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The legality of the new industrial relations Jamieson, Eugene Christopher 1992

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THE LEGALITY OF THE NEW INDUSTRIAL RELATIONSbyEUGENE CHRISTOPHER JAMIESONB.A., The University of Winnipeg, 1980LL.B., The University of Manitoba, 1984A THESIS SUBMITTED IN PARTIAL FULFILLMENT OFTHE REQUIREMENTS FOR THE DEGREE OFMASTER OF LAWinTHE FACULTY OF GRADUATE STUDIES(Law School)We accept this thesis as conformingto the required standardTHE UNIVERSITY OF BRITISH COLUMBIAApril 1992© Eugene Christopher Jamieson, 1992In presenting this thesis in partial fulfilment of the requirements for an advanceddegree at the University of British Columbia, I agree that the Library shall make itfreely available for reference and study. I further agree that permission for extensivecopying of this thesis for scholarly purposes may be granted by the head of mydepartment or by his or her representatives. It is understood that copying orpublication of this thesis for financial gain shall not be allowed without my writtenpermission.Department ofLaw The University of British ColumbiaVancouver, CanadaDate DE-6 (2/88)iiABSTRACTThis paper examines the extent to which industrial relationsinnovations stressing individual employee participation inworkplace decision-making conflicts with labour law in the UnitedStates of America and Canada. It begins with an overview of theeconomic imperatives facing North American business enterpriseswhich compel them to adopt industrial relations innovationsstressing employee-involvement in decision-making. The overviewalso highlights the potential conflict between these innovationsemphasizing individual employees and labour law which emphasizescollective relations with employees. Next, the paper details theeconomic landscape that makes innovation necessary in industrialrelations. The paper then describes the operation of specificinnovations: Quality of Working Life Programs, quality circles,joint labour-management committees and semi-autonomous work groups.The paper emphasizes the need to examine the relationship betweenthese innovations and labour law in historical context. Thus, thepaper next details the history of fundamental elements in NorthAmerican collective bargaining which cause particular tension forthese industrial relations innovations: the exclusion of managerialpersonnel from collective bargaining, a trade union's exclusivebargaining agent status, and the prohibition of employer dominationof or interference with trade unions. Next, the paper examines indepth the American and Canadian legislation and jurisprudenceiiisurrounding these doctrines. This results in predictions as to theextent to which these doctrines render illegal certain aspects ofthe industrial innovations. The paper concludes that there is astrong potential for conflict between labour law and theseinnovations.Managerial Exclusion^  186Exclusivity Doctrine  217Conclusion^  228Chapter 5 - Legal Implications in Canada^ 230Introduction^  230Managerial Exclusion^  234Exclusion on the Supervisory Basis^ 239Exclusion on the Policy-Making Basis^ 260British Columbia Council^ 260Ontario Board^  262Canada Board  267Potential Impact of the Managerial Exclusionon Industrial Relations Innovations^ 269Employer Domination^  274Potential Impact of Prohibition on EmployerDomination on IndustrialRelations Innovations^  285Employer Interference  291Introduced While Independent Unionis Organizing^  293Introduced After Independent Trade Union isEstablished in the Workplace^ 302Exclusive Bargaining Agent Status  306Summary^  311Chapter Six - Conclusions and Recommendations^ 313Bibliography^  319Table of Contents^ ivAbstract^Table of Contents^  ivAcknowledgements  viIntroduction^  1Chapter One - Labour Law and the New IndustrialRelations: Introduction andOverview^  5Chapter Two - The Innovations at Issue^  36The United States Scene^  38The Canadian Scene  46The Problems Faced by Organized Labour and Workers ^ 48Dealing with the New Reality^  52QWL and Committees  56Historical Background ^60Chapter Three - The Historical Roots of CentralCollective BargainingPrinciples ^94Freedom of Association ^99Exclusive Bargaining Authority^  125Management Exclusion from Collective Bargaining^ 132Chapter Four - Legal Implications in the United States ^ 142The United States Experience^  143Employer Domination^  145Section 8(a)(2)  146Definition of "Labor Organization"^ 168Managerial and Supervisory Exclusion  181Supervisors^  182viAcknowledgementsI thank Professor M.A. (Tony) Hickling for his unwaveringsupport and patience over the years as this thesis grew and grew.Let it be known it was not his idea to have a thesis of 300 pluspages. I also thank Professor J.M. MacIntyre, Q.C. for reading thethesis and for his timely suggestions. While this thesis may notdo justice to the intellectual influences underlying it, thefollowing influences must be acknowledged with deep thanks (somemay be aghast to find their name listed in the company of someothers): Professor Hickling, Gina Fiorillo, Wayne Moore, LeoMcGrady, Gavin Hume, Don Jordan, Nathan Nemetz, Matthew W. Finkin,Karl Klare. And who can forget Sir Otto Kahn-Freund (1900-1979)?Otto had sadly passed away before any inkling of law school everentered my thoughts. But his writing and intellectual traditioncontinues to inspire. And finally, I save my fondest and mostheartfelt thanks for my spouse, Mary Anne Crabtree. It will beimpossible to repay the love, patience and understanding she sounselfishly provided as the pages of this thesis, instead of we,multiplied. At minimum, I can offer this promise: a doctorate willnot soon be on the agenda.IntroductionLabour Law and the New Industrial Relations Big business is facing its most dramatic- and traumatic - transformation of thepost-war era. All large companies willeventually be affected by the comingchanges whether they want to be or notbecause they're powered by a series ofirreversible forces: rapid technologicalinnovation, intensifying globalcompetition, new employee attitudes. Theterm "downsizing" is often used todescribe the phenomenon, since one of thefirst symptoms of the transformation isthat companies become leaner. But thatword is misleading, for it suggests achange in quantity and not in the qualityof organizations. By the time thisupheaval is finished, not only willcompanies be leaner but the way they dothings will be different and the roles ofmanagers and managed will be transformedbeyond recognition.1Broader employee involvement in planningand decision making can result inimproved productivity, better productquality and more competitiveness.[T]he ability of Canadian organizationsto successfully compete is dependent ondevelopment of a new relationship betweenlabour and management, and a higher level1 D. Stoffman, "Less is More" in [Toronto] Globe & Mail,Report on Business Magazine, June 1988, at 90 (quoted in G.Adams, "Worker Participation in Corporate Decision-Making:Canada's Future?" Queen's Papers in Industrial Relations1990-3, Industrial Relations Centre, Queen's University atKingston, May 1990, at 1).2 Canada, Report of the Royal Commission on the EconomicUnion and Development Prospects for Canada, Volume 2 (Ottawa:Supply and Services Canada, 1985) (Chairman: Donald S.Macdonald) at 707.12of employee involvement and participationwithin enterprises .3[A]ll [legal]] doctrines which separateand make rigid distinctions between thosewho have a voice in how any institutionis run and those who do the work mightwell become increasingly suspect. Manyof the most promising experiments inlabor-management cooperation deliberatelyset out to blur distinctions betweenmanager and worker.4New imperatives are facing North American enterprises,imperatives which will require transformation of theseenterprises at their roots. Among the most radicaltransformations will be in the labour and industrial relationsof these enterprises. The attributes of an enterprisenecessary for it to compete in an ever-shrinking globe will bethose which emphasize substantial involvement by individualemployees in the decision-making processes of the enterprise,from the shop floor to the boardroom. This thesis considersthese coming changes and their implications on the legaledifice that surrounds the contemporary avenue through which3 R. Long, "Patterns of Workplace Innovation in Canada"(1989), 44 Relations Industrielles 805 at 806.4 S.I. Schlossberg & S.M. Fetter, U.S. Labor Law and theFuture of Labor-Management Cooperation (1987), 3 Labor Lawyer11 at 21. Schlossberg and Fetter were at the time of writing,respectively, the United States Department of Labor DeputyUnder Secretary of Labor for Labor-Management Relations andCooperative Programs and the Executive Assistant to the DeputyUnder Secretary. Their article appeared as a United StatesDepartment of Labor report under the same title, published bythe Department's Bureau of Labor-Management Relations andCooperative Programs, BLMR 104 (1988).3employees are encouraged to participate in enterprisedecision-making - collective bargaining through independenttrade unions.It is important to consider these implications at thisrelatively early stage of transformation. As will be seen,the operative premise of this industrial relationstransformation are at odds with the corresponding premise ofthe current collective bargaining regime. While theproponents of these new industrial relations strategies assumegreat similarity of interests between enterprise managementand labour, collective bargaining legislation has beentempered by the fire of conflict that is assumed to lie at theheart of labour-management relations. These underlyingassumptions foreshadow a variety of conflicts betweencontemporary collective bargaining law and what has beentermed the "New Industrial Relations". If aspects of the NewIndustrial Relations are at odds with the legal regimegoverning collective bargaining, it is best to anticipate theproblems and debate possible solutions now, before theconflict explodes immediately before us, prompting ad hoc andhasty answers. This thesis attempts to open that debate byarticulating some of the intersections at which a collision ispossible between collective bargaining law and the NewIndustrial Relations. It is hoped that the thesis will alsoinform the needed debate by placing matters in theirhistorical and economic context.4Chapter One provides an overview of the issues, and thecurrents of political theory and history that must inform anyreasoned debate. Chapter Two then reviews the economic datathat makes an industrial relations transformation apparentlyinevitable. As well, Chapter Two identifies a variety of theindustrial relations innovations that represent a sample ofthe shape of industrial relations to come. Chapter Three thenturns to an analysis of the historical roots of NorthAmerica's collective bargaining regime, with particularemphasis on those aspects of the regime which may cause themost risk for the New Industrial Relations. It is only witha firm grounding in this history that one can grasp thereasons we have a legal regime which may appear, bycontemporary standards, unnecessarily to inhibit industrialrelations innovations. Chapters Four and Five then deals withthe specific collective bargaining laws of, respectively, theUnited States of America and Canada so as to assess thelikelihood of conflict between those laws and aspects of theNew Industrial Relations.The thesis will establish that there is significant riskof conflict between the law and the innovations and, while therisk is less in Canada, both jurisdictions will need toaddress this risk in a timely manner.5Chapter OneLabour Law and the New Industrial Relations: Introduction and OverviewAny society governed by democratic principles must ensurethat employees of the society's enterprises have an effectivevoice in not only the terms and conditions under which theywork, but the entire management of the enterprise.Justification for this proposition can be found in thephilosophical roots of democratic theory and by tracing thehistorical development of government to the most recentdemocratic movements and developments in eastern Europe andwhat was then the Soviet Union. At their heart, thesedemocratic developments bespeak the importance of peoplehaving direct power in shaping decisions which intimatelyaffect their lives and well-being.1Extensive power-sharing in the workplace, however, isnotdeeply embedded in the North American vision of democracy,imbued as it is with the importance of property ownershiprights. This is so despite the direct impact strategic1 See generally, R. Dahl, Democracy and Its Critics (NewHaven, Conn.: Yale University Press, 1989), R. Dahl,Democracy, Liberty and Equality (Oslo, Norway: NorwegianUniversity Press, 1986) and C. Pateman, Participation andDemocratic Theory (Cambridge, U.K.: Cambridge UniversityPress, 1970).6enterprise decisions2 have on the lives of employees affected.The history of business enterprises and theirrelationship with their employees has consistently been one ofconflict and wrestling for power.Nineteenth-century enterprises were often subject to theautonomy of skilled craftsmen and the consequential controlthey exercised over their work processes.3 Althoughresistance from the trades was strong, employers wereeventually able to overcome the workers' control by use ofsuch methods as "scientific management" as a direct means ofappropriating knowledge from skilled craftsman andsystematically making skill less necessary in workers.4 Whenskilled craftsmen resisted this exercise of property rights bymanagement, employers had access to, and used, the law and2 Decisions affecting the short-term and long-termstrategy of an enterprise, including its business andinvestment strategies (for example, what product will beproduced or service provided, what markets will be entered,what technology will be used, what plants will be opened andclosed, etc.) and its human resources strategy. See, forinstance, T. Kochan, H. Katz & R. McKersie, The Transformationof American Industrial Relations (New York: Basic Books, 1986)at 3-20.3 See, for example, D. Montgomery, Workers' Control inAmerica (Cambridge, U.K.: Cambridge University Press, 1979) at9-31.4 H. Braverman, Labor and Monopoly Capital (New York:Monthly Review Press, 1970) at 85-152. Ironically, scientificmanagement was sold as a means to make the workplace moredemocratic by establishing work standards that could not begerrymandered by a particularly harsh foreman. See M. Derber,The American Idea of Industrial Democracy, 1865-1965 (Urbana,Illinois: University of Illinois Press, 1970).7state-supported force to undercut employees' job action.5It must be remembered, however, that skilled craftsmenwere greatly outnumbered by the masses of unskilled labourerswho fuelled the fire of industrialization. These latteremployees were generally left unorganized by the skilled craftunions and, not having empowering skills, were subjected towhat Sumner Slichter called the "drive" style of management.°It was the unrest found within their ranks, together with thereaction of the skilled craftsmen to scientific management,that sporadically, but consistently, challenged the authorityof management through organization and strikes that oftenturned violent when faced with the uniquely North American,intense employer antipathy to unions and collective5 I. Bernstein, "Labor v. The Law" in I. Bernstein, TheLean Years: A History of the American Worker 1920-1933 (Boston, Mass.: Houghton Mifflin, 1960). Describing theorganizing efforts in the American south during the late1920's, an experience which he called "a microcosm of allAmerica" during that period, Bernstein said as follows, at 41-42:The Courts issued injunctions whenever employersasked for them, all ex parte and someextraordinarily sweeping in their prohibitions.Similarly, governors were perfectly willing toorder troops into struck communities to breakstrikes.See also C. Gregory & H. Katz, Labor and the Law, 3rd ed. (NewYork: W.W. Norton, 1973) 83-104.6 S. Slichter, "The Current Labor Policies of AmericanIndustries" (1929), 43 Quarterly J. of Economics 393 at 394.8bargaining.7 Workers sought bargaining power so as to facetheir employer on a more equal footing and thereby extract agreater share of the wealth created in the enterprise forwhich they worked. Framed in the terminology of democraticideals, workers argued and fought for a type of economicdemocracy in their day-to-day work-life to complement thepolitical democracy they enjoyed.8But it is well established that North American workersdid not strive for the type of worker control of industry andthe economy that characterized class-conscious unionism and7 D. Bok, "Reflections on the Distinctive Character ofAmerican Labor Laws" (1971), 84 Harv. L. Rev. 1394 at 1409-11. Slichter, supra note 6 at 395.8 Derber, supra, note 4 at 29-59, 141-72. See also, C.Summers, "Industrial Democracy: America's Unfulfilled Promise"(1979), 28 Cleveland State L. Rev. 29, where the author statedas follows, at 29 (footnotes omitted):In 1797, when Albert Gallatin, later Secretary ofthe Treasury, established a profit sharing plan inhis glass works, he declared, "The democraticprinciples on which this nation was founded shouldnot be restricted to the political process, butshould be applied to the industrial operation aswell." The theme that our system of politicaldemocracy should be matched by a system ofindustrial democracy has been an irrepressible onein our history. This theme is not ours alone, forin every political democracy there is recognitionthat decisions of the work place may be moreimportant to the worker than decisions in thelegislative halls. Democratic principles demandthat workers have a voice in the decisions thatcontrol their working lives; human dignity requiresthat workers not be subject to oppressiveconditions or arbitrary actions. A review of thehistory of organized labor in the United Statesilluminates the tenacity of this deeply rootedidea.9socialist movements in parts of Europe during the sameperiod.9 Control of the business itself, as opposed to theterms and conditions of employment, was to be left to theowners and their management agents." What is unclear is howmuch the victory of the collective bargaining form ofindustrial democracy, and the failure of more radicalalternatives, was due to the uncoerced choice by workers forthat more limited role, or instead the lack of any realisticchance of success for more radical alternatives in light ofthe intense employer hostility to even that less radicalform." In any event, it was the collective bargaining formof industrial democracy which firmly took root in NorthAmerica during the early decades of this century. Thehistorical compromise by employers, and in context, the9^Derber, supra, note 4 at 111-40.lo S. Gompers, Labor and the Employer (New York: E.P.Dutton, 1920) at 286.W. Galenson, "The Historical Role of American TradeUnionism" in S.M. Lipset, ed. Unions in Transition: Enteringthe Second Century (San Francisco, Calif.: ICS Press, 1986) 39at 42. See also, Slichter, supra, note 6 where he states asfollows, at 398-99:The employers' alarm [over labour trouble in the1920's] was accentuated by the belief that Americanlabor was in danger of becoming radical...The dreadof radicalism was encouraged by interestedgroups...and even by Mr. [Samuel] Gompers[,president of the American Federation of Laborfrom the late 1800's to the mid 1920's,] and hislieutenants, who skilfully fostered the country'sfears in order to present conservative unionism asa bulwark against irresponsible and dangerousgroups.10victory by workers, by passage of the National Labor Relations Act12 in 1935, and later Canadian legislation modeled afterit, ushered in a period of legitimization of collectivebargaining by independent13 trade unions as the primary meansby which workers' influence in enterprises was to be realizedor channelled. This was not an insignificant victory forworkers. But that legitimization did not end employeropposition to collective bargaining or other more far-reachingincursions into the government of enterprises.While many employers accepted the legitimacy of unions,and others merely tolerated their presence, few employerswould accord their organized employees anything more thanopposition status in directing the workplace. In this form ofdemocracy the opposition could only effectively vote withtheir feet by striking, usually at great personal loss tothemselves and the enterprise as a whole. By right ofproperty ownership, or agency of ownership, management wasentitled to direct the enterprise and its workforce;14 theonly fetters placed on this employer power were those the29 U.S.C. paras. 