interview with David Rennie, postal worker.
Interview with a CUPW activist regarding Canada Post (possible) strike/lockout
Socialist Alternative (SA) interviews David Rennie (DR), a former executive member of the Hamilton CUPW local and delegate to the Hamilton and District Labour Council for almost 20 years. David is also active in various international solidarity campaigns and presently an executive member of the Hamilton Coalition to Stop the War.
SA – Can you describe the background to the threatened lockout? What are the union’s demands and what has been the response of management?
DR – The background to the potential lockout was set in the Harper government years and the appointment of the current chief executive officer Deepak Chopra, a former executive with Pitney Bowes. He was appointed after the former CEO Moya Greene resigned to take up the task of privatizing the postal service of the United Kingdom. Chopra, in keeping with the aims of neo-liberal policies promoted by the Harper government has attempted to transform the national postal service into 
a lean profit driven corporation at the expense of: public service, increasing costs to the public and on the backs of the employees.
All of this is a violation of the Canada Post mandate to function in the way a crown corporation should, i.e. service before profits. And it is a profitable crown corporation, despite the very expensive costs of the “postal transformation” and the erosion of letter-mail volume. The service has a lot of growing revenue from the explosion of parcel delivery and the on-line business. The potential is great with the expansion of other services such as postal banking which other postal services have been successfully implemented around the world. These are all bargaining issues for the union but management does not want to deal with these issues.
The union’s demands are to maintain quality employment opportunities and to prevent the roll backs that the generously compensated Chopra and the 22 Vice Presidents advocate. The union wants the corporation to consider the expansion of services to ensure employment opportunities, job security, and a viable postal service in the long term. Management’s response has been to scoff at union suggestions and to attempt to bully the union into accepting massive roll backs.
SA – I understand there is a pay equity issue. Can you explain?
DR – Pay equity is an issue also for the under compensated Rural and Suburban bargaining unit, composed largely of female labour.
SA – Doesn’t the management want to introduce a 2 tier pension scheme with new workers on worse conditions? I understand the union is resisting this as 2 tier contracts divide the workforce and why should some workers get poorer conditions for doing the same job?
DR -The pension is a big issue. Management wanted to cap the defined benefit plan completely for allthe members currently in the plan and completely eliminate it for the new hires who would receive only a defined contribution system (For a comparison of the differences between defined benefits pension plan and a defined contribution plan, this site offers a useful summary).
The union is fighting to keep if for all members of the union and argue that to terminate the defined benefits for the newly hired would not make the plan more solvent. There currently is a $1.2 billion surplus in the plan on a going concern basis. The plan administrators have to now calculate a theoretical solvency deficit the same way a private sector firm would. However the postal service is not likely to go out of business any time soon and should not be subject to such a stringent formula. The stipulation of private sector solvency calculation would only be necessary if privatization was the aim. The theoretical solvency deficit (around $5bn.) is not that bad compared to other pension plans and it is actually one of the healthiest employer provided pension plans in the country now. It should not be an issue in the negotiations at all.
Some years back, management took a short contribution holiday [1]– against the advice of the union when stock prices were high only to come crashing down during the market meltdown starting in 2008. There would be no solvency deficit at all now if the federal government did not take $26 billion, $30 billion in today’s money, from the federal public sector pension plan when it was divided up among the various public sector unions. The stolen funds were used to help balance the federal budgetary deficit (along with plundering the surpluses in the employment insurance fund) although it belonged to the workers who negotiated it. The courts deemed this legal on the part of the government. Just like the case of solvency deficit of the US postal service, our solvency deficit, which should not exist, is used as a pretext for an assault on postal workers’ pensions and the imposition of austerity and roll backs. Management has relented and agreed to keep the defined benefit system now for plan members but still wants to eliminate it for new hires. It all fits in with a privatization game plan just as is the two tier wage system which was forced on us in the last round of negotiations. Another big obstacle to settlement now is also the two tier wages, a heresy as far as CUPW is concerned.
SA – What is involved with the review of Canada Post as promised by the Liberals in the last election?
DR – The Canada Post review is one of the periodic assessments that is in the mandate of the corporation where it considers input from the public, organizations and businesses. It considers what should be the aims and directions of the corporation and sets the policies to be expressed in the Canada Post Act. The postal unions, management and private citizens also make submissions.
SA – Haven’t the Liberals stopped the Harper plan for ending door to door delivery or is that still on the table?
DR – The door-to-door elimination that was rammed through parliament in a sneaky and underhanded way by the former Conservative government is a major issue. Expansion of services is being considered also, even a return to postal banking in this country.
There was a temporary halt to elimination of door-to-door by the corporation because of all of the resistance to it and the cost and difficulty with the implementation but it could still go ahead if approved by the mandate review. There could be a compromise such as by having door-to-door delivery in major urban areas or in downtown city cores but allowing its removal in suburban areas. The Liberals did not promise to stop the removal of door-to-door delivery completely or to restore it where it has been ended. They only promised a review.
SA – Is privatization an issue?
