and "falls within the culture of the company which encourages and privileges performance at work." He added: "Putting into place ... a wage scale as proposed by the union would also drastically change an important piece of [Wal-Mart's] business model." It would force the company to exclude the 180 Saint-Hyacinthe employees from the company-wide annual performance evaluation. "I do not think that this is desirable, particularly within the scope of a first collective agreement, especially since this would be a major change and, in that sense, it is better left to the parties to re-discuss the issue during a next negotiation."

Among other findings, the arbitrator said that 80% of Wal-Mart employees are hired at rates above the minimum wage. The current wage scale runs from $9.21 an hour at the lowest level to $12.00 at higher levels and top rates of $16.20. The average wage at the store is around $11-an-hour. "The wages offered by Wal-Mart to its employees," said Mr. Courriveau, "are comparable to, sometimes even more advantageous, than those paid by Zellers to its regular full-time employees."

So Wal-Mart is a winner here, which draws even more attention to the warped process by which the union ended up where it is now. No secret-ballot vote was ever held among the 180 Saint-Hyacinthe Wal-Mart employees. Instead, the union deployed the infamous card-check method, which is the law in Quebec, the only Canadian province to still deny workers the right to a secret ballot.

The arbitration is also an imposed legal requirement. The UFCW officially won the Saint-Hyacinthe card-check vote in 2005. Under Quebec law, after it failed to negotiate a deal with Wal-Mart, a contract is imposed by arbitration.

If the UFCW can't get a favourable deal out of North America's most union-friendly jurisdiction, what hope is there elsewhere? The union has encountered failure wherever it has gone across Canada in search of a first kill. This should put a final end to the great Canadian union war on Wal-Mart. Wayne Hanley, head of the UFCW, didn't return my phone call yesterday.

In the United States, the union-friendly Obama administration is trying to push through card-check as a replacement for a secret ballot during union organizing drives. Under card-check, union organizers hold powerful upper hands. They go out to individual workers at their homes and other non-workplace locations, urging workers to sign cards that are tantamount to votes for certification. The process can be intimidating and pressure-filed.

Not surprisingly, Wal-Mart is a major lobbyist against the Ombama-led card-check move in the United States. What the Saint-Hyacinthe example may show is that even when the laws are stacked in their favour, unions have a tough time winning over workers and arbitrators.