151-169 (1982 & Supp. V 1987).13 "A hallmark of a democratic country is an organizedlabor movement that is independent of government andemployers." W. Galenson, supra note 11 at 39. See also, S.Salny, Independent Trade Unions Under the Wagner Act (Boston,Mass.: Hildreth, 1944).14 See, for instance, G. Dion, "Property and Authorityin Business Enterprise" (1961), 16 Relations Industrielles 30,and S. Young, "The Question of Managerial Prerogatives"(1963), 16 Industrial and Labor Relations Review 240.11employees were able to gain through collective bargaining andstrike action.And of course there were those employers committed tofighting unionization at every step and only to give incollective bargaining that which was essentially taken fromthem by economic pressure through strikes and other concertedjob action.The history of employer opposition to unionization iswell-documented, an opposition that has reached unprecedentedproportions in the past two decades, particularly in theUnited States. Perhaps coincidentally, the proportion of theUnited States workforce which is unionized has dramaticallydecreased over the same period, with predictions that by theyear 2000 less than 10% of the American workforce will berepresented by an independent trade union.15 Less dramatic,but similar losses are predicted for Canada's unions.16 Acommittee of the United States House of Representatives hasbeen the only governmental body to investigate thesignificance and cause of this decline. Its conclusion, witha minority dissent, was that the legal structure aimed atpreserving employee rights to collectively bargain with their15 P. Weiler, "The Representation Gap in the NorthAmerican Workplace", Larry Sefton Memorial Lecture, Universityof Toronto, Toronto, Ontario (22 February 1989) at 7; N.Salvatore, "The Decline of Labor" (Winter 1992) Dissent 86.M.L. Coates, "Is There a Future for the CanadianLabour Movement" Current Issues Series 1992-1, IndustrialRelations Centre, Queen's University at Kingston, Kingston,Ontario, at 2-4; Weiler, supra, note 15 at 8-9.12employer has failed to keep this option available to employeesby its failure to vigilantly enforce the law.17Thus, the primary means by which the law has attempted todemocratize the workplace is faltering. Recent changes tocollective bargaining legislation in Canadian jurisdictions,like British Columbia in 1987,18 show an increasingunwillingness to provide collective bargaining with the kindof support that had characterized Canadian public policy inthe preceding five decades.Against this background it would appear that theprospects for greater employee involvement in workplacedecision-making are dim indeed. Given the consistent employeropposition to the collective bargaining model of industrialdemocracy, or any other model providing workers withequivalent or greater power in the government of theenterprise, it appears unlikely that employers will, withoutsome measure of pressure being placed upon them, provide17 U.S. Congress, The Failure of Labor Law: A Betrayal of American Workers, Report of the Subcommittee on Labor-Management Relations of the Committee on Education and Labor,United States of America House of Representatives (98thCongress), Report No. 98, October 1984. See also U.S.Congress, Oversight Hearings on the Subject "Has Labor LawFailed" (Parts I and II) Joint Hearings Before theSubcommittee on Labor-Management Relations of the Committee onEducation and Labor, United States of America House ofRepresentatives (98th Congress) 21, 25 & 26 June and 3 October1984, Washington D.C.; P. Weiler, "Promises to Keep: SecuringWorkers' Rights to Self Government Under the National LaborRelations Act" (1983), 96 Harv. L. Rev. 1769.E. Jamieson, "Labour Law Reform in British Columbia:Part of the Problem or Part of the Solution?" unpublishedpaper, University of British Columbia, May 1988.13workers with anything nearing an equal partnership in managingthe enterprise. 19 That would constitute too much of areversal of historical patterns of behaviour.Surprisingly, however, we see a movement toward greateremployee involvement in the decision-making processes of NorthAmerican enterprises. n Most of the changes resulting ingreater employee participation have their roots in the intenseforeign competition North American industry has faced sincethe early 1980's and, in the unionized sector, the threat ofnonunion competition which had begun to adopt a number ofinnovative labour relations practices to make themselves moreefficient, productive and nonunion. 21 The changes started19 This is merely a restatement of the settled industrialrelations truism that "few persons like to surrender power,and the more absolute their authority has been, the morereluctant they are to let it go." A. Cox, D. Bok & R. Gorman,Labor Law: Cases and Materials, 10th ed. (Mineola, N.Y.:Foundation Press, 1986) at 12. And as stated in T. Kochan & H.Katz, Collective Bargaining and Industrial Relations, 2nd ed.(Homewood, Illinois: Irwin, 1988) at 936:Unions and employers will generally be reluctant toembark on significant efforts to change theirestablished practices unless they are experiencingstrong external or internal pressures to do so.There is tremendous inertia in any collectivebargaining relationship.20 Kochan, Katz & McKersie, supra, note 2; Long, supra,Introduction, note 3 at 812 (the majority of employeeparticipation innovations introduced in Canadian enterpriseshave occurred in the six years immediately preceding the 1985survey discussed in this study); J. Mansell, WorkplaceInnovation in Canada: Reflections on the Past...Prospects forthe Future (Ottawa: Economic Council of Canada, 1987).See, for instance, Kochan, Katz & McKersie, supra,note 2.14out with a focus on increasing the involvement in enterprisedecision-making of individual workers and informal work groupsand thereby increasing employee motivation, commitment andproblem-solving. A smaller number of innovations have alteredthe roles of labour and management at the strategic levels ofdecision-making in ways that represent fundamental departuresfrom the New Deal industrial relations system.22 Althoughsuch changes have been advocated for many years, and attemptedunsuccessfully on numerous occasions, the intense economicneed for change in the early 1980's sparked relatively moresuccessful efforts in these areas. Line managers and anincreasing number of top executives began then to seeparticipation and workplace innovations as key to addressingtwo bottom-line objectives they were under increasing pressureto enhance: productivity and product quality.23Greater employee participation has manifested itself ina variety of ways.First, participation in top level management decisions israre in the nonunion sector, and only marginally more frequentin the unionized sector. This level of participdtion rangesfrom, at its mildest, information sharing and priorconsultation between management and labour before a majorstrategic decision is taken, to its most extreme - minorityrepresentation of the employees on the corporate board ofKochan & Katz, supra, note 19 at 403.Kochan & Katz, supra, note 19 at 404.15directors 24A second form of employee participation is through jointlabour-management committees both in the unionized and non-union sectors. This has been by far the most common method ofincreasing employee participation in enterprise decision-making.3 Joint committees can vary considerably in theirmake-up, purpose, authority and the level in the organizationat which they operate.26 Common characteristics of suchcommittees include an ability to gather information about theorganization's problems within the workplace and, lessfrequently, competitive problems faced by the enterprise inthe market. This information-gathering process is usuallymatched with the power to recommend solutions to the problemsidentified, but seldom the power to require theserecommendations be implemented. The lack of power generallyheld by such committees tends to cause organized labour toview management efforts to widen the use of such committees in24 Kochan & Katz, supra, note 19 at 408-09.25^Long, supra, Introduction, note 3 at 811;^W.C.Riddell, "Labour-Management Cooperation in Canada: AnOverview" in W.C. Riddell, ed. Labour-Management Cooperationin Canada (Toronto: University of Toronto Press, 1986) 1 at 9;L. Darby, Labour Management Cooperation: A Study of Labour-Management Committees in Canada (Kingston, Ontario: IndustrialRelations Centre, Queen's University at Kingston, 1986); C.Gold, Employer-Employee Committees and Worker Participation(Ithaca, N.Y.: School of Industrial and Labor Relations,Cornell University, 1976); C. Gold, Labor-ManagementCommittees: Confrontation, Cooptation, or Cooperation? (Ithaca, N.Y.: School of Industrial and Labor Relations,Cornell University, 1986).26 Riddell, supra, note 25 at 9.16recent years with a great deal of suspicion.27 The mainimpediment to increasing the numbers of such joint effortsaimed at making labour relations more cooperative has been"the consistent rejection by large corporations of the conceptof collaborative decision-making and its implicit diffusion ofresponsibility and control. 11,28A third type of innovation is essentially a variation onthe theme of joint labour-management committees. Quality ofWorklife Programs ("QWL programs") can include joint labour-management committees, but they usually include much more thanthat. QWL programs29 is a phrase used to describe a varietyof industrial relations practices originating from theorydeveloped by industrial psychologists, sociologists and27 S. Levitan & C. Johnson, "After Hard Times - What Hopefor Labor-Management Cooperation?" Daily Labor Report (BNA),17 September 1982, at E-1 - E-3; R. Marshall, Unheard Voices: Labor and Economic Policy in a Competitive World (New York:Basic Books, 1987) at 206. See also Darby, supra, note 25, at39-40 where she concludes as follows:There are still many problems for the labour-management committees to overcome. Foremost amongthese is the question of the authority of thecommittees.. .With unclear and minimal authority toaffect change, the labour-management committeerisks being labelled as a time consuming,unproductive pretence of cooperation.Marshall, supra, note 27 at 205.29 For a more detailed definition, see K. Newton, N.Leckie & B. Pettman, "The Quality of Working Life" (1979), 4Int'l J. of Soc. Economics 193.17organization theorists.30 It is these sources, plus the QWLemphasis on the individual worker rather than the collectivebody of workers, which cause organized labour to suspect QWLprograms to be merely sophisticated behaviour modificationtechniques rather than a sincere effort by management to sharedecision-making power.31Such programs aim to draw upon the knowledge and ideas ofworkers to design a work process that both enhances theenterprises performance and provides workers with a largemeasure of autonomy so as to facilitate tapping theirknowledge and ideas. In its most advanced form, QWL programsresult in the establishment of semi-autonomous work teamswhich have broad authority over the conduct of their own work.Such work groups are said to make traditional hierarchicalmanagerial roles on the shop floor non-existent.32A fourth industrial relation innovation potentiallyresulting in greater employee participation in the managementof enterprise are employee stock ownership programs30 K. Newton, "Quality of Working Life in Canada: ASurvey" in W.C. Riddell, ed. Labour-Management Cooperation inCanada (Toronto: University of Toronto Press, 1986) 73 at 73-74.M. Parker & J. Slaughter, Choosing Sides: Unions andthe Team Concept (Boston: South End Press, 1988) 8-15.32 Long, supra, Introduction, note 3; Newton, supra, note30.18("ESOP's") .m Primarily designed to elicit greater employeecommitment to their corporate employer by providing them astake in the enterprise, ESOP's are perhaps the highestprofile innovation to achieve renewed emphasis in the1980's.34 Although the positive effect of ESOP's onenterprise productivity may be overstated,m such programshave the potential to provide employees full ownership andthus management of enterprises15 or, more often, at leastsome voice at shareholder meetings.3733 For example see Rosen & Wilson, "Employee Ownership:A New Strategy for Economic Development" (1986-87), 15 N.Y.U.Rev. of Law and Soc. Policy 211, and references cited therein.34 Business Week, "ESOP's: Are They Good For You?" 15May 1989, 116-23; J. Foustman, "When Workers Turn Bosses"[Toronto] Globe and Mail Report on Business Magazine, March1988, 41-48. See also, R.J. Long & M. Warner, "Organizations,Participation and Recession: An Analysis of Recent Evidence"(1987), 41 Relations Industrielles 65-90; Toronto StockExchange, Employee Share Ownership at Canada's PublicCorporations (Toronto: Toronto Stock Exchange, 1987); L.Pawluk, "Variable Compensation in British Columbia", LL.M.Degree Thesis, University of British Columbia, 1990.35 M.A. Conte & J. Svejnar, "The Performance Effects ofEmployee Ownership Plans" in A.S. Blinder, ed. Paying forProductivity: A Look at the Evidence (Washington, D.C.:Brookings Institution, 1990) 143.36 Often called "employee buy-outs." Rosen & Cohen,"Employees to the Rescue: The Record of Worker Buyouts"(1986), 6 J. of Law & Commerce 213.37 Seldom do employees carry a majority position, thusexplaining the heavy page-one media coverage when they do, asin the United Airlines takeover. A. Salpukas, "United Air'sWorkers and Unions to Get Final Say in Big Decisions" NewYork Times, 18 September 1989, p. 1. The takeover bid laterfailed, and then was renewed. A. Salpukas, "Owner Backs Salesof United Airline to Worker Group" New York Times, 7 April1990, p. 1.19A fifth innovation consists of placing nominees on theboard of directors of corporate employers, drawn from theemployees or their collective bargaining agent. •38 Suchrepresentation is relatively rare and tends to arise fromcircumstances when unions agree to major collective agreementconcessions.39 Unless it is a union buy-out situation, unionrepresentatives are in the minority on corporate boards onwhich they sit. However, they can provide employees with avoice in a forum where theirs was not directly heard before.All these innovations are said to point to a new-foundcooperative spirit developing in North American enterprisesand a corresponding decline of adversarial relationships thathave traditionally characterized industrial relations.°Organized labour, faced with substantially decliningmembership roles, and employers facing the recession of the1980's and early 1990's and heightened internationalcompetition and sluggish productivity growth, are said now tohave matured sufficiently to restructure their relationship,emphasizing what common interests they have and de-emphasizing^38^D. Fraser, "Worker Participation in CorporateGovernment: The U.A.W.-Chrysler Experience" (1982), 58Chicago-Kent L. Rev. 949; Kochan & Katz, supra, note 19 at410-14; H.A. Jain & A. Giles, "Workers Participation inWestern Europe: Implications for North America" (1985), 40Relations Industrielles 747-73 (employee representation onboards of directors are scarce in Canada).39 Kochan & Katz, supra, note 19.Business Week, "Special Report: The New IndustrialRelations" 11 May 1981, p. 84.20the conflict in their interests.The innovations introduced on the previous pages havereached such a high incidence° that industrial relationswriters are speaking of a fundamental transformation ofindustrial relations so significant as to compare with theperiod when collective bargaining took hold as a primary meansby which employer-employee relations were governed.42 Byappreciating the historical context within which thistransformation is occurring - lessened power of organizedlabour and consistent employer opposition to power-sharingwith employees through collective bargaining - this apparenttransformation becomes a particularly fascinating topic ofstudy. Many earlier industrial relations observers havethought their time marked the commencement of a fundamentallynew beginning. 43 This historical context leads one to wonderabout the sincerity of employers participating in such atransformation, the effectiveness of these initiatives inLong, supra, Introduction, note 3, and AmericanManagement Association, The Changing American Workplace: WorkAlternatives in the 1980's (New York: A. M. A., 1985).42 Kochan, Katz & McKersie, supra, note 2.43 Canada, Canadian Industrial Relations: Report of TaskForce on Labour Relations (Ottawa: Privy Council Office, 1968)(H.D. Woods, Chairman) at 38 ("These changes may well work atransformation in the nature and role of employment, tradeunionism and collective bargaining, particularly in relationto decision making."). See also, J.T. Dunlop, "IndustrialRelations - Old and New", First Annual D. Wood VisitingLectureship in Industrial Relations (19 November 1987),Reprint Series No. 74, Industrial Relations Centre, Queen'sUniversity at Kingston, Ontario, 1988 at 1.21providing employees with greater say in the enterprises, andthe longevity prospects of these new initiatives, originatingas many are in economic crisis of enterprises; thedevelopments are just so at odds with the attitude employers'have historically exhibited towards increased employee power.Scepticism must therefore temper the optimism that theseinitiatives will substantially alter the balance of power inthe workplace.The scepticism that this power-sharing will actuallyoccur is important to pursue since it appears many of theseinitiatives potentially conflict with legal doctrines thathave developed around the traditional adversarial collectivebargaining process. Consequently, in an effort to encouragewhat appears to be a breakout of workplace cooperation,scholars and government representatives have suggestedadjusting these legal doctrines when in conflict with newindustrial relations initiatives.44 The significance of such44 As former United States Secretary of Labor John T.Dunlop puts it, "we have inherited a legal framework ofindustrial relations that is destructive to our economicfuture." J.T. Dunlop, "The Legal Framework of IndustrialRelations and the Economic Future of the United States" inC.J. Morris, ed. American Labor Policy (Washington, D.C.:Bureau of National Affairs, 1987) 1 at 8. See also: U.S.Dept. of Labor, United States Labor Law and the Future ofLabor-Management Cooperation, Bureau of Labor-ManagementRelations and Cooperative Programs, BLMR 104, 1988; U.S.Dept. of Labor, United States Labor Law and the Future ofLabor-Management Cooperation - Final Report, Bureau of Labor-Management Relations and Cooperative Programs, BLMR 134, June1989; K. Stone, "Labor and Corporate Structure: ChangingConceptions and Emerging Possibilities" (1988), 55 U. ChicagoL. Rev. 73; D. Sockell, "The Legality of EmployeeParticipation Programs in Unionized Firms" (1984), 37 Ind. &22suggestions becomes apparent as one appreciates thefundamental nature of some doctrines suggested for reform.Some writers suggest, for instance, that the doctrine of tradeunion exclusivity in dealing with the employer over terms andconditions of employment must be relaxed.45 Other areas ofreform include the managerial exclusion from bargainingunits," the definition of employer domination orLabor Rel. Rev. 541; Schmidman & Keller, "EmployeeParticipation Plans as Section 8(a)(2) Violations" (1984), 35Labor L. J. 772; H. Sangerman, "Employee Committees: Can TheySurvive Under the Taft-Hartley Act?" (1973), 24 Labor L. J.684; H. Perritt, "Aspects of Labor Law Affecting Labor-Management Cooperation in the Railroad and Airline Industries"(1989), 16 Pepperdine L. Rev. 501; Note, "Worker Ownershipand Section 8(a)(2) of the National Labor Relations Act"(1982), 91 Yale L. J. 615; Note, "Collective Bargaining as anIndustrial System: An Argument Against Judicial Revision ofSection 8(a)(2) of the N.L.R.A." (1983), 96 Harv. L. Rev.1662; T. Kohler, "Models of Worker Participation: TheUncertain Significance of Section 8(a)(2)" (1986), 27 BostonCollege L. Rev. 499; S. Gardner, "The N.L.R.A. and WorkerParticipation Plans: Allies or Adversaries?" (1988), 16Pepperdine L. Rev. 1; S. Clarke, "Rethinking the AdversarialModel in Labor Relations: An Argument for the Repeal ofSection 8(a)(2)" (1987), 96 Yale L. J. 2021; J. Blackburn,"Worker Participation on Corporate Directorates: Is AmericaReady for Industrial Democracy?" (1981), 18 Houston L. Rev.349; C. Jackson, "An Alternative to Unionization and theWholly Unorganized Shop: A Legal Basis for Sanctioning JointEmployer-Employee Committees and Increasing Employee FreeChoice" (1977), 28 Syracuse L. Rev. 809.45 See, for instance, C. Hecksher, The New Unionism: Employee Involvement in the Changing Corporation (New York:Basic Books, 1988) 183-85, 224 and 252-53; Kochan, Katz &McKersie, supra, note 2 at 235.46 A. Bixler, "Industrial Democracy and the ManagerialException to the N.L.R.A." (1985), 133 U. Penn. L. Rev. 441;J. Begin & B. Lee, "N.L.R.A. Exclusion Criteria andProfessional Workers" (1987), 26 Industrial Relations 83; R.Rabban, "Distinguishing Excluded Managers from CoveredProfessional Under the N.L.R.A." (1989), 89 Colum. L. Rev.23interference with the formation or administration of a tradeunion47 and the duty of fair representation owed by a unionto those it represents." In short, some of the centraldoctrines of the collective bargaining model of employer-employee relations are being measured for their consistency,or lack thereof, with the needs of the "New IndustrialRelations."49The debate contains more than a passing resemblance tothat which accompanied Congress' consideration of the originalNational Labour Relation Act in 1935. There too the debatepitched cooperative labour relation programs in the form ofshop committees or representation plans initiated by employersagainst the need for legal doctrines shaped by the realitiesof the embittered conflict that often infected employer-1775.47 S. Clarke, "Rethinking the Adversarial Model of LaborRelations: An Argument for Repeal of s. 8(a)(2)" (1987), 96Yale L. J. 2021; R. Rabban, "Can American Labor LawAccommodate Collective Bargaining by Professional Employees?"