DR – While privatization is not on the table in this review, it could be in the future. Clearly the Harper Tories were headed in that direction with Chopra at the helm. It was They were aiming at a piece-meal privatization, or through the back door by: cuts to services, elimination of door-to-door service, going for a cheap labour strategy by attacking pay and benefits for the work force and greater use of part time and casual labour, contracting out work and closure of post offices, and attack on the defined benefit pension. The writing was on the wall and if Harper had been re-elected, I would not have been surprised to see them at least attempt a partial privatization of the postal service.
SA – I understand that the union is promoting postal banking with its “Delivering Community Power” program. Can you elaborate?
DR – Postal Banking is a big part of the plan for service expansion of the postal service by the union. That is the last thing the Tories wanted to consider and still senior management completely refuses to consider it now. This is even though an independent study by CUPW and a secret one by the corporation have both shown it to be viable. Canada Post management has redacted the documents which they have about postal banking but enough of it was disclosed to show that it would be assessed as very viable as has shown to be the case in other countries where it has been implemented.
The “Delivering Community Power” program is a list of other services that the corporation could easily implement with their network of offices and delivery services. The program could be of great service to the community and provide additional employment and revenue as has been demonstrated in other countries. Assisting the elderly or infirm on delivery routes, promoting the green economy with plug in stations at post offices are just a couple examples of some potential services.
The union is now trying to get the full release of the secret documents from the corporation which proves that even their own study shows that bringing back postal banking would be very feasible option if implemented. As a crown corporation, owned by the people of Canada, the union rightly claims that this information should not be held in secret but should be disclosed to the public which owns the postal service; especially at this time, when the mandate review is being conducted.
The corporate elite of this country are attempting to set the direction and policies of our publicly owned corporation even more so than in the past. CUPW aims for democratic input and control.
SA – Are there any other major issues on the negotiating table?
DR – Staffing is also an important issue in negotiations. In the arbitration process, substantive issues such as pay and benefits may be more readily dealt with by a skilled arbitrator but they would likely be ill-equipped to deal with the large and complicated staffing issues at Canada Post during the negotiations. Also CUPW has a history of having very biased, inexperienced and unqualified arbitrators imposed on it during negotiations when there is an impasse. In negotiations in 1997 and the contract prior to this one, the Harper government imposed one such unqualified and clearly biased arbitrator. Postal workers were legislated back to work four years ago after management locked out CUPW members following a brief rotating strike in a couple of minor facilities. A recent supreme court ruling has deemed that the government’s back to work legislation was wrong but the judgement included no penalties for management or any awards to CUPW. Final offer selection[2] (that would almost certainly go in favor of the management side) in the previous contract dispute was part of Harper’s game plan to force roll backs. There was also government meddling in negotiations. There was much division in the union about whether the union should have been defiant or accept an offer that was less than what was wanted, containing some roll backs, in order to avoid the final offer selection process. This experience has also made CUPW shy of binding arbitration. [3]*
SA – What about the prospect of arbitration?
DR – Canada Post management, in this round of negotiations, had been threatening to lock out the workers once again if CUPW did not accept binding arbitration as a condition of further talks. Their tactic in this round of negotiations is to push the union into accepting concessions before the Canada Post mandate review is completed. Management applied for the mandatory conciliation process early, starting the count down to a strike or lockout situation if no settlement was reached. Usually a final or global offer is presented to the union before the conciliators are brought it. This time outrageous concessions demands were tabled and conciliation started before a still inadequate global offer was finally presented to the union just as the conciliation process expired. The firm resolve of the union negotiators to refuse to budge in the face of the bullying tactics with management seemed to have worked with the two 72 hour notices of lockout cancelled. The union has also filed for unfair labour practices and accuses management of not negotiating in good faith.
SA -What about the timing of Canada Post’s strategy in this dispute?
DR -The corporation tried to bully the union into a settlement now with the mail volumes at their lowest this time of year, if there was a work stoppage over the summer, then it would sbe less costly than if it was during a high volume season such as December or even when things pick up in September
SA – How solid are the membership ? (i.e % in favour of strike)
DR – The membership did give a very high strike mandate to the union negotiators for both the urban operation and rural and suburban bargaining units;between 90 and 95% for both. The workforce do not want to strike but feel the absurd demands of the profitable crown corporation for massive roll backs leaves us with no choice. Clearly a negotiated settlement is wanted by the negotiators and the rank and file, much preferable to an arbitrated settlement. Due to the size and complexity of Canada Post and the collective agreements of the various unions and bargaining units a negotiated settlement is much preferred, especially considering that it is not designated as an essential service. The postal service still is a very important public service and a lot is at stake. CUPW has never traditionally liked an arbitrated settlement, even with an impartial and skilled contract arbitrator.
Just like any union and collective organization, there is a wide diversity of consciousness and commitment to struggle. There is a consistent core of conscious and militant workers who are unwavering in their commitment to fight for equality, preserving the gains of the past and even making improvements. They also see the big picture and champion the need for maintaining quality public services and quality employment for workers in Canada. Postal workers’ struggles are an important element of those struggles and against the neo-liberal agenda.