(1990), 99 Yale L. J. 689, esp. 739-56.48 "Labor-Management Cooperation and the Duty of FairRepresentation" in U.S. Dept. of Labor, United States LaborLaw and the Future of Labor-Management Cooperation - SecondInterim Report, Bureau of Labor-Management Relations andCooperative Programs, BLMR 119, October 1987, 39-76.49 "A significant determinant of the growth of economicdemocracy and worker participation will be the extent to whichthese arrangements are compatible with existing labor laws,especially the National Labor Relations Act." Marshall,supra, note 27 at 207. He adds, at 211: "High priority shouldbe given to amending labor and other laws to remove theselegal obstacles."24employee relations."Even the terminology of the New Industrial Relationsechoes that of the human relationists of that earlier era.For instance, Sumner Slichter, writing in 1929, describedthen-developing industrial relations policies:Possibly the most important determinant of post-warlabor policies, at least during the last four orfive years, has been the growing realization bymanagers of the close relationship betweenindustrial morale and efficiency. When the severedrop in prices and in sales during 1920 and 1921caused managers to search meticulously for methodsof cutting costs and of increasing sales, many wayswere found in which the workers could help if theywould. Spurred by financial necessity, managerssought the aid of their employees to anunprecedented extent in saving material, reducingthe wear and tear on equipment, diminishing theamount of spoiled product, improving the quality ofworkmanship and even soliciting additionalbusiness. Some concerns...have used their shopcommittees to reduce costs. The committees havesuggested ways of saving labor and materials, theyhave made improvements in the location of the toolrooms and in the methods of issuing tools, theyhave helped increase the value of scrap bysegregating materials of varying composition, andthey have assisted in raising the quality ofworkmanship...[T]he workers responded to appealsfor their help with almost startling generosity.And naturally this response has profoundly affectedthe labor policies of employers. The more plainlythe workers have demonstrated the value of theircooperation, the greater has become the interest ofmanagers in labor's good will.51In 1928 Charles M. Schwab, the veteran head of industrialrelations at Bethlehem Steel (whose career dated back to the5o Kohler, supra, note 44 at 531-33; I. Bernstein, TheNew Deal Collective Bargaining Policy (Berkeley, Calif.:University of California Press, 1950).Slichter, supra, note 6 at 401-404 (emphasis inoriginal).25bloody Homestead strike of 1892),52 spoke of the humanengineering theories in this way:[H]appiness ... lies in the doing of the days workwith a zest and good-will, under the spur ofencouragement and rewarded with the satisfaction ofachievement. This requires the cooperation oflabor itself, not merely of the hand but of theheart as well. To obtain that cooperation requiresleadership in industry that regards itself not aspartisan but as a trustee striving to guide theefforts of both capital and labor into profitablechannels."The industrial relations practice Schwab identified as the"cornerstone of Bethlehem's relations with its employees ...[was] the employees' representation plan,"54 similar instructure with many current joint employer-employeecommittees. Regarding these representation plans, which weregenerally no more than company-dominated associations,"Schwab said:It is true that just as in any human relationshipsthere are day-to-day problems arising in industrialrelations which, if not settled with full justiceto each, will threaten this bond of friendship[between employers and employees]. But the needfor a medium for preventing or adjusting breachesin relations is not the whole objective ofemployees and employers. Essentially these twoparties have been seeking a medium that wouldprovide a common meeting ground. They have reallybeen seeking for a way of living together which52 D. Brody, "The Rise and Decline of Welfare Capitalism"in D. Brody, Workers in Industrial America (New York: OxfordUniversity Press, 1980) 49.C.M. Schwab, "Human Engineering" (1928), 10 Law &Labor (New York City) 14 at 14.54 Schwab, supra, note 53 at 16.55 Brody, supra, note 53 at 58.26would permit an expression of their personality andyet cement and increase this friendship. Theemployee-representation movement is such aconstructive medium, permitting not only settlementof questions on which there is a conflict ofinterest, but, of even more importance, offering anunobstructed channel through which their unity ofinterest may be promoted. ... The [representation]plan, in its essentials, provides for the electionby ballot of representatives by and from among theemployees. It has for its purpose fourfundamentals: to give the employees a voice in thedetermination of the conditions under which theywork, to promote cooperation between employees andmanagement in matters of efficient and economy, tofurnish machinery for the prevention and adjustmentof differences, and so far as possible to provideand foster continuous employment.56During Senate debate on the National Labor Relations Act in1935, employer representatives lamented the damage the Actwould do to company unions, or representation plans - whichthey described as effective and fair instruments of employeerepresentation - by the Act's prohibition on employerinterference or domination of any labour organization whichdeals with the employer over terms and conditions ofemployment.57 Irving Bernstein summarized the employers'arguments before the Senate Committee:[The Act], industry charged, assumed an unalterableconflict between employee and employer which could56 Schwab, supra, note 53 at 16. This idyllic model ofcooperation, however, was tempered by Schwab's knowledge ofwho ultimately was the boss; in reference to Bethlehem'swidely praised representation plan, Schwab said as follows:"I will not permit myself to be in a position of having labordictate to management." (Quoted in Brody, supra, note 52 at58.)57 I. Bernstein, Turbulent Years: A History of theAmerican Worker 1933-1941 (Boston: Houghton Mifflin, 1970)338.27not be changed or abated except through governmentintervention. Business, on the contrary, assertedan identity of interest between management and men... "Existing satisfactory relationships" would beupset, with detrimental results to operations.Bethlehem Steel, a pioneer in company unionism,asserted [company unions or representation plans]to be "the most practical method by which laborrelationships may be carried on, not only from thestandpoint of employers and employees but also fromthat of the public welfare." Employers defended itas an efficient system for dispensing ofcomplaints, as conforming with employee wishes (aselections of representatives attested), and asbeing conducted without discrimination based onmembership. While the trade union drew the line ofbattle between the classes, the company unionassumed that "the best interests of labor can beserved by having the employee and employer sit downtogether in a friendly and constructive atmosphereand, with a firsthand practical knowledge of theirproblems, work out a fair and equitablesolution. ,,58Compare those comments with the rhetoric of the NewIndustrial Relations and one has a difficult time determiningwhether the writer writes now or then. For instance, in 1986William E. Brock, a Secretary of Labor in the ReaganAdministration, stated:The years I have spent as a member of Congress, asthe U.S. Trade Representative, and now as Secretaryof Labor, have convinced me that adversarial,legalistic, inflexible labor-managementrelationships are no longer serving the bestinterests of the worker, the employer, theenterprise or the economy. Especially whencompanies ... with cooperative labor-relationsdemonstrate competitive strength, increasedproductivity, better labor relations, andproduction of a quality product at a competitiveprice ... Adversarial labor relations may have beenan important factor in the maturing of our economy,but I am committed to the proposition that futureprosperity will be built on the foundation ofBernstein, supra, note 57 at 338.28cooperative labor relations.59Jack Barbash is perhaps more candid when he states:The carrot side of union avoidance is unionsubstitution. Management's union substitutionrecognizes the need for equity in the workplace butwithout a union. Management buys out, so to speak,union-proneness by "human resources management"(HRM). HRM "bypass[es] the union and deal[s]directly with the worker and his needs." ... On themoney side HRM "compete[s] with the compensationand benefits existing in collective bargaining."On the human side, management looks to "the designof the organization and the workplace, theleadership performance of superiors and theinvolvement of individuals and small groups ofworkers in workplace problems and decisions" tobring about a fair, agreeable and participatorywork environment •60Contrasting traditional adversarial labour relations with theNew Industrial Relations, an industrial relations commentatorrecently wrote:Slowly, but steadily, management has been learningthat quality, not only cost, is key to marketsuccess. Understanding either by looking at theirJapanese counterparts or by probing into their ownpast practices, the potential embodied in"productivity through people" management hasadopted a new outlook toward their role andindustrial relations function in the workplace ...Managers are now seen as culture builders. Theyare expected to manage their subordinates'commitment and motivation, thus inducing them toraise their efforts at work and concern for productquality ... Once this notion has made its way intomanagements' frame of reference, managementsrecognize (a) the inevitable link between thequality of industrial relations in their own houseand the quality of the product they produce, and59^W.E. Brock,Management" (1986), 360 J. Barbash,United States: Phase(footnotes omitted)."New Cooperation Between Labor andDetroit College L. Rev. 689 at 690-91."The New Industrial Relations in theII" (1988), 43 Rel. Ind. 32 at 36-3729(b) the importance of the individual worker toquality production, because "the people down in thepits are the ones who really understand what'swrong with the system." Consequently, managementshave been trying to better manage their workers'motivation in an attempt to make them invest moreenergy in producing better products.But, one cannot extract higher workermotivation and commitment, arguably indispensableingredients for manufacturing better qualityproducts, without creating a supportive environmentof high trust, openness, cooperation, and easycommunication ...Growing managements' awareness of the linkbetween worker motivation and commitment and acompany's competitiveness underlies a radicalchange in a major assumption long-held bymanagement and unions - that industrial relationsare adversarial by nature.61The close parallels in rhetoric and substance between theNew Industrial Relations and the employer-dominatedrepresentation plans and company unions described by Schwab,Slichter and Bernstein, highlight the care which must be takenbefore fundamental collective bargaining doctrines - formedfrom the desire to avoid company unionism and employerdomination - are radically altered or jettisoned altogether inan effort to embrace more cooperative labour relations. Itmay well be that the adversarial model of labour relationsevident in the collective bargaining model hinders cooperativelabour relations initiatives which are key to future economicprosperity. But workers may never experience their fair shareof the fruits of that prosperity if the primary mechanism byY. Reshef, "Changing Environments and ManagementIndustrial Relations Practices: Implications for United StatesTrade Unions" (1988), 43 Rel. Ind. 43 at 48-49 (footnotesomitted).30which they have obtained a share in the past - collectivebargaining through independent trade unions - is substantiallyweakened by legal reform aimed at encouraging cooperativelabour relations.This is not to say, however, that recent industrialrelations innovations should not be given an opportunity toestablish that they are more than reincarnations of earlierpractices that were hostile to employee rights and realemployee power in the decision-making processes of theenterprise. In their best light, these recent initiativescreate encouraging possibilities for greater democratizationof the workplace.62 Coupled with the inherent limits onemployee power through collective bargaining as practised inNorth America over the past five and one-half decades,6362 K. Klare, "Workplace Democracy and MarketReconstruction: An Agenda for Legal Reform" (1988), 38Catholic U. L. Rev. 1; K. Klare, "The Labor-ManagementCooperation Debate: A Workplace Democracy Perspective" (1988),23 Harv. C.R.-C.L. L. Rev. 39; K. Stone, "Labor and theCorporate Structure: Changing Conceptions and EmergingPossibilities" (1988), 55 U. Chicago L. Rev. 73.See: K. Klare, "Judicial Deradicalization of theWagner Act and the Origins of Modern Legal Consciousness"(1978), 62 Minn. L. Rev. 265 and K. Stone, "The Post-WarParadigm in American Labor Law" (1981), 90 Yale L. J. 1509.But see: M. Finkin, "Revisionism in Labor Law" (1984), 43Maryland L. Rev. 23; K. Klare, Traditional Labor LawScholarship and the Crisis of Collective Bargaining: A Replyto Professor Finkin" (1985), 44 Maryland L. Rev. 731; M.Finkin, "Does Karl Klare Protest Too Much?" (1985), 44Maryland L. Rev. 1100; K. Klare, "Lost Opportunity:Concluding Thoughts on the Finkin Critique" (1985), 44Maryland L. Rev. 1111; K. Stone. "Re-Envisioning Labor Law:A Response to Professor Finkin" (1986), 45 Maryland L. Rev.978.31these new initiatives could be warmly embraced by workers.But this is likely only if, unlike earlier similarinnovations, real power is given up by management andtransferred to employees through these initiatives.Interestingly, commentators have suggested that whatdistinguishes these recent initiatives from their earliercousins is the real transfer of power which is intended toaccompany them." Indeed, the positive economic effectspromised by these innovations is said to be dependent uponmanagement transferring real decision-making power toemployees. If power is in fact transferred through theseinitiatives, policy makers may have a stronger appetite toadjust the underpinnings of entrenched collective bargaininglegislation to accommodate these new innovations.Thus, the first matter that must be determined iswhether, and if so, to what extent, these innovations runcontrary to legal doctrines underlying our collectivebargaining system. In this regard, the law of four NorthAmerican jurisdictions will be considered. These are thefederal United States, British Columbia, Ontario and theCanadian federal collective bargaining legislation. TheAmerican experience is examined because the literature andcase law on such issues is much further advanced than that inCanada. The British Columbia, Ontario and federal legalregimes are used because of their historic bell-wether role in64 Kochan, Katz & McKersie, supra, note 2.3 2Canadian labour legislation history. 65If legal problems are likely, as I believe they are, thedebate must begin about the wisdom of adjusting these legaldoctrines to accommodate the innovations. A key factor indetermining the wisdom of such a move is the degree to whichworkers are empowered by these innovations as compared to theempowerment provided by current labour law doctrines. Onlythen will we be able to properly gauge the wisdom ofaccommodating legal reform.While comparing the degree of worker empowermentavailable through the New Industrial Relations and undilutedcollective bargaining legislation is an importantconsideration if democratizing the workplace is a goal, itcannot be the only comparison made. Enterprise economicperformance under each must also be gauged. A democraticworkplace is only a useful ideal if it is also economicallyviable. This should not prove to be a level of analysisworkplace democracy advocates will have a difficult timesurviving. There appears to be a general consensus in theliterature that many of the innovations included within theNew Industrial Relations have at least some positive effect onproductivity and overall economic performance of theenterprises that use a number of these innovations in tandem65 G. Adams, Canadian Labour Law (Aurora, Ont.: CanadaLaw Book, 1985) Chapter 2.33with each other. 66 Although there is evidence that totallydemocratic workplaces (i.e., those run entirely by and for thebenefit of its employee/owners) experience competitiveproblems in the market,67 the consensus appears to be that amore democratic workplace than is currently common is moreeconomically viable. In fact, it is the close correlationbetween increased democratization of the workplace and greaterenterprise economic prosperity which has attracted employersto the New Industrial Relations. For employers and businesscommentators it is the economic promise of "the new industrialrelations" which catches their imagination and attention;fulfilling democratic ideals is seen as a beneficial sideeffect. As Charlotte Gold has stated in reference to oneaspect of "the new industrial relations" (joint employee-employer committees):Some proponents of joint committees are interestedprimarily in greater productivity, but see employeesatisfaction as an added benefit. Others considerincreased employee satisfaction, achieved throughimproving the quality of work life, to be the mainpurpose of these efforts, with increased efficiencyand improvement in the quality of goods produced asFor example, see Kochan, Katz & McKersie, supra, note2.67 See, for example: 0. Williamson, The Economic Insti-tutions of Capitalism (1985) Chap. 12 at 298-325; Jensen &Meckling, "Rights and Production Function: An Application toLabor-Managed Firms" (1979), 52 J. of Business 469. But see:J.F. Witte, Democracy, Authority and Alienation in Work: Workers' Participation in an American Corporation (Chicago:University of Chicago Press, 1980); E. Greenberg, Workplace Democracy: The Political Effects of Participation (1986).34fortuitous side effects.68It should be neither surprising nor distressing to findthat employers and workers are motivated by differentconsiderations in embracing the possibilities of "the newindustrial relations." It merely illustrates the conflict ofinterest that has always fuelled their relationship. However,these conflict of motivation and interest are importantillustrations of why we must be wary as we approach effortsfor legal reform aimed at achieving more cooperative labourrelations; when premised as these efforts are, on differentgoals as between employers and employees, the result of theseefforts may be to the liking of neither party. Thedisappointment of that result should not be compounded by thedifficulty of retrieving a collective bargaining legalframework that was modified to encourage such cooperativelabour relations.While assessing the wisdom of adjusting collectivebargaining legislation to accommodate the New IndustrialRelations is beyond the scope of this paper, the paper willserve to illustrate that such a debate is necessary byidentifying the conflict between the law and the NewIndustrial Relations. Specifically, those aspects of the NewIndustrial Relations to be examined for their legality will bethe second and third innovations introduced above (joint68 C. Gold, Labour-Management Committees: Confrontation, Cooptation or Cooperation? (Ithaca. N.Y.: I.L.R. Press,Cornell University, 1986) 10.35employee-employer committees and Quality of Work Lifeprograms, including semi-autonomous work teams). The legaldoctrines against which they will be measured will be: (i)those prohibiting employer domination of or interference withthe formation or administration of labour organizations; (ii)those excluding managerial personnel from the protection ofcollective bargaining legislation; and (iii) those providingexclusive bargaining agent status to unions selected by amajority of employees in a bargaining unit.36Chapter TwoThe Innovations at Issue"Concession bargaining" was the over-riding theme ofcollective bargaining in North America during the 1980's.Unions were regularly pushed to, and often did, agree toexplicit reductions in labour costs through wage cuts,loosening work rules and the like, in an effort to improve jobsecurity. Not since the 1920's and 1930's had there been asmuch bargaining over union give-backs. 1Despite its proportions, however, this practice wasmerely one of the more obvious effects of deep-rooted andfundamental changes and challenges faced by the North Americaneconomy that became apparent during that period and which hassince inspired technological and industrial relationsinnovation in a variety of key enterprises.No one event or factor in isolation fully explains thenature and extent of adjustments that have been required ofNorth American enterprises in order to survive. However,taken together, a variety of developments over the pastquarter century help explain the economic realities faced byNorth American enterprises and the impetus for thetransformation in industrial relations currently under way.1 P. Cappelli & R. McKersie, "Labor and the Crisis inCollective Bargaining" in T.A. Kochan, ed., Challenges andChoices Facing American Labor (Cambridge, Mass.: MIT Press,1985) 227 at 227, 230-31.37Before detailing these developments, it is important toappreciate just how pressing were the economic difficultiesfacing North American enterprises. As will be seen later inthis Chapter, the economic imperatives facing North Americanenterprises in the 1980's and early 1990's represented muchmore than the down side of the natural ebb and flow of theeconomy. Fundamental and permanent economic changes hadoccurred and it was imperative that equally fundamental andpermanent changes occur in the way enterprises conductbusiness. Such imperatives represent the single mostsignificant factor in motivating fundamental enterprisechanges in industrial relations practices. Because the neweconomic imperatives are permanent in nature, there is agreater likelihood that resulting industrial relations changewill last and diffuse across the economy as a long-termsurvival tactic. Since these industrial relations changes aremore than a passing fad, we must take seriously theirimplications for North American labour law. If the lawpresents a serious impediment to adoption of industrialrelations innovations prescribed for economic well-being, thecall for labour law reform will come quickly and loudly. Thiscall must be answered in an informed manner, with a fullunderstanding of both what the innovations entail, and whatprotection of labour law may be lost.This Chapter will explain what the innovations entail.The Chapter will begin by explaining the economic pressures38which have spurred fundamental changes in industrial relationspractices. Next, this Chapter will explain details of theindustrial relations innovations that have bee9 adopted inresponse to economic pressures, and which, as we shall see inlater Chapters, challenge the legal underpinnings of NorthAmerican collective bargaining.While a variety of industrial relations innovations haveresulted from the economic pressures of our times, thisChapter will only discuss those innovations that both enjoy arelatively wide-spread use, and which may prove mostvulnerable under collective bargaining law. These innovationsare: (i) joint employee-employer committees/quality circles;and (ii) other Quality of Work Life program, including semi-autonomous work teams.The United States SceneThe United States entered the 1980's reeling from thesteady loss over the previous two decades of its dominance inthe international economy.During the post-World War II era, the U.S. was unmatchedin its command of, and yet its domestic independence from,world markets and trade. Although only a small fraction ofits productive capacity served foreign markets, it dominatedthe world economy.2 For example, in 1950, the United States2 R. Reich, The Next American Frontier (New York: TimesBooks, 1983) 117-27.39provided almost half of the world's industrial output.3 Andon the home front, with its high-volume, standardizedproduction methods, it faced virtually no competition fromforeign-made goods.4However, the period from 1960 to 1980 ushered in an endto America's hegemony and insulation.By 1980 more than 70 per cent of all the goods producedin the United States were actively competing with foreign-madegoods.° Newly industrializing countries, with the poorbargaining power and hence wages of their workers and theconsequential ease with which such countries could attractinvestment capital, turned high volume, standardizedproduction methods against the Americans.°Eighty-five per cent of the 36 million new entrants intothe world labour force each year from 1980 to the year 2000will be from developing nations.7Beginning in the mid-1960's, foreign imports claimed an3 R. Marshall, Unheard Voices: Labor and Economic Policyin A Competitive World (New York: Basic Books, 1987) 12.4 Reich, supra, note 2 at 121.5 United States Department of Commerce, International Economic Indicators (Washington, D.C.: U.S. GovernmentPrinting Office, 1987).6 Reich, supra, note 2 at 122-27. See also, C. Sabel,Work and Politics: The Division of Labour in Industry(Cambridge, U.K.: Cambridge University Press, 1982) 195-97.7 International Labour Organization, Yearbook of LabourStatistics (Geneva: I.L.O., 1975).40increasing share of the American market.8 During this periodthe American share of world trade dropped nearly 40 per cent.9While the United States rested on its laurels, otherindustrialized nations were preparing to challenge Americancompetitors. The 1960's saw nations such as Japan and WestGermany shift their emphasis and resources away from"Fordist"" mass-production methods into more flexible,specialized, short-run types of production methods thatrequired workers with greater skill." Thus, starting in the8 Reich, supra, note 2 at 121-22 where the author statesas follows:[b]y 1981 America was importing almost 26per cent of its cars, 25 per cent of itssteel, 60 per cent of it televisions,radios, tape recorders, and phonographs,43 per cent of its calculators, 27 percent of its metal-forming machine tools,35 per cent of its textile machinery, and53 per cent of its numerically controlledmachine tools. Twenty years before,imports had accounted for less than 10per cent of the U.S. market for each ofthese products. Between 1970 and 1980imports from developing nations increasedalmost ten fold.9 B. Bluestone & B. Harrison, The Deindustrialization ofAmerica: Plant Closings, Community Abandonment and theDismantling of Basic Industry (New York: Basic Books, 1982)140. Reich, supra, note 2 at 122.10^"Fordist" or "Fordism" refers to the type ofproduction methods pioneered by the Ford Motor Company andcharacterized by long runs of uniform products produced on anassembly line. Labour is generally unskilled and conceptionof the work is separated from its execution. See, Sabel,supra, note 6 at 32-33, 194.Sabel, supra, note 6 at 204 et seq. Reich, supra,note 2 at 127-33.41mid-1960's the economy,12 as well as the productivityrates, 13 of these countries began to grow at a pace greaterthan that of the United States, to the point where, at the endof the 1970's, the United States lost its place as the world'seconomic leader. And that was before the extreme worldrecession that began in the late 1970's and early 1980's, ashock which Japan and West Germany survived with lowerunemployment and inflation rates, and higher economic growthrates, than did the United States.14This recession was not just a regular downturn in the ebband flow of the business cycle. It constituted the mostsevere depression since the 1930's and, perhaps moresignificantly, it marked the demise of traditional governmentpolicies aimed at dealing with downturns in the economy:5Keynesian economic theory had called on government to primethe economy's pump during low ebbs of the business cycle.However, with the 1980's recession, this method was notworking as high unemployment became coupled with high12 Reich, supra, note 2 at 118.Reich, supra, note 2 at 118. See also P. Passell,"America's Position in the Economic Race: What the NumbersShow and Conceal" The New York Times, 4 March 1990, Section E,p. 4-5, where the author states, at 4: "The rate of growth ofUnited States productivity has lagged far behind Japan's forfour decades and has declined by half since the 1960's."14 Reich, supra, note 2 at 118.W.C. Riddell, "Wage Flexibility and Public Policy inCanada", a paper presented to the Pacific Rim Labour PolicyConference, June 25-26, 1987, Vancouver, British Columbia, at12.42inflation rates. In response, the United States adopted amonetary policy, which Canada quickly followed, that was aimedprimarily at inflation by reducing, rather than expanding,demand. While the policy had the desired result of reducinginflation rates, there was a tremendous cost in terms of lostemployment, lost output, bankruptcies and businessfailures.16 The implications of this type of policy areclear: businesses have to possess an enterprise flexibilityfor adjusting to change so as to avoid, as much as possible,the negative implications of a slowed-demand monetary policy.This bleak picture of the United State's position interms of international competition was compounded by somethinghinted at above - a fundamental shift in the type ofproduction methods and goods and services that would succeedin the international marketplace. Whereas the United Stateshad risen to prominence with large, standardized, mass-production facilities, the high-growth industries that arefuelling America's competitors are those that depend uponskilled workers and the most current technological innovationsto produce specialized goods and services in a manner that isfluid and flexible enough to shift quickly with marketdemands.17 Success in the international marketplace hasdepended on the ability of Fordist industrial enterprises toRiddell, supra, note 15 at 6-7.Reich, supra, note 2 at 127-33. See also, Sabel,supra, note 6.43up-grade themselves into such "flexible-system"enterprises.18A problem mentioned briefly above, but deserving ofparticular emphasis, is the low level of enterpriseproductivity growth19 in the United States relative to itsmajor trading partners over the past two decades. Some havesuggested this is the most important reason for the loss ofcompetitiveness by U.S.-based industries.20 Between 1948 and1965, productivity grew a respectable 3.2 per cent. Between1965 and 1973, however, this growth slowed to 2.4 per cent,and then to 1.1 per cent between 1973 and 1978 before fallinginto negative growth in 1979 and 1980. Productivity growthcame out of deficit levels again in 1981, but did not riseabove 1 per cent between that year and 1987,21 edged upus Reich, supra, note 2 at 129-30.19 "Productivity" is essentially the ratio of outputs(eg. products produced by the enterprise) to inputs (eg.capital costs, labour costs). Along with labour and capitalcosts, productivity is an efficiency measuring tool. See, forinstance, Marshall, supra, note 3 at 73. It has beenforcefully argued that the further bureaucratization ofmanagement during this period contributed significantly to theproductivity growth problem. Bluestone & Harrison, supra,note 9 at 159-60 and D. Gordon, "Capital-Labor Conflict andthe Productivity Slowdown" (1981), 71 American Economic Rev.,Papers and Proceedings 30 at 30-35.Marshall, supra, note 3 at 73.Reich, supra, note 2 at 118 and Marshall, supra, note3 at 74-75. While American productivity levels are probably,on average, still higher than found in many industrializedcountries, the slow growth relative to such countries isindicative of the slow stagnation that has characterized theAmerican economy in recent years. It also holds ominousovertones for the future since it foreshadows the eventual44slightly to two per cent in 1988 and then slipped back tonine-tenths of one per cent in 1989.22 And it has beensuggested that these increases in productivity growth waslargely due to fewer workers being employed.23 These ratesof productivity growth are to be contrasted with the 7.1 percent growth rate in Japan between 1976 and 1981, and the 3.9per cent rate in France and the 3.4 per cent rate in WestGermany over those years.24 Between 1950 and 1980, theUnited States had the lowest overall productivity growth rateof any industrialized country.25A final related problem for American enterprises facingstiffened international competition was the type of workerneeded to make the adjustments needed to alter productivityrates and enhance enterprise flexibility. The process ofTaylorism had to be reversed.26 This was the process byovertaking of any current American productivity advantage inthe near future. See Marshall, supra, note 3 at 73-80.22 "Productivity Gain Stands", The New York Times, 8March 1990.a Reich, supra, note 2 at 118.24 Reich, supra, note 2 at 118.25 Marshall, supra, note 3 at 73.26 The "scientific management" processes of Frederick W.Taylor. See F.W. Taylor, Scientific Management (1911). Seealso, K. Stone, "Labor and the Corporate Structure: ChangingConceptions and Emerging Possibilities" (1988), 55 U. ChicagoL. Rev. 73 at 143 where she states as follows:Taylorism had an enormous impact on the way peoplein the 20th century have thought about industrialrelations. The radical separation of thinking anddoing that he advocated lies at the heart of the45which workers were systematically de-skilled, where conceptionwas separated from execution, and where production was brokeninto component parts with each worker performing only aportion of the work needed to create a finished product. 27The type of enterprises necessary to compete in today'sinternational economy are those that specialize in highquality goods and rely heavily on the skills of theiremployees in their use of innovative technological systems.Such enterprises merge conception of a job with its executionand the production employee then performs all component tasksin producing the end product. 28In the result, enterprises need employees who will notnecessarily work harder, but, instead, work smarter. This isconsistent with the theme one finds in the labour economicsliterature that suggests "we as a society, and management inparticular, do not utilize well the skills, talents andknowledge of many members of the labour force." 29 Drawingupon the dramatic success of the Japanese economy in the pastquarter-century, such literature posits that many of theeconomic woes, particularly in the areas of productivity andenterprise flexibility, could be successfully dealt with ifconception of the industrial world in which laborand management perform entirely separate functions.27 See Sabel, supra note 6.See, for instance, Sabel, supra, note 6 at 194 etseq..29 Riddell, supra, note 15 at 14.46enterprises made better use of their human resources.mThe Canadian Scene The dependence the Canadian economy has on the health andwell being of the American economy has been welldocumented.31 Canada sends three-quarters of its exports tothe United States and obtains over two-thirds of its importsfrom American suppliers.32 A key stated justification forthe 1987 Free Trade Agreement between the two countries was aperceived need to maintain ready access to Canada's largesttrading partner at a time when protectionist sentiment wasovertaking American legislators.33 Historically, businesscycle downturns faced south of the border sooner or later maketheir way north. If the American economy is in trouble onecan be sure the same sort of trouble is not far behind forCanada.30 See, for instance: Riddel 1, supra, note 15 at 14-15;Marshall, supra, note 3 at 3-7; R. Marshall, "America andJapan: Industrial Relations in a Time of Change" in S.M.Lipset, ed., Unions in Transition: Entering the Second Century(San Francisco, Calif.: Institute for Contemporary Studies,1986) 133.31 For a historical perspective, see, for instance, IanLumsden, ed., Close to the 49th Parallel (Toronto: Universityof Toronto Press, 1970).32 J.A. Finlayson & J.C. Thomas, "The Elements of aCanada-United States Comprehensive Trade Agreement"(unpublished manuscript, 1986) at 1.33 See, for example, Government of Canada, The Canada-U.S. Free Trade Agreement: An Economic Assessment (Ottawa:Supply and Services Canada, 1987) 15.47Over and above the close economic ties between Canada andthe United States, Canada must also compete in the sameinternational marketplace as the United States and has facedall the attendant problems mentioned earlier in reference tothe United States.Canada's productivity growth rates have also been dismal,peaking in the 1947-1956 period at 3.5 per cent, droppingduring the period 1957-1973 to about 2.25 per cent, untilhitting 0.1 per cent in the period 1974-1981. A marginalimprovement to 1.7 per cent occurred in the period 1981-l986. Growth in Canadian gross domestic product in theperiod 1978-1981 averaged just over 13 per cent each year;however, between 1981-1989 growth averaged 7.9 per cent.35Strong concern over the Canada's economic future led tothe Royal Commission on the Economic Union and DevelopmentProspects for Canada (the "Macdonald Commission"). ItsReport, released in 1985, stressed the need for the kind ofeconomic flexibility described earlier in reference to theUnited States.36 Canadian economists have forcefully argued,like many of their American counterparts, that staying abreast34 Riddell, supra, note 15 at 7.British Columbia Ministry of Finance and CorporateRelations, Planning and Statistics Division, EconomicsStatistics Report, 26 September 1990 (Table 1.5, ProvincialGross Domestic Product for Canada and Provinces).36 See, for instance, Report of the Royal Commission onthe Economic Union and Development Prospects for Canada, Vol.II (Ottawa, 1985) 387.48of technological developments holds "the key to improvementsin productivity, global competitiveness, and, ultimately,employment."37 Further, the successful adoption andutilization of new technology is largely dependent on theability of management to develop a more participatory approachto employee-management relationships.38 The Economic Councilof Canada recently stated:[E]qually important for the process of adjustmentis the way in which labour is reallocated withinfirms in response to foreign competition andtechnological change.Effective labour adjustment inside the firmrequires a willingness to move away fromtraditional industrial relations and human-resourcemanagement practices. New approaches to workorganization, labour relations, decision-makingstructures, and management style are essential tosustained improvements in productivity andcompetitiveness.39The Problems Faced by Organized Labour and Workers Adjustments in the economic order, causing plantclosures, lay-offs, demands for concessions from employers,37 Economic Council of Canada, Making Technology Work: Innovation and Jobs in Canada (A Statement by the EconomicCouncil of Canada) (Ottawa: Economic Council of Canada, 1987)at ix.38 Economic Council of Canada, Innovation and Jobs inCanada (Ottawa: Supply and Services Canada, 1987) and R. Long,New Office Information Technology: Human and Managerial Implications (London, U.K.: Routledge, 1987). See also, G.Betcherman, K. Newton & J. Godin, Two Steps Forward: HumanResource Management in a High-Tech World, Economic Council ofCanada (Ottawa: Supply and Services Canada, 1990).39 Economic Council of Canada, Transitions for the 90's (Twenty-Seventh Annual Review) (Ottawa: Minister of Supply andServices, 1990) 53 (emphasis in original).49have dramatic effects on employees. The recession of theearly and mid-1980's provides a classic example. Unemploymentin Canada during the period 1982-1986 reached its highestrecorded levels, averaging almost 11 per cent, compared to thethree to five per cent figures that characterized the periodfrom 1947-1973.4° The monetary policies followed both in theUnited States and Canada to deal with inflation onlyexacerbated, as noted earlier, the unemployment problemrelated to the poor economic performance during thisperiod.°The level of concession bargaining, as noted at theoutset, was the highest it had been since the 1920's and1930's.42 Employers faced with intensified internationalcompetition and out-dated production processes leaned on theirworkers to change protective work rules and to roll back wagesin an effort to provide short-term relief. Even employerswhich did not need concessions during this period tried totake advantage of the opportunity to demand them of theirworkers .°40 Riddell, supra, note 15 at 7.Riddell, supra, note 15 at 7.42 Supra, note 1.43 Cappelli & McKersie, supra, note 1 at 228.