There is also a large segment of union membership that is not as conscious of the struggle, are less committed, and are more insular in their perspectives. Sadly there is even a large minority of the work force with a low level of union culture and are only out for themselves and perceive management as the great provider to emulate. The mobilization around contract negotiations varies greatly between the different locals with some locals appearing to do a much better job than others.
Almost all of the older members who went through the early years of struggle and made great sacrifices to achieve the great gains of the union are now retired. Many of the new union members do not know of the struggles to achieve what was gained and take many of these gains for granted. They are less likely to be as supportive of the struggle as the older militants but there are many notable positive examples of both new and older members engagement with the union. One of the unions roles is to educate the newer members on how past victories were won.
I suppose it is much the same as in other unions as well. The social and economic conditions, the international capitalist system and the labour relations systems we inherited no doubt shapes the people in organized labour today. While labour has been on the defensive and overall bargaining clout has been weakened, unions still have a great deal of potential power and public support. CUPW may this time prove that roll backs can be avoided.
SA – The union has a strong militant history. Care to elaborate?
DR – The union does have a strong militant history, one of the more militant public sector unions, even today. It holds anti-capitalist clauses in its national constitution as well as solidarity with Palestine and Cuba. It is more pro peace and internationalist than many other unions in Canada. CUPW was a trail blazer in public sector organizing with the illegal strike in 1965 that lead to the Canadian state allowing public sector unions, collective bargaining and the right to strike. CUPW was also the first in achieving breakthroughs for the membership and concomitantly with other unions,such as maternity leave. They were also the second after the Canadian Auto Workers to achieve an employer paid education fund. It does have a proud history in the just over 50 years that it has existed. Equity struggles have always been a important to CUPW, just as it is in this round of negotiations. “The Struggle Continues” or “La Lutte Continue” is the union’s motto and very fitting today.
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Endnotes:
[1] What is a Pension Contribution Holiday? (Info taken from “Taking a Holiday – The Impact of Employer Contribution Holidays on the Funding of Defined Benefit Pension Plans” June 2005
“Pension legislation in all Canadian jurisdictions requires employers to fund the pension plan in accordance with prescribed tests and standards for solvency by way of contributions toward current service costs and any deficits.23 In most jurisdictions, the employer may apply surplus, where it exists as determined by the plan’s actuarial valuation, to cover contributions for current service costs. The plan’s actuarial valuation determines the employer’s actual contribution level, which lies somewhere between the amount of current service costs and the maximum deductible contribution, taking into consideration any surplus. Where the actuarial surplus exceeds current service costs, employers may elect to not make contributions and apply the surplus to the current service costs. This is commonly referred to as a ‘contribution holiday.’
One’s view on the practice of employer contribution holidays depends on which of three competing theoretical approaches one takes with respect to the ownership of plan assets. The accounting/economic approach, largely endorsed by employers, treats pension assets and liabilities as corporate assets and liabilities. Plan members are secured creditors to whom pensions are owed. Accordingly, the employer is require to fund any deficit and is entitled to any surplus in the plan.25 In this approach, the application of surplus to current service costs amounts to a reallocation of corporate assets on the balance sheet and is independent of any obligations owed to plan members and beneficiaries as secured creditors.
In contrast, the judicial/legislative view holds that pension assets are legally distinct from corporate assets. The pension plan is managed as a trust by fiduciaries for the benefit of plan members, not shareholders, while the shareholders are responsible for deficits. In the instance of a contribution holiday, the employer withdraws no money from the trust. Taking a contribution holiday represents neither an encroachment on the trust or a reduction of the promised benefit.26 The application of surplus to cover current service costs is the abstract application of actuarial surplus (i.e. surplus identified in the plan’s actuarial valuation), not actual surplus since the latter does not crystallize until the plan is wound up.
In the case of negotiated cost plans, a third perspective is the worker approach. This view holds that employer contributions constitute the deferred wages of workers that have been determined through the collective bargaining process. Employers are contractually obligated to contribute these sums to the pension plan regardless of its funding status. Existing surplus is owned by the plan membership and may not be used by the employer to pay current service costs. Rather, actuarial surplus should be applied in other ways for the benefit of plan members and beneficiaries. The employer remains contractually obligated to continue to make contributions regardless of the ability of the pension plan to meet the pension promise.
These approaches continuously come into conflict and form the basis for much of the existing disagreement about the practice of contribution holidays and other pension funding issues.”
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[2] Final offer selection is a method used in dispute resolution when the parties have reached an impasse. Typically, each party presents a proposal covering outstanding issues and evidence to convince the arbitrator of the superiority of its proposal. The arbitrator then selects one party’s proposal, and the selected proposal forms part or all of the terms and conditions of the collective agreement. Each party puts in a final offer of settlement of the collective agreement, and the arbitrator chooses one or the other, without discretion to substitute a settlement that is a compromise.
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[3] For an explanation of the difference between binding arbitration and final offer arbitration, see this editorial from the Toronto Star of March 2011 written in the context of a dispute involving Toronto Transit Workers