^Theauthors report on a 1982 Business Week magazine survey whichfound that 11 per cent of the firms that had asked forconcessions were taking advantage of the then current businessenvironment and did not really need them. Further, theyreport about a union official they interviewed who contendedthat when unions asked firms to document their need for50The ability of workers to resist concessions has beenespecially low in the past decade, particularly in the UnitedStates where the law and its enforcement mechanisms havefailed to provide collective bargaining as a viable defencemechanism for workers." But even in circumstances where thelaw is more supportive of collective bargaining, as inCanada,45 the pervasiveness of the recession, the resultantloss of union members and the fundamental adjustments causedby the recession and the sharpened international competitionhave all added up to an inability on the part of labour,concessions, the incidence of concession negotiations fell offsignificantly, by about two-thirds.44 See, for instance, W. Cooke, Union Organizing andPublic Policy: Failure to Secure First Contracts (Kalamazoo,Mich.: W.E. Upjohn Institute, 1985); J. Rose & G. Chaison,"The State of the Unions: United States and Canada" (1985), 6J. of Labor Research 97; G. Chaison & J. Rose, "ContinentalDivide: The Direction and Fate of North American Unions",Research and Working Paper Series No. 309, Faculty ofBusiness, McMaster University, Hamilton, Ontario, 1988; P.Weiler, "The Representation Gap in the North AmericanWorkplace", Larry Sefton Memorial Lecture, University ofToronto, 22 February 1989; P. Weiler, "Promises to Keep:Securing Workers' Rights to Self Government Under the NationalLabor Relations Act" (1983), 96 Harv. L. Rev. 1769; P.Weiler, "Striking a New Balance: Freedom of Contract and theProspects for Union Representation" (1984), 98 Harv. L. Rev.351; P. Weiler, "Milestone or Tombstone: The Wagner Act atFifty" (1986), 23 Harv. J. on Legislation 1-31; U.S.Congress, The Failure of Labor Law - A Betrayal of American Workers Report of the Subcommittee on Labor-ManagementRelations of the Committee on Education and Labor, UnitedStates House of Representatives (98th Congress) October 1984.45^But one should not be overly sure that Canadarepresents an unassailable bastion for union growth. As PaulWeiler has pointed out, the rate of unionization in Canadaseems to have plateaued in the mid 1980's and has been inslow, but steady, decline since. See Weiler, "TheRepresentation Gap...", supra, Chapter One, note 15 at 8-9.51organized and unorganized, to maintain past gains." Andfurther clouds can be seen on the horizon for organized labourin that the sector of the North American economy growing thefastest, the service sector, has consistently proven to be anextremely difficult sector to organize, resulting ininvariably low rates of unionization in that sector.47 Inaddition, the number of women in the workforce hasdramatically increased in the past two decades. Women havenot been historically drawn to organized labour. Takentogether, organized labour faces a daunting challenge ofincreasing its appeal among these constituencies if it hopesto remain an important force in North American society.Organized labour in North America has been very much onthe defensive and, like employers, they are anxious abouttheir future.4846 P. Kumar & M.L. Coates, "Industrial Relations in 1991:Trends and Emerging Issues" Industrial Relations Centre,Queen's University at Kingston, Kingston, Ontario (1992);M.L. Coates, "Is There a Future for the Canadian LabourMovement?" Current Issues Series 1992-1, Industrial RelationsCentre, Queen's University at Kingston, Kingston, Ontario(1992); D.D. Carter, "Canadian Industrial Relations in theYear 2000: Towards a New Order?" Current Issues Series 1992-2,Industrial Relations Centre, Queen's University at Kingston,Kingston, Ontario (1992).47 N. Meltz, "Labor Movements in Canada and the UnitedStates" in T. Kochan, ed., Challenges and Choices FacingAmerican Labor (Cambridge, Mass.: MIT Press, 1985) 315 at 319-22. See also, P. Weiler, Reconcilable Differences: NewDirections in Canadian Labour Law (Toronto: Carswell, 1980)20-24.48 See, generally: Bluestone and Harrison, supra, note9; W. Huang, ed., Organized Labor at the Crossroads(Kalamazoo, Mich.: W.E. Upjohn Institute, 1989), especially S.52Another problem faced by workers has been the very natureof work in North American enterprises, based as it still oftenis, on Taylorism. Workers today are much more educated thentheir counterparts even 20 years ago, when the concept of"alienation" came into vogue.49 And the high degree ofdemocracy in the political sphere, compared to the relativeabsence of democracy in the workplace, appears to be resultingin a great deal of worker dissatisfaction.50Dealing with the new realityAs can be seen from the above, all parties concernedabout labour relations - employees, employers and unions -Smith, "Bargaining Realities: Responding to a Changing World",at 13 and R. Freeman, "The Changing Status of Unionism Aroundthe World: Some Emerging Patterns", at 111; T. Kochan & M.Piore, "U.S. Industrial Relations in Transition" and L. Price,"Growing Problems for American Workers in InternationalTrade", both in Kochan, supra, note 47 at 1 and 125,respectively; A.F.L.-C.I.O. Committee on the Evolution ofWork, The Changing Situation of Workers and Their Unions (Washington, D.C.: A.F.L.-C.I.O., 1985); A.F.L.-C.I.O.Committee on the Evolution of Work, The Future of Work(Washington, D.C.: A.F.L.-C.I.O., 1983).49 G. Cook Johnson & R. Grey, "Trends in EmployeeAttitudes: Signs of Diminishing Employee Commitment" (1988),15 Canadian Business Rev. 20. This article is based onsurveys conducted by Hay Management Consultants which revealedthat employees in North America are feeling more pressed toperform than they did ten years ago, yet they have fewerrewards available to them and they are less informed aboutwhat is going on in their organizations. This imbalance hascontributed to declining commitment to employers.50 • Richard, G. Mauser & R. Holmes, "What Do WorkersWant? Attitudes Towards Collective Bargaining andParticipation in Management" (1988), 43 RelationsIndustrielles 135.53have, for sometimes divergent reasons, an appetite for change.Employees need work which is interesting and draws upon theirskills and creativity and in which they have a greater say inthe day to day decisions that affect their lives. Recentempirical data confirms the interest workers have incontributing to decisions in the workplace which intimatelyaffect them. 51 Employees also want the economy to be strongin as much as this translates into greater job security. 52Unions also want their members to have job security anda greater say in employer business practices, especially thosewhich will directly affect their membership or the fortunes ofthe union.Employers seek greater competitiveness in today's economythrough increased productivity and a greater ability to adaptto changing environmental pressures.By historical experience, each party may well feelthreatened by the goals of the other parties. Unions andemployees facing employers seeking greater productivity, andemployers facing employees and unions seeking greaterinfluence over the enterprise, have often resulted in bitterRichard, Mauser & Holmes, supra, note 50. See also,G. Adams, Worker Participation in Corporate Decision-Making: Canada's Future?, Queen's Papers in Industrial Relations 1990-3, Industrial Relations Centre, Queen's University atKingston, 1990, at 6-10.52 L.P. Richer, "An Evaluation of Employee InvolvementInitiatives in Canada" Research Essay Series No. 36, Schoolof Industrial Relations, Queen's University at Kingston,Kingston, Ontario (1991).54struggles and confrontation. However, on at least atheoretical level, one can see a certain convergence ofinterests among these disparate parties - all want theirenterprises to prosper so as to provide, at minimum, profits,and consequently, jobs. Advocates of what has been termed theNew Industrial Relations promise that innovations includedunder the umbrella of that phrase will not only deliver onthat agreed upon need, but will also address the specificpressing needs of the parties articulated earlier. In short,these innovations are said to constitute the perfect marriageof the economist's concern for economic growth, thesociologist's concern for healthier workplace relations andpolitical theorist's concern for democratic traditions.At its most basic, the New Industrial Relations (and aswe shall see, few of the innovations included within thatphrase are genuinely "new" to the industrial relations scene)literature asserts that enterprises can become moreproductive, and thus more competitive in the world economy, ifthey are able to tap the knowledge and skills of theiremployees; this is done by facilitating employeeparticipation in the decision-making processes of theworkplace and the enterprise. All the innovations to bediscussed share the common characteristic of encouraging andfacilitating greater employee participation in those decision-making processes.The following catalogue is not exhaustive of the55practices comprising the New Industrial Relations. Thepractices that will be discussed are those which arethreatened most by legal doctrines surrounding collectivebargaining. Thus, the following discussion will leave to oneside such practices as employee stock ownership plans,53variable compensation,54 and employee representatives oncorporate boards of directors.55 A wealth of materials have53^See, for instance: J. Blasi, "The ProductivityRamifications of Union Buyouts" (1989/90), 9 NationalProductivity Review 17 at 17; Rosen, Klein & Young, EmployeeOwnership in America: The Equity Solution (Lexington, Mass.:Lexington Books, 1986); M. Quarry, Employee Ownership andCorporate Performance (Oakland, Calif.: National Center forEmployee Ownership, 1988); National Center for EmployeeOwnership, Performance of Publicly Traded Employee OwnershipCompanies (Arlington, Virginia: N.C.E.O., 1986); New YorkStock Exchange, People and Productivity: A Challenge toCorporate America (New York: N.Y.S.E., 1982); New York StockExchange, Direct Ownership Stock Purchase Plans (New York:N.Y.S.E., 1984); General Accounting Office of the UnitedStates, Employee Stock Ownership Plans: Interim Report on a Survey and Related Economic Trends (Washington, D.C.: G.A.O.,1986); P. Dewe, S. Dunn & R. Richardson, "Employee ShareOption Schemes: Why Workers are Attracted to Them" (1988), 26British Journal of Industrial Relations 1; L. Kelso & M.Adler, The Capitalist Manifesto (New York: Random House,1958); L. Kelso & M. Adler, The New Capitalists (New York:Random House, 1961); L. Kelso & P. Hetter, Two-Factor Theory: The Economics of Reality (New York: Vintage Books, 1967); R.Stern & P. Comstock, Employee Stock Ownership Plans (ESOP's): Benefits for Whom? Background Reports on Current Topics andTrends in Labor-Management Relations No. 23 (Ithaca, N.Y.: NewYork State School of Industrial and Labor Relations, CornellUniversity, 1978); M. Weitzman, The Share Economy: ConqueringStagflation (Cambridge, Mass.: Harvard University Press,1984).54 See, for instance, L. Pawluk, "Variable Compensationin British Columbia" LL.M. Degree Thesis, University ofBritish Columbia, 1990, and references cited therein.55^See, for instance: D. Nightingale, WorkplaceDemocracy: An Inquiry into Employee Participation in CanadianWork Organizations (Toronto: University of Toronto Press,56been published examining the details of these practices andtheir economic ramifications, some of which are referred to inthe accompanying footnotes.OWL and Committees Kochan, Katz and McKersie56 identify three levels atwhich industrial relations systems operate, all of whichaffect each other symbiotically, and all of which haveexperienced a form of transformation in the past decade. Thetop level is where strategic activities take place. It ishere that long-term strategy and policy-making in areas suchas investments and human resources take place, usually through1982) 197 et seq.; U.K. Department of Trade, Report of the Committee of Inquiry on Industrial Democracy (London, U.K.:H.M.S.O., 1977) Cmnd. 6706;^0. Kahn-Fruend, "IndustrialDemocracy" (1977), 6 Industrial L. J. 65;^D.A. Fraser,"Worker Participation in Corporate Government: The U.A.W.-Chrysler Experience" (1982), 58 Chicago-Kent L. Rev. 949-80;T. Kochan & H. Katz, Collective Bargaining and Industrial Relations, 2nd ed. (Homewood, Illinois: Irwin, 1988) 381, 410-14; T.C. De Jager, "The Legal and Policy Implications ofUnion Nominees on the Board of Directors of the BritishColumbia Ferry Corporation", unpublished paper, University ofBritish Columbia Faculty of Law, April, 1984; K. Weyer,"Toward a Structural Account of Union Participation inManagement: The Case of Western Airlines" (1989), 42Industrial and Labor Relations Rev. 600; T. Hammer & R.Stern, "A Yo-Yo Model of Cooperation: Union Participation inManagement at the Rath Packing Company" (1986), 39 Industrialand Labor Relations Rev. 337; D. Jones, "The ProductivityEffects of Worker Directors and Financial Participation byEmployees in the Firm: The Case of the British RetailCooperatives" (1987), 41 Industrial and Labor Relations Rev.79.56 T. Kochan, H. Katz & R. McKersie, The Transformationof American Industrial Relations (New York: Basic Books,1986).57senior management and/or the corporate board of directors.The next level encompasses collective bargaining or personnel-function activities, where strategy decisions are made abouthow the enterprise will relate to the employees as a groupthrough collective bargaining or, in nonunion enterprises,through general personnel policies. At the last level thereare the activities of the day-to-day workplace where matterssuch as job design, work organization and supervisory style isworked out.The economic imperatives discussed earlier have affectedeach of these levels in substantial ways.At the top level, the limited range of possible optionshave compelled enterprises to press for new ways of makingtheir enterprises more profitable and stable in anincreasingly global economy. This has been the impetus forchanges at that highest level, changes which may includeemployee representation on corporate boards of directors. Wehave also noted the greatly increased interest in employeestock ownership and other gain-sharing arrangements.The economic imperatives have also caused enterprises topress for substantial changes in traditional outcomes at thecollective bargaining/personnel functions level. Concession58bargaining is a manifestation of that pressure for change.But the most concerted effort for change has occurred atthe lowest level, on the shop floor, where the organization ofwork, the management and motivation of individuals or workgroups, and the nature of the workplace environment isdetermined. While the effects of decisions at the higherlevels are felt at this lowest level, the activities occurringat this level are not normally directly affected by thegenerality of collective agreement provisions, formalpersonnel policies or broad business strategies.57 Yet it ishere that the most intense attention has been directed overthe past decade, likely spurred on by the success of Japaneseindustrial relations practices in assisting that country'sindustries to the pinnacle of international economic success.Those practices emphasize the importance of joint consultationand workers as a source of knowledge about the processes ofproduction and what can be done to improve those processes.58In the result, the most activity in introducinginnovative industrial relations practices is occurring at thislevel of industrial relations in North America, both in theunionized and nonunion sectors. And the activity at this57 Kochan, Katz & McKersie, supra, note 56 at 18.58 See, for instance, J. Weiler, "The Japanese LabourRelations System: Lessons for Canada", in W.C. Riddell, ed.,Labour-Management Cooperation in Canada (Toronto: U. of T.Press, 1986) 114 (Vol. 15 in the series of studiescommissioned as part of the research program of the RoyalCommission on the Economic Union and Development Prospects forCanada, the "Macdonald Commission")59level has required complimentary adjustment at the top andmiddle levels of enterprise industrial relations systems.The activities at the shop floor level can generally besaid to be directed at improving the quality of workinglife,59 and thereby enterprise performance, through the useof job enrichment/rotation/enlargement, "quality circles",semi-autonomous work groups, quality of working life programs(in its specialized sense), and joint labour-managementcommittees.60 The material that has acted as a catalyst forinnovation in this area has been the strong empirical datafrom case studies indicating that such innovations make astrong contribution to enterprise productivity and59 Thus explaining in some measure that these effortshave often been referred to under the catch-phrase "QWL" (orQuality of Working or Work Life programs). As we shall see,however, it is somewhat of a misnomer to refer to all of theseinnovations as QWL programs, since that phrase now tends tohave a very specialized meaning, referring to particular typeof program within the realm of increased worker participationin the decision-making processes of the enterprise.60 See, for instance: R. Long, "Patterns of WorkplaceInnovation in Canada" (1989), 44 Relations Industrielles 805;J. Cunningham & T. White, eds., Quality of Working Life: Contemporary Cases (Ottawa: Supply and Services Canada, 1984);J. Mansell, Workplace Innovation in Canada: Reflections on thePast...Prospects for the Future Economic Council of CanadaStudy (Ottawa: Minister of Supply and Services, 1987);Kochan, Katz & McKersie, supra, note 56; Kochan & Katz,supra, note 55, Chapter 13 "The Dynamics of Change in Union-Management Relations" 393-421; U.S. Dept. of Labour, Labour-Management Cooperation: 1988 State of the Art Symposium(Washington, D.C.: Department of Labour, Bureau of Labour-Management Relations and Cooperative Programs, 1988) BLMR 124.60efficiency. However, the data is clear that the simpleadoption of one or two of these innovations, in the absence ofa much broader shift in management attitudes, policies, andpractices at higher levels of an enterprise, is unlikely tohave such a positive impact.62Historical Background The details and elements of the above-mentionedinnovations are best understood when discussed in theirhistorical context. Such historical context shows movementand progression in the development of these innovations andthereby provides a fuller picture of the current state ofindustrial relations. Therefore, the following represents ahistorical survey which, in its telling, provides anSee, for instance: Mansell, supra, note 60; H. Katz,Shifting Gears: Changing Labour Relations in the United States Automobile Industry (Cambridge, Mass.: MIT Press, 1985); V.Klotz, "Staff Suggestion Systems" (1988), 127 InternationalLabour Rev. 335 (suggestions made by employees make anappreciable contribution to increased enterprisecompetitiveness); Kochan, Katz & McKersie, supra, note 56;E. Lawler, "Choosing an Involvement Strategy" (1988), 2Academy of Management Executives 197 (the greater the amountof employee involvement in decision-making processes, thegreater the economic pay-offs for the enterprise); K. Newton,"Employee Involvement in Canada: Theory, Practice andProspects", Economic Council of Canada, Pacific Rim LabourPolicy Conference, Vancouver, B.C., June 25-26, 1987; K.Newton, "Quality of Working Life in Canada: A Survey", in W.C.Riddell, ed., Labour-Management Cooperation in Canada(Toronto: U. of T. Press, 1986) 73 (Vol. 15 in the series ofstudies commissioned as part of the research program of theRoyal Commission on the Economic Union and DevelopmentProspects for Canada, the "Macdonald Commission").See, for instance, Long, supra, note 60 at 819;Lawler, supra, note 61.61elaboration on the nature of current innovations.Perhaps the earliest example of efforts to draw upon theknowledge of workers was the process of scientific managementintroduced through the writing and work of Frederick WinslowTaylor.63 At the heart of scientific management was theprocess of transferring the knowledge and skill workers had inthe production process to management through the systematicstudy of the production process," breaking down that processinto its simplest elements through such tools as time motionstudies, and rebuilding the work process in such a way thatmanagement firmly controlled the precise manner in whichworkers performed their work.65 Taylor appreciated that theknowledge of the production process possessed by skilled65 F.W. Taylor, Scientific Management (New York, 1947)(this is a single-volume edition of Taylor's three chiefworks: Shop Management (1903); Principles of ScientificManagement (1911); and Hearings Before the Special Committeeof the House of Representatives to Investigate the Taylor andOther Systems of Shop Management (1912). See also: S. Kakar,Frederick Taylor: A Study in Personality and Innovation(Cambridge, Mass.: 1970); R. Hoxie, Scientific Management andLabour (New York: Appleton & Co., 1915); R. Hoxie,"Scientific Management and Labour Welfare" (1916), 24 J. ofPolitical Economy 837.64 "The managers assume...the burden of gatheringtogether all the traditional knowledge which in the past hasbeen possessed by the workmen and then of classifying,tabulating, and reducing this knowledge to rule, laws, andformulae..." Taylor, The Principles of Scientific Management,supra, note 63 at 36.65 For a detailed description of the deskilling aspectsof Taylorism, see H. Braverman, Labor and Monopoly Capital: The Degradation of Work in the 20th Century (New York: MonthlyReview Press, 1974) 85-138. See also those materials cited innote 63.62workers gave those workers a tremendous amount of discretionand control over that process and, consequently, their day-to-day worklives.66 Taylor was intent on transferring controlto management by systematically separating discretion,knowledge, thinking - in short, control - from the act ofdoing the work.67 Although Taylor argued that application ofhis theories would make enterprises more democratic since workwould be judged in accordance with the "scientific" rules andstandards established through his studies, rather than thecapricious and sometimes arbitrary whim of a foreman.However, there is nothing in scientific management thatresembles more contemporary efforts to increase workerparticipation in the decision-making processes of enterprisesby providing workers with avenues through which they couldcontribute.The next significant development in efforts to gain theassistance and cooperation of employees in the productionprocess came in the form or "employee representation plans."66 D. Montgomery, Workers' Control in America (Cambridge,U.K.: Cambridge University Press, 1979), especially Chapters1 and 2, "Workers' Control of Machine Production in the 19thCentury" and "Immigrant Workers and Managerial Reform".67 "All possible brain work should be removed from theshop and centered in the planning and laying-outdepartment..." Taylor, Shop Management, supra, note 63 at 98-99. See also, Braverman, supra, note 65 at 90-91.68 M. Derber, The American Idea of Industrial Democracy, 1865-1965 (Urbana, Illinois: University of Illinois Press,1970) 208-09. See also, Hoxie, Scientific Management and Labour, supra, note 63 at 140-41.63The history of such plans, and their metamorphosis intocompany (or employer-dominated) unions, will be discussed ingreater detail in the next chapter dealing with the history ofcentral collective bargaining legal doctrines. That historybears some mention here in order to fully appreciate morecontemporary developments in QWL.Although there were sporadic experiments with workercommittees and representation plans at the turn of thecentury,69 it was not until the labour shortage crisis ofWorld War 1,70 the increased level of labour unrestimmediately after the War,71 and the consequential adoptionof government labour policies encouraging representation plangrowth,72 that such a form of non-union representation beganto be widely practised. The number of such plans in operation69 See, for instance, Derber, supra, note 68 at 206-19.70 S. Slichter, "The Current Labour Policies of AmericanIndustries" (1929), 43 Quarterly J. of Economics 393 at 395-96.See, for example, D. Bercuson, Confrontation atWinnipeg: Labour, Industrial Relations and the General Strike (Montreal: McGill-Queen's University Press, 1974).72 In Canada the 1919 Royal Commission on IndustrialRelations appointed by the federal government noted in itsreport that "there is an urgent necessity for greater co-operation between employer and employed" and recommended thatjoint industrial councils and works committees be set up as ameans of achieving labour-management cooperation. See W.D.Wood, "The Current Status of Labour-Management Co-operation inCanada", Industrial Relations Centre Research Series No. 3,Queen's University at Kingston, 1964 at 10-13. In the UnitedStates, during World War I, the National War Labour Boardfostered the creation of employee-representation plans in non-union enterprises. See Derber, supra, note 68 at 213-14.64in the United States increased by 600 per cent between 1919and 1926 and covered over 1.1 million workers.m The 1920'swere characterized by the rapid decline in trade unionfortunes74 and increased employer enthusiasm for a form ofemployee representation that would tap employees' desires fororganization, but would displace unionism with a lessthreatening substitute. Representation plans filled the need.Such plans also helped enterprise efficiency and this themecan be seen to this day in explaining why employers have beeninterested in means to gain employee cooperation. Describingdevelopments at that time, Sumner Slichter neatly summarizedthe position in a 1929 article:Possibly the most important determinantof post-war labour policies, at leastduring the last four or five years, hasbeen the growing realization by managersof the close relationship betweenindustrial morale and efficiency. Whenthe severe drop in prices and in salesduring 1920 and 1921 caused managers tosearch meticulously for methods ofcutting costs and of increasing sales,many ways were found in which the workerscould help if they would. Spurred byfinancial necessity, managers sought theaid of their employees to anunprecedented extent...Some concerns,such as Bethlehem Steel Corporation andm^National Industrial Conference Board, CollectiveBargaining Through Employee Representation (New York:N.I.C.B., 1929) 12. See also, Derber, supra, note 68 at 214.74 See, for example: S. Jamieson, Times of Trouble: Labour Unrest and Industrial Conflict in Canada, 1900-66 StudyNumber 22 for the [Woods'] Task Force on Labour Relations(Ottawa: Supply and Services Canada, 1968) 192-97; and I.Bernstein, The Lean Years: A History of the American Worker, 1920-1933 (Boston: Houghton Mifflin, 1960) 83-143.65the International Harvester Company, haveused their shop committees to reducecosts. The committees have suggestedways of saving labour and materials...andthey have assisted in raising the qualityof workmanship...Of course, the efforts ofmanagements to reduce costs and increasesales by persuading wage earners to goout of their way to help would not havepersisted had the results not beensatisfactory. But the workers respondedto appeals for their help with almoststartling generosity. And naturally thisresponse has profoundly affected thelabour policies of employers. The moreplainly the workers have demonstrated thevalue of their cooperation, the greaterhas become the interest of managers inlabour's good will. During the war, andto a great extent during the post-wardepression, managers sought labour's goodwill largely in order to avoid labourtrouble. As the fear of strikes hasdiminished and as labour has demonstratedits willingness to cooperate, the desirefor labour's help has become the mostimportant single influence moulding thelabour policies of American employers.75Interestingly, the blue-print for representation plans,both in the United States and Canada, was developed by WilliamLyon Mackenzie King, the future and somewhat anti-unionmPrime Minister, in his work as a labour relations consultantfor the Rockefeller-owned Colorado Fuel and Iron Company.nThe plans varied in their details from establishment to75 Slichter, supra, note 70 at 401-404 (emphasis inoriginal).R. Adams, "North American Industrial Relations:Divergent Trends in Canada and the United States", Researchand Working Papers Series No. 307, Faculty of Business,McMaster University, Hamilton, Ontario, at 20.Derber, supra, note 68 at 212-14.66establishment, but there were a number of key commoncharacteristics.Their purpose was two-fold. First, they were intended toimprove communication and understanding between employees andtheir employer.78 The committees consisted of employerrepresentatives and employees who were sometimes selected bythe other employees or, more often, indirectly chosen bymanagement, because of the qualifications management placed oncommittee membership, to represent employees. Their topics ofdiscussion were generally broad, ranging from health andsafety to mere housekeeping issues such as cleanliness of theproduction area, and from personnel matters, to reducing costsand making the enterprise more efficient.79 The other, lesscommonly acted upon purpose of these committees orrepresentation plans was to provide a forum through whichemployee grievances could be considered and a conclusionrecommended. 80The characteristic common to seemingly all representationplans and committees of this era was their lack of power."More often than not, the employee representatives were giventhe opportunity only to express their views, while the final78 Wood, supra, note 72 at 10.79^See, for instance, C. Gold, Employer-EmployeeCommittees and Worker Participation Key Issues Series No. 20(Ithaca, N.Y.: New York State School of Industrial and LabourRelations, Cornell University, 1976) 15-18.80 Slichter, supra, note 70 at 413.67decision remained with management."m Further, employeemembers were reluctant to take a stand on any particular issuebefore the committees because of the distinct possibility ofemployer-reprisals.82 This latter characteristic was lessprevalent in unionized enterprises where committees operatedsince the union acted as a countervailing force.83In short, the amount of influence employees had over thedecision-making process through such committees or plansdepended entirely upon the good will of the employer.Nonetheless, the committees and representation plans "exposedemployees, often for the first time, to a collectivediscussion of a wide range of issues, including wages, hours,and employment conditions, grievances and complaints, problemsof production and waste, and activities having to do with bothin-plant and out-of-plant life." 84 It was hoped by those whobelieved collective bargaining through trade unions was theonly feasible means by which employees could influence thedecision-making processes of enterprises, that this exposureto participation, and its inherent limits, would encourage thedrive to unionization. In fact, encouraging unionization wasan express purpose for the support given to representationDerber, supra, note 68 at 266.Gold, supra, note 79 at 15-16.83 Gold, supra, note 79 at 16.84 Derber, supra, note 68 at 266.68plans by the American National War Labor Board.88Despite the lack of power given employees throughrepresentation plans and other humanistic innovations used byemployers during the period of welfare capitalism in the1920's, these policies appeared to be working in the sense ofsatisfying many employees and making the enterprises moreefficient. Some historians have suggested that, but for thehavoc racked by the Great Depression, which made it impossiblefor employers to continue many of the popular practices ofwelfare capitalism, such policies could have continued andwould have remained a strong substitute, and perhaps permanentantidote, to unions. 86 But the accepted wisdom of labourhistorians about that period is stated by Irving Bernstein asfollows:The central- avoidanceachievedpaternalismthe maingovernmentpoliticalsuffrage 87purpose of welfare capitalismof trade unionism - could beonly temporarily becausefailed to come to grips withissue: a system of shopplaced in the climate ofdemocracy and universalAs the above suggests, the 1930's were not a time ofgreat innovation in the use of joint committees. It was notGold, supra, note 79 at 15, and Derber, supra, note68 at 213.86 D. Brody, "The Rise and Decline of Welfare Capitalism"in D. Brody, Workers in Industrial America (New York: OxfordUniversity Press, 1980) 48, especially 78, and D. Nelson, "TheCompany Union Movement, 1900-37: A Reexamination" (1982), 56Business History Rev. 335.87 Bernstein, supra, note 74 at 187.69until World War II that they again rose in popularity, buttheir focus was primarily ensuring that production wasmaintained at the highest of levels to support the wareffort. in the United States and Canada, most of thecommittees that enjoyed war-time resurgence died shortly afterthe war ended.89This can partly be explained in the United States by thevigilant post-war enforcement of the 1935 National LabourRelations Act, which encouraged independent unions byoutlawing employer-dominated labour organizations."Canadian jurisdictions also enacted laws more encouraging forindependent trade union development.91But another explanation, both in Canada and the UnitedStates, lies in the reasons why employers tend, then as now,to be initially attracted to such innovations.With some exceptions, an employer's primary motivation iseconomic and it is most pronounced when the employer is facinga business crisis; if such innovations will assist thebusiness outlook for the enterprise, then employers will trym Wood, supra, note 72 at 13-15, and Gold, supra, note79 at 17-18.89 Wood, supra, note 72 at 14, and Gold, supra, note 79at 18.90 National Labour Relations Act, 29 U.S.C. paras. 151-168, ss. 2(5), 8(a)(2). See, for instance, R. Gorman, BasicText on Labour Law: Unionization and Collective Bargaining(St. Paul, Minn.: West, 1976) 195 et seq.91 See, for example, Wartime Labour Relations Regulations (1944), P.C. 1003.70them. But such employer efforts are seldom rooted in any kindof philosophical commitment to a process of democratizingbusiness enterprises. If innovations enhance the economicprospects of an enterprise, employers will generally not beadverse to them, even if such innovations also incidentallyafford employees more of a role in the decision-makingprocesses of the enterprise. However, as the late 1940's and1950's illustrate, once the economic imperatives are lesspressing, employers are less interested in processes whichenhance employee participation in enterprise decision-making.Since virtually all joint committee activity was initiated bythe employer in the relationship, the withdrawal of employerenthusiasm for such efforts would inevitably mark the demiseof the committee. And this appears to be what happened in thelate 1940's and 1950's. There was very little in the post-warera to encourage employer support for innovative employeeparticipation strategies.It was not until the late 1960's and early 1970's that anew wave of cooperative ventures began to develop.During the 1960's and early 1970's new concerns arose foremployers and unions about aspects of work which were"alienating" or "dehumanizing" for the worker.92 Suchphrases to describe the nature of work in the mid-20th century92 See, for instance, Canada, Canadian Industrial Relations: Report of Task Force on Labour Relations (Ottawa:Privy Council Office, 1968) (H.D. Woods, Chairman) at 97-101and 121.71came mostly from social scientists, many of whom had becomeparticularly concerned during this period about the workplaceas a social institution and the effects of Tayloristproduction methods on human development.93 From the work ofHerzberg" and Likert,95 to the wide-ranging studies for theUnited States Department of Health, Education and Welfare,96social scientists and managerial theorists were stepping upthe march to fill the gap in Taylor's work regarding workers'psychological needs and motivation.97 Bok and Dunlop sum upthis development well, with an indication of why employers93 A good description of the move to social scientistsby "progressive" employers can be found in D. Bok & J. Dunlop,Labor and the American Community (New York: Simon & Schuster,1970) 354-57.94 F. Herzberg, B. Mausner & B. Snyderman, The Motivationto Work (New York: Wiley, 1959); F. Herzberg et al., JobAttitudes: Review of Research and Opinion (Pittsburgh, Penn.:Psychological Service of Pittsburgh, 1957).95 R. Likert, The Human Organization (New York: McGrawHill, 1967).96 United States Department of Health, Education andWelfare, Work in America: Report of a Special Taskforce to theSecretary of Health, Education and Welfare (Cambridge, Mass.:MIT Press, 1973) and the studies and reported referred totherein.97 See, for instance: P. Blumberg, "Alienation andParticipation: A Review of the Literature" in P. Blumberg,Industrial Democracy: The Sociology of Participation (NewYork: Schocken Books, 1968) 70; V. Vroom, Work and Motivation(New York: Wiley, 1964); A. Rubenstein & C. Haberstroh, eds.,Some Theories of Organization (Homewood, Illinois: Irwin,1960); R. Sutermeister, ed., People and Productivity (NewYork: McGraw-Hill, 1963); H. Guetzkow, ed., Groups, Leadership and Men (New York: Russell & Russell, 1963); and,F. Wickert, "Turnover and Employees' Feelings of EgoInvolvement in the Day-to-Day Operations of a Company" (1951),4 Personnel Psychology 185.72became interested in such work:As time went on, it grew increasinglyclear that Taylor's principles often wentawry because they failed to take adequateaccount of the psychological and groupreactions of employees. In silentprotest against the system, workers setinformal production norms far below theirreal potential. If only to relieve thetedium of work, they invented all mannerof artful dodges to befuddle the companyengineer into setting easier quotas ontheir jobs. They were absent too oftenfrom work; they quit too frequently forother jobs; they were involved in toomany accidents and unwittingly broke toomany tools. In the face of thesedifficulties, research teams were calledin by many of the more progressivecompanies. As these investigators gotmore deeply into the problem, they beganto discover a whole battery of desiresand discontents that colored the attitudeof workers towards their jobs. 98In the result, the shape of workplace innovation began tochange. Joint committees remained a staple element inrelations on the shop floor. But their focus widened beyondpurely production issues, which had been their focus duringthe World War II era, and they began to resemble the types ofcommittees found during the height of welfare capitalismduring the 1920's. Their purpose became more to facilitateopen communication between employees and employers as a meansof creating a more satisfied workforce.Like those committees in the 1920's, their reincarnationin the late 1960's and early 1970 dealt with a wide range ofissues, with employers hoping this would resolve moraleBok & Dunlop, supra, note 93 at 355.73problems they now believed were at the root of their labourrelations problems. And like the 1920's, the use ofcommittees seldom involved any significant transfer ofdecision-making power from employers to employees. 99 Thislack of committee authority has continued to characterize suchcommittees and tends to be listed most often by employees whenasked about their committee experience. Nevertheless,many parties involved with such committees tended to speakpositively of their experiences with them, stating thatcommittees enabled them to understand each other better, todeal more directly with problems before they fester and grow,and to pool their information and expertise in tacklingdifficult issues. 101But such committees only went so far in dealing with theproblems identified by the social scientists. These problemsrelated specifically to the tasks workers were obliged toperform in their day-to-day work. Taylorism had rendered taskperformance a mundane, routine and limited function, leadingto a demoralized workforce. Better communication systems99 Mansell, supra, note 60 at 4-5;^J. Mansell, R.Wilkinson & A. Musgrave, An Inventory of Innovative WorkArrangements in Ontario (Toronto: Ontario Ministry of Labour,1978); T. White, Human Resource Management: Changing Times inAlberta (Edmonton: Alberta Ministry of Labour, 1979).loo L. Darby, Labour Management Cooperation: A Study ofLabour-Management Committees in Canada School of IndustrialRelations Research Essay Series No. 3 (Kingston: IndustrialRelations Centre, Queen's University at Kingston, 1986) 39-40.101 Mansell, supra, note 60 at 5; Cunningham & White,supra, note 60 at 307-55.74within an enterprise had inherent limits in dealing withproblems of this sort. Reform was needed in the specifictasks employees were to perform in their day-to-day workexperience.The answer many enterprises responded with as asupplement to committees was job redesign or "enrichment",either through job rotation or job enlargement.102 Suchefforts at task-redesign generally came at the direction ofmanagement with little employee participation in the mechanicsof the redesign process.103 The basic thrust of such jobenrichment programs was to increase the number of tasksemployees performed in one of two ways. Employees may berotated into different jobs at regular intervals.1"Alternatively, the number of tasks that an employee wouldperform in their current position would be increased so as toperform a production process from beginning to end instead ofonly a piece of the production process.105Although these efforts in the late 1960's and early1970's had some positive impact on the individual firms usingthem, they neither diffused across the economy, nor dealt withthe tougher competitive issues facing North Americanenterprises towards the end of the 1970's and into the early102 Mansell, supra, note 60 at 3-4.103 Mansell, supra, note 60 at 3.104 Mansell, supra, note 60 at 3-4.105 Mansell, supra, note 60 at 3-4.75and mid-1980's. The lack of diffusion can perhaps beexplained by the response seasoned industrial relationspractitioners gave to "humanistic" social scienceperspectives; it was not uncommon for them to regard withgreat scepticism the contribution social science research andanalysis could make to their enterprise when they were simplyaimed at making work more pleasant for workers. 106 And theproblems faced by North American enterprises, as described indetail above, 107 were becoming too much to be dealt with byway of the relative minor adjustments these innovationsrepresented. 108Now enterprises were not only looking for ways to makeindividual job holders more satisfied in their work; theywere looking for ways to make the total organization more106 See, for instance, Kochan & Katz, supra, note 55 at403-404.107 Supra, text accompanying notes 1 to 39.108 See, for instance, Mansell, supra, note 60 at 5-6.76effective overall and more competitive in the challenginginternational economic order.109 And it was cleartechnological change would have to be a major element of themodifications required."° Mansell states the situation atthe end of the 1970's in the following manner:It was becoming obvious, from both theory andpractice, that approaches focusing on the singlejob and limited primarily to the shop or officefloor could not deal with the more seriouschallenges of the 1980's. Managers also realizedthey would need more than "satisfied" employees inorder to achieve the more fundamental technologicaland organizational changes required. They knewthat change would be extremely difficult, if notimpossible, unless all employees, management andnon-management, were willing and able to be openand flexible. By the mid-1970's, one of the keythings that had been learned from both European andNorth American experience with organizationalchange was that active participation is one of themost effective ways of overcoming resistance tochange. In addition, many managers also realized(admittedly, aided by a popular fascination withJapanese management techniques) that the chances offinding workable solutions to many organizationalproblems would be greater if the experience andexpertise resident at all levels of theorganization could be drawn upon.111In the result, the emphasis began to expand in workplaceinnovations from identifying and addressing employee concernsand humanizing work, to learning what employees at all levelscould teach the enterprise about making the enterprise better,and to including employees at all levels in the process oftechnological and organizational change that enterprises were109 Kochan & Katz, supra, note 55 at 404.110 Mansell, supra, note 60 at 6.Mansell, supra, note 60 at 6 (footnotes omitted).77called upon to make in the new environment. In a sense, thefundamental problems faced by North American industries in the1980's brought about a unprecedented marriage of ideas betweensocial science theories about organizational behaviour andeffectiveness, and the prescriptions offered by economists andbusiness leaders for reform within enterprises and industriesif North American industry were to flourish in the newinternational economic order.112 Whereas before, asmentioned above, there was a great deal of scepticism aboutwhat contribution humanist social scientist could offer theeconomist and business leader dealing with major economicchallenges, an intellectual reorientation was occurring whichbrought together these formerly disparate groups.113Employers began to appreciate that if they hoped to deal withthe economic challenges, they would need to provide socialscientists a wider berth than was represented by, forinstance, job enrichment.This reorientation has led to the type of shop-floorinnovations being attempted today, innovations which stress112 See, for instance, K. Newton, "Employee Involvementin Canada: Theory, Practice, and Prospects" Pacific RimLabour Policy Conference, Vancouver, British Columbia, June25-26, 1987, at 4 et seq.113 See, for instance, K. Newton, "Quality of WorkingLife in Canada: A Survey" in W.C. Riddell, ed., Labour-Management Cooperation in Canada (Toronto: U. of T. Press,1986) 73 (Vol. 15 in the series of studies commissioned aspart of the research program of the Royal Commission on theEconomic Union and Development Prospects for Canada, the"Macdonald Commission").78more than ever before the participation of employees in thedecision-making processes of the enterprise. Mansell puts thematter this way:Given the concerns being expressed by management,labour and government..., [increased employeeparticipation] is a logical extension of thecommunications- oriented joint committee approachcommon in the 1960's and early 1970's. Managementclearly wanted more than purely "motivational"approaches to productivity. They were anxious todeal directly with productivity and product qualityissues on the shop-floor and were, therefore,fascinated by the Japanese experience with qualitycircles ... Management also saw participation as away to get more worker support for necessarychanges in both technology and work methods.114What has resulted is an array of innovations, all fallingunder the rubric of Quality of Working Life Programs(hereafter "QWL"). They can be categorized into two groups;one is a new set of structures for increased union and/oremployee participation in the decision-making processes of theenterprise; the other is what is referred to as the "socio-technical systems" approach to job and organizational designand redesign.115 The former group is characterized byquality control circles, or quality circles (hereafter"QC's"), and similar types of joint employer-employeecommittee structures. The latter is most commonlycharacterized by the establishment of semi-autonomous or self-regulating work groups. The common thread through them all isthe aim of increasing both the organization's effectiveness114 Mansell, supra, note 60 at 7 (notes omitted).115 Mansell, supra, note 60 at 7-19.79and the satisfaction employees obtain from their work.QC's have been a particularly popular development. 116As practised in Japan, QC's are informal forums for discussionin which eight or ten employees, together with the relevantsupervisor, meet regularly and make suggestions for improvingthe organization of work, the production process, the productline, the work area and such matters.117 Although employersare not bound to follow these suggestions, there is anincentive to do so, if only to keep the process credible.They have been credited with increasing productivity,efficiency and profitability, as well as improving the qualityof life for employees in the workplace.118By far the most popular participatory structure continuesto be the joint labour-management committee. A recent studydetermined that such committees were the most commoninnovation among a list including QC's, semi-autonomous work116 Long, supra, note 60 at 816, where the author statesas follows:Clearly, the innovation enjoying the mostdramatic surge in popularity has beenquality circles. Virtually unknown inNorth America prior to 1970, they wereimplemented at an astonishing rate during1982-85. Virtually all (92%) wereintroduced during the last six years.See also, E. Lawler & S. Mohrman, "Quality Circles After theFad" [Jan.-Feb. 1985] Harvard Business Rev. 65, where theauthors report that over 90 per cent of the Fortune 500companies in the United States then had some form of QCprogram.117 Riddell, supra, note 15 at 22, and Weiler, supra,note 58 at 137-39.118 Weiler, supra, note 58 at 138.80groups, profit-sharing and pay-for-knowledge.119 More thanhalf their number were established between 1979 and 1985.120Most committee-based participatory structures operate asa two-tiered system with one establishment-wide "steering1committee" and one or more area-level committee. 21 Thesteering committee is usually composed of several seniormanagers and either the local union executive or, in nonunionsettings, elected or management-appointed employeerepresentatives. Normally, the role of the steering committeeis to oversee the operations of the area-level committees andto deal with establishment-wide issues. The area levelcommittees are almost always voluntary in the sense that noarea is required to have a committee and no individual, exceptarea management, is required to participate. Most area levelcommittees deal primarily with issues related to immediateworking conditions and productivity. Committees establishedby consensus what their recommendations to management will be.Two features of such committees are of particularimportance. First, committees in unionized enterprises arecommonly limited in the topics which they can consider.119 Long, supra, note 60.120 Long, supra, note 60 at 816.121^Descriptions of the committee structures andoperation is drawn from Mansell, supra, note 60, Gold, supra,note 79, Darby, supra, note 100, and C. Gold, Labor-ManagementCommittees: Confrontation, Cooptation or Cooperation? (Ithaca,N.Y.: ILR Press, Cornell University, 1986).81Matters normally dealt with in collective bargaining ormatters already dealt with in the collective agreement areconsidered out of bounds for committee discussion, as areissues related to corporate policy and basic managementsystems. Second, committees are normally advisory in natureand thus have no formal decision-making authority. Managementis generally free to reject committee recommendations.The other group of innovations fall under the umbrella ofthe socio-technical systems (hereafter, "STS") approach toworkplace organization. The STS approach seeks to enhance anenterprise's performance by focusing on the symbioticrelationship between organizational structure/technology, andthe characteristics and attitudes of workers and managers.The STS approach aims at letting the physiological,psychological and cultural characteristics of workers andmanagers shape the organizational structure and technologyused and, in turn, use organizational structures andtechnology in the workplace to help shape the attitudes,motivation and commitment of managers and workers so as toenhance the enterprise's effectiveness. Effectiveness isgenerally judged by productivity and profitability which issaid to be enhanced when workers are highly motivated andcommitted to the product's quality and the enterprise, resultswhich occur with use of an STS approach.STS programs generally consists of two broad strategies:"sociotechnical design" of jobs and work organization, and82"industrial democracy" in the sense of affording employees ashare in the decisions which are taken concerning the processof production.122 Sociotechnical design describes designingjobs so as to meet not only the material needs of theenterprise (for instance, having pieces of material assembledto produce a commodity), but also providing workers with: (i)an opportunity to exercise a variety of skills; (ii) controlof the work flow; (iii) an ability to identify with theproduct of their labour by involvement in all aspects of itsproduction; and (iv) an opportunity to assume greaterresponsibility for their work.123The theoretical foundation of STS is that, for anorganization to be optimally effective, not only do both thetechnical and social subsystems each have to be effective inand of themselves, but, more importantly, they must be co-designed to fit together in such a way as to accommodate andsupport each other. Technological determinism, in whichlabour must meet the pace and job design established by thetechnology used, is to be abandoned. The second major aspectof STS approaches, industrial democracy, is aimed at providingworkers with the opportunity to participate in decisionsaffecting the production process. This aspect of STSmanifests itself ultimately in semi-autonomous work groups122 Newton, "Quality of Working Life...", supra, note 61at 74-76.123 Newton, supra, note 61 at 76.83which generally makes traditional hierarchical manager roleson the shop-floor nonexistent. 124 Semi-autonomous workgroups are considered "the basic building block of the socio-technical systems approach."125Mansell describes semi-autonomous groups in the followingmanner:These groups are teams of workers whohave collective responsibility for anatural, whole unit of work. The teamsare self-regulating in that they exerciseconsiderable autonomy in planning,integrating, executing, and monitoringthe set of interdependent tasks withintheir work unit. As semi-autonomousgroups mature, they also take on some ofthe support functions (e.g., maintenance,financial control, personnel, etc.)required for the functioning of theirunit. Most workers in such groups do nothave separate job assignments orclassifications. Ideally, all workers inthe group are multi-skilled and canperform all the tasks within the workunit....The semi-autonomous work group is apowerful innovation because of theconcepts of group responsibility andself-regulation. The group orientationallows for more variety, enhancedopportunities for learning, and socialsupport - all in relation to aninherently meaningful, whole piece ofwork. However, the group orientationalso greatly increases the flexibilityand problem-solving capacities of theorganization. Similarly, self-regulationmeans not only that the wide range ofproblems that always occur in a worksystem can be controlled more directlyand quickly, but also that it providesfor greater worker dignity and124 Long, supra, note 60 and Newton, supra, note 61.125 Mansell, note 60 at 12.84organizational democracy....As a total systems approach, thesocio-technical systems (or "socio-tech")approach demands that both the primarywork system and all support systems bedesigned according to the same values andgoals. Therefore, in a socio-tech designall of the "management systems" (such asfinance, engineering, personnel,industrial relations, etc.) must bedesigned to support the characteristicsof the semi-autonomous work groups.126The most commonly cited example of semi-autonomous workgroups in operation is at a Shell Chemical manufacturing plantin Sarnia, Ontario.127 The plant operates continuously as asingle operating department by teams made up of 19 to 21people. Each team is responsible for its own work assignment,technical training, overtime authorization and scheduling, andvacation scheduling. Management's interests are representedon each team by a co-ordinator, as opposed to a supervisor,who acts as a resource person and facilitator for the team.Co-ordinators are often bargaining unit members, on thepremise that management's interests and those of the team arenot substantially opposed. 128 Teams interview and hire newmembers from a short-list provided by management. The teams126 Mansell, supra, note 60 at 13.127^Mansell, supra, note 60 at 14-16; L. Davis & C.Sullivan, "A Labour Management Contract and Quality of WorkLife" (1980), 1 Occupational Behaviour 29; N. Halpern,"Sociotechnical Systems Design: The Shell Sarnia Experience"in J. Cunningham & T. White, Quality of Working Life: Contemporary Cases (Ottawa: Supply and Services Canada, 1984)31; C. Heckscher, The New Unionism: Employee Involvement inthe Changing Corporation (New York: Basic Books, 1988) 138-46.128 Kochan & Katz, supra, note 55 at 407.85also play a large role in the selection of co-ordinators. Themanagement systems at the plant have also been designed tosupport self-regulation. For example, one whole level ofmanagement has been removed. The workers at Shell Chemical inSarnia are represented by a strong union whose cooperation andparticipation in the process has been integral to its success.For instance, to maximize the flexibility of the operations,the governing collective agreement between Shell Chemicalsspecifies only the absolute minimum and a framework and a setof guidelines for the employees to work within. Negotiationsand discussions between management and the union are on-going,not centred around bargaining over renewal of a collectiveagreement every few years.As can be seen from this outline of the STS approach andresulting semi-autonomous work teams, such methods representa radical departure from the hierarchical structure of mostworkplaces. Workers become an integral part of the process bywhich decisions are made not only in the day-to-day operationof the facility, but in governing their own work relationshipwith the enterprise. The role of the union is also greatlyaltered from that of a reactive representative to a pro-activeparticipant in the operations of the enterprise. Thefundamental nature of the changes brought about by use of STSapproaches is not lost on its proponents. As Mansell hasstated: u[tjhesocio-technical systems approach challenges notonly basic union and management power structures, but also the86very definition of what it means to manage or to representworkers."129 With a significant increase in the popularityof such an approach since 1979, the strong survival rate forsemi-autonomous work groups,13° and the economic success ofenterprises using them,131 the challenges presented are noteasily dismissed as mere fancy.But semi-autonomous work groups are to be contrasted withthe other forms of direct worker participation in thedecision-making processes of the workplace, such as QC's orjoint labour-management committees. These other forms ofdirect participation can be characterized by the distinct lackof decision-making authority workers possess through theiroperation. In unionized enterprises, they are alsocharacterized by the way in which the parties have gone togreat lengths to ensure these parallel participatory schemesremain just that - parallel. In other words, they are not todeal with matters that are the subject of the collectivebargaining agreement or in subject areas dealt with by thoseagreements.Some good reasons can be put forward explaining why thesecharacteristics are necessary. For instance, regarding the129 Mansell, supra, note 60 at 13.no Long, supra, note 60 at 816.131^A. Eaton & P. Voos, "Unions and ContemporaryInnovations in Work Organization, Compensation and EmployeeInvolvement" in L. Mishel & P. Voos, eds. Unions and EconomicCompetitiveness (Armonk, N.Y.: M.E. Sharpe, 1992) 173.87separation of these innovations from collective bargaining, ina collective bargaining relationship, a union does not want tobe faced with individuals in the bargaining unit, throughtheir activities in a QC or joint committee, altering in apiece-meal and an uncoordinated fashion the collectiveagreement terms the union has often fought hard to obtain.Thus, as a condition of the union's support for the managementinitiative of QC's or joint committees, the parties agree thatthese innovations will operate outside of the collectivebargaining structure. And regarding the lack of decision-making power of QC's and joint committees, employers areultimately responsible for the enterprises and they want someassurances that at the end of the day they will be able totake the course of action they believe is in the bestinterests of the company, whether or not the QC or jointcommittee agrees with that course.However, it is clear from the literature that such limitsnot only threaten the longevity of these workplaceinnovations, but they also substantially detract from thebenefits enterprises can obtain from them. It is cogentlyargued that the competitive advantages these innovations aresupposed to bring to enterprises will not be forthcomingunless the subject areas these innovative bodies can touchupon are broadly defined, and unless they are empowered tomake more than recommendations that may or may not befollowed.88It seems clear that one of the main reasons innovationslike joint committees and QC's have been popular with manyemployers is that they do not pose a threat to the powerstructures of the enterprise. 132 With only a power torecommend action, and only a mandate to deal with matters ina circumscribed area away from corporate policy and basicmanagement systems, the employer is not faced with having tomake any fundamental shifts that it does not agree withwholeheartedly.However, an essential problem with this approach is thatthe joint committee or QC will soon become frustrated with thelack of impact they are having. "With unclear or minimalauthority to effect change, the labour-management committee[or QC] risks being labelled as a time consuming, unproductivepretence of cooperation." 133 This is a serious concern inthat study after study has articulated the lack of power insuch committees or QC's as being the primary drawback of theinnovation for employees who participate. 134 The inevitableresult of an innovation being labelled in this way is itsearly demise, either by employee apathy or formal withdrawal132 Mansell, supra, note 60 at 11.133 Darby, supra, note 100 at 40.134 See, for instance: Darby, supra, note 100, especiallyat 36-40; Lawler & Morhman, supra, note 116; C. Gold,"Labour-Management Committees: Confrontation, Cooptation orCooperation" Key Issues Series Number 29, New York StateSchool of Industrial and Labour Relations (Ithaca, N.Y.: ILRPress, 1986) 22; Mansell, supra, note 60 at 4-5; Mansell,Wilkinson & Musgrave, supra, note 99; White, supra, note 99.89by the relevant union, if any.An equally fundamental problem for joint committees andQC's, and having the same inevitable result, is their limitedmandate. Innovation programs which are circumscribed in thetopics they can deal or in the areas of the enterprise'soperations that are open for consideration, have a generaltendency to sooner or later "plateau-out". 135 After aninitial flurry of joint committees or QC activity,participants soon hit a wall established by the parameters ofthe program beyond which they cannot deal with. They findthey have dealt with all the pressing considerations in theirphysical area and they cannot go further to deal with theenterprise as a whole or deeper strategic issues of theenterprise. In addition, or alternatively, they run into thewall established by the premise that they are not to deal withmatters normally the subject of collective bargaining. Anysort of limit will create frustration, but such a limit inthis context is particularly problematic because of thephenomenon of an increased desire among employees forparticipation once the participation process begins. Thefrustration is further heightened by the artificial nature ofsubject-matter limitations. The natural tendency ofcommittees or QC's is to deal with the problems they perceive,whether or not they had been previously addressed incollective bargaining. Since collective bargaining tends to135 Mansell, supra, note 60 at 11-12.90deal with the most serious problems in the relationshipbetween management and employees, these are likely going to beproblems that participatory program participants will alsowant to consider.Thus, it should come as no surprise that the cases wherecommittees have flourished and have made for a more satisfiedworkforce have been those where the distinction betweencollective bargaining and the processes of these innovationshave been blurred, whether intentionally or inadvertently. 136The failure to effectively deal with these problems oflimits on worker participation processes will likely lead totheir marginalization and eventual death.Examining these problems and examples of failedinnovations, a few vital prerequisites become apparent for thesurvival of individual innovations and the overall success ofusing these innovative industrial relations practices toenhance the economic position of the enterprise.First and foremost, the more closely joint committees andQC's come to resemble semi-autonomous work groups, the morelikely the enterprise will experience the type of productquality and productivity increases that have been the promise136 W. Moore & R. Miljus, "Integration of CollectiveBargaining and Formal Worker Participation Processes: Boon orBarrier to Worker Rights" (1989), 2 Employee Responsibilitiesand Rights Journal 217.91of the New Industrial Relations.137 In other words,management must be willing to give up part of its power inrunning the enterprise, whether it be by actually giving fullauthority to the participatory bodies, or, alternatively, bymaking the power of recommendation a power of effectiverecommendation where in substantially all cases,recommendations arising from the participatory structures arefollowed. As Mansell points out, "the advantages tomanagement of socio-tech design are so great that there isconsiderable incentive for them to consider certain trade-offsin the area of management prerogatives. '1138Second, as an extension of the first, piece-meal use ofthese innovations will not have the positive economic effectssought; the commitment of the enterprise to these types ofparticipatory industrial relations practices must be exhibitedby the use of several of these innovations and their diffusionthroughout the organization, from the shop floor to thehighest levels of strategic planning. The literature clearlyestablishes that using only one or two of the innovationsmentioned above - from QC's to joint committees to semi-autonomous work groups, to profit-sharing, etc. - will resultneither in a sustained use of the innovation nor the positive137 See, for instance: Kochan & Katz, supra, note 55 at410; P. Goodman, Assessing Organizational Change: The RushtonOuality of Work Experience (New York: Wiley, 1979); Mansell,supra, note 60 at 23.138 Mansell, supra, note 60 at 23.92economic effects sought by management from their use.139There must be a definite commitment exhibited by the use andintegration of a variety of these innovations. Further, theprinciples of participation must diffuse throughout the threelevels of industrial relation identified by Kochan, Katz andMcKersie earlier."°Third, the mandate of these innovations cannot beisolated from topics normally the preserve of collectivebargaining. This is particularly necessary for QC's and jointcommittees which are often founded on a principle of a limitedmandate. However, while semi-autonomous work groups do notsuffer from this initial limited mandate, there is still roomfor expansion in this area.Finally, in order for this full form of participation totake place, there must be a strong union in place in theworkplace able to compel the employer to give up the necessarypower. Without a union, that will not likely occur.141It is clear from an examination of the current practiceof industrial relations in Canada and the United States thatthese prerequisites are not being yet practised on a widescale. But it is equally clear that unless they are met thelikelihood of success of these innovations in assisting North139 Lawler, supra, note 61.140 Kochan, Katz & McKersie, supra, note 56, especiallyChapter 9.141 Kochan & Katz, supra, note 55 at 418.^See also,Marshall, supra, note 3 at 205-06.93American enterprises is slim, as are the chances that theseinnovations will be any more than a passing fad. Thus, itwill be assumed for the balance of this paper, that most ofthese prerequisites will be met. If they are not there islittle likelihood there will be a serious need to consider thelegality of the innovations since the issue may largely bemoot.94Chapter ThreeThe Historical Roots of Central Collective BargainingPrinciples [T]he relation between an employer and anisolated employee or worker is typicallya relation between a bearer of power andone who is not a bearer of power. In itsinception it is an act of submission, inits operation it is a condition ofsubordination, however much thesubmission and the subordination may beconcealed by that indispensable figmentof the legal mind known as the "contractof employment". The main object oflabour law has always been, and weventure to say will always be, to be acountervailing force to counteract theinequality of bargaining power which isinherent and must be inherent in theemployment relationship. Most of what wecall protective legislation... must beseen in this context. It is an attemptto infuse law into a relation of commandand subordination.1Probably it was inevitable that employerswould oppose the rise of labororganizations, some bitterly. Unions notonly increased the power of employees todemand and secure higher wages, shorterhours and other benefits increasing laborcosts, and so seemed to threaten thecompany's profits; they also curtailedthe power of corporate management to makeunilateral decisions. Few persons liketo surrender power, and the more absolutetheir authority has been, the morereluctant they are to let it go.21 P. Davies & M. Freedland, Kahn-Freund's Labour and theLaw, 3rd ed. (London, U.K.: Stevens & Sons, 1983) 18. Adoptedby a Supreme Court of Canada majority in SlaightCommunications Incorporated v. Davidson, [1989] 1 S.C.R. 1038at 1051-52.2 A. Cox, D. Bok & R. Gorman, Cases and Materials onLabor Law 10th ed. (Mineola, N.Y.: Foundation Press, 1986) 12.95The proposition that employers and employees haveconflicting interests is not controversial. Distributiveissues, those concerning how the economic pie produced throughthe enterprise will be divided, show that conflict in sharprelief. The conflict may be less pronounced on integrativeissues, those concerning whether the enterprise will surviveto create the so-called pie. However, even on thoseintegrative issues employees are normally subordinates indeciding the course of action the enterprise will take in itsefforts to survive. For example, faced with competitivepressures which threaten the survival of the enterprise,management can adopt a strategy that draws upon the similarinterests employees have on the question of enterprisesurvival so that all parts of the enterprise pull together asa team to see the enterprise through the crisis. But equallyclear, management can adopt a strategy that subordinates theinterests of employees to that of the enterprise, resultingin, for instance, temporary or permanent lay-offs. Thus, evenin employment relationships where the parties clearlyappreciate the close alignment of their interests onintegrative issues, this neither eliminates the conflict onthe distributive issues nor makes it inevitable that theparties will choose to resolve integrative issues in the samemanner, with the same effects.3 At the end of the day,3 Canada, Canadian Industrial Relations: The Report ofTask Force on Labour Relations (Ottawa: Privy Council Office,1968) 124-25.96however, the subordinate position of employees ensures that itwill only be by coincidence that their interests are addressedby management's decision.These propositions are particularly clear in employmentrelationships where the only independent source of poweremployees possess is their individual right to quit therelationship. Freedom of contract is a myth when thebargaining power of the parties is substantially weighed infavour of one over the other. And an employee's right toquit, when exercised individually, has historically providedtoo little power compared to that of employers to achieve anemployment contract characterized as much by free will than bysubordination. However, when employees exercised theirindividual right to quit in a collective, concerted fashion,the bargaining power equation shifts dramatically.4If employee commitment to this concerted action wasstrong, employers would be faced with a powerful inducement toprovide employment on terms more favourable to employees.4 As the United States Supreme Court stated in AmericanSteel Foundries v. Tr-City Council (1921), 257 U.S. 184, 42S.Ct. 72, 66 L.Ed. 189:A single employee was helpless in dealingwith an employer. He was dependentordinarily on his daily wage for themaintenance of himself and family. Ifthe employer refused to pay him the wageshe thought fair, he was neverthelessunable to leave the employ and to resistarbitrary and unfair treatment. Unionwas essential to give laborers anopportunity to deal on equality withtheir employer.Quoted in Cox, Bok & Gorman, supra, note 2 at 5.97With this rule of thumb firmly in mind, employees from theearliest times of industrialization have sought tocollectively bargain with their employer, whether or not thatrelatively recent term of art was used to describe theprocess .5As equally well-rooted in history is employer oppositionto such activity by employees, for reasons generally describedby Cox, Bok & Gorman above.The history of relations between employers and employeesis a history of power struggles as employees have attemptedthrough collective action to have their interests count andemployers have attempted to maintain control over how theywill use, and how much they will pay for, the services ofemployees.The past contours of the relationship between employeesand employers are of much more than merely historicalinterest. Appreciating the historical experience is key tounderstanding the current relations between employers andemployees, as well as the law surrounding those relations.Though there are numerous commentators today, not to mentionjudges, suggesting that labour relations laws which assumeadversarial relations between employees and employers are5 See, for instance, S. Webb & B. Webb, The History ofTrade Unionism (London: Longmans, Green & Co., 1911) 1-56.98anachronistic,6 such observations are not unique to our eraand have usually been made without a full appreciation of theroots of our labour law. Appreciating the historicalbackground to our law, and perhaps the parallels with ourcurrent situation, will enable us to understand why these so-called anachronistic provisions are in our law and theirrelevancy in today's situation.This Chapter will attempt to provide that perspective byexploring the historical roots of those aspects of collectivebargaining law which comes most directly into conflict withthe types of innovations discussed in the preceding chapter.First will be discussed the history of those provisions foundboth in American and Canadian collective bargaininglegislation protecting the right of employees to bargaincollectively with their employer by prohibiting employeractivities which undermine that right, such as interfering,restraining or coercing employees in the exercise of thatright. At the same time the outright prohibition in theUnited States of employer-dominated or company unions will bediscussed, together with the Canadian prohibition oncertifying labour organizations that are dominated by theemployer. Next, I will outline the history of the exclusivebargaining agent status of trade unions in their6 See, for instance, N.L.R.B. v. Streamway Division ofScott & Fetzer Co. (1982), 691 F.2d 288 (6th Cir. C.A.). Seealso, J. Matkin, "The Future of Industrial Relations inCanada" (1986), 12 Canadian Public Policy 127 at 129.99representation of employees. Finally, I will discuss themanagerial exclusion from protection of collective bargaininglegislation, found both in American judicial decisions andCanadian legislation.Much of the source material of this Chapter is American,largely because of the relative dearth of detailed Canadiansources. While Canadian sources would be preferable, themajor historical trends to be discussed were also experiencedin Canada, resulting in Canada's adoption of the Americanlabour law framework. Where available, Canadian sources arecited.Freedom of Association The law's protection of collective action by employees inthe United States and Canada was virtually nonexistent at theend of the last century. By statute and common law in bothcountries workers interested in combining their bargainingstrength with others of like mind risked substantial criminaland civil sanctions, if not for the act of joining anassociation of fellow workers,7 more likely for taking anysteps acting in association that might work a pressure on anemployer, such as striking, to provide workers with a better7 An extreme example is that of the "Tolpuddle Martyrs"who were workers in England who joined with others in a tradeunion and swore an oath of allegiance to their association.They were convicted under a 1797 statute and transported toAustralia. The resulting public outcry resulted in theirpardon two years later. R. V. Lovelass (1834), 172 E.R. 1380.100dea1.8 By the time criminal law sanctions against theactivities of workers associating through trade unions beganto wane the availability of civil actions against workers andtrade unions continued to cause workers great difficulty. Thedevelopment of the torts of conspiracy and inducing breach ofcontract benefitted employers. This was particularly true inlight of the judiciary which was generally hostile tocollective bargaining and such associated activities aspicketing and strikes.9Despite the legal adversities, however, membership intrade unions greatly increased in the first two decades of8^Regarding the United States experience see, forexample, C. Gregory & H. Katz, Labor and the Law 3rd ed. (NewYork: W.W. Norton, 1979) especially Chapters 1-6; Cox, Bok &Gorman, supra, note 2 at 1-28; I. Bernstein, The Lean Years: A History of the American Worker 1920-1933 (Boston: HoughtonMifflin, 1960) particularly Chapter 4; C. Tomlins, The State and the Unions: Labor Relations, Law, and the Organized LaborMovement in America, 1880-1960 (Cambridge, U.K.: CambridgeUniversity Press, 1985) especially Chapters 2 and 3. For theCanadian perspective see, for instance: A. Carrothers, E.Palmer & W. Rayner, Collective Bargaining Law in Canada 2nded. (Toronto: Butterworths, 1986) Chapters 2 and 3; G. Adams,Canadian Labour Law (Aurora, Ont.: Canada Law Book, 1985) 1-10; M.A. Hickling, "Labour Law Report: Canada - Common Law",presented to the 12th International Congress of ComparativeLaw, August 16-26, 1986, p. 2-13; J. Weiler, "The Role of Lawin Labour Relations" in I. Bernier & A. Lajoie, Labour Law andUrban Law in Canada (Toronto: University of Toronto Press,1986) 1 at 2-4 (Vol. 51 in the series of studies commissionedas part of the research program of the Royal Commission on theEconomic Union and Development Prospects for Canada, the"Macdonald Commission").9 F. Frankfurter & N. Green, The Labor Injunction (NewYork: Macmillan, 1930).101this century. And the conditions that caused thesemembership advances, as well as a general employer antipathyto such organization and the resulting demands, resulted in agreat deal of open conflict between employers and employees,with the aid of the state coming to employers." As StuartJamieson has stated, specifically in reference to the 1900-1913 period, these years are "viewed as a classic period ofwidespread unrest and violence" 12 in North America.13The amount of employer antagonism to the development oftrade unions cannot be easily overstated. As Bok has argued,the open hostility by employers towards trade unionism, andthe resulting violence and unrest that accompanied efforts byS. Jamieson, Times of Trouble: Labour Unrest andIndustrial Conflict in Canada, 1900-66 Task Force on LabourRelations Study No. 22 (Ottawa: Supply and Services Canada,1971) 67-68, 158-59; Cox, Bok & Gorman, supra, note 2 at 9.Jamieson, supra, note 10 at 72.Jamieson, supra, note 10 at 62.13 As suggested by use of the Jamieson material, many ofthe same trends were shared in the Canadian and Americanexperience, not only at this time, but over the course of thedevelopment of labour law and policy after the turn of thecentury. As Joseph Weiler has stated:The Canadian industrial relations settingclosely resembles its U.S. counterpartnot only in terms of its geographical andhistorical environment, but also in termsof the identities of the companies andunions in the system.Weiler, supra, note 8 at 29. See also Jamieson, supra, note10 at 36-41 and his comments on this position at 41-60. Butsee N. Meltz, Labour Movements in Canada and the UnitedStates: Are They Really That Different? (Toronto: Centre forIndustrial Relations, University of Toronto, 1983); S.M.Lipset, Continental Divide: The Values and Institutions of theUnited States and Canada (New York: Routledge, 1990) 152-71.102trade unions to gain employer recognition of theirrepresentation of employees, is a distinctly North Americanphenomenon. 14 Although Bok was writing specifically aboutthe American experience, it is clear Canadian labour historyover the same period exhibits the same characteristic,although perhaps to a lesser degree, and perhaps more at thehands of the police and military than the employers themselvesthrough company police and Pinkerton agents. 15The violence accompanying trade union activity at thistime is only the most obvious reminder of this sorry period inour continental history. Somewhat more subtle, but perhapsmore effective in achieving employers' longer-term goal ofeliminating the independent power of collective action throughtrade unions, was the development of employer-dominated unionsubstitutes, or "company unions".Employers were led to broaden their attack on tradeunions. Employers likely sensed the growing desires ofemployees for a better deal, as manifested through trade unionactivity. Further, employers were faced with the labourshortages caused by World War I. Finally, employersunderstood the inherent waste from the violent struggle withworkers. The most widely successful methods developed werethose which tried to address the underlying discontent ofD. Bok, "Reflections on the Distinctive Character ofAmerican Labor Laws" (1971), 84 Harv. L. Rev. 1394 at 1401-11.15 Jamieson, supra, note 10 at 50-52, 69.103workers, but by a means which, unlike trade unions, was firmlyunder the control of the employer. As Slichter puts it,"employers suddenly became interested in gaining labor's goodThe "shop committee" became the method of choice,17not only in the United States but also in Canada.mThe use of shop committeesw was not unheard of before1915, but it was not until that year that a large Americancompany, Colorado Fuel & Iron Co., successfully implementedthe committee alternative in response, as was often the casewith such committees, to a recognition strike - "one of the• Slichter, "The Current Labor Policies of AmericanIndustries" (1929), 43 Quarterly J. of Economics 393 at 395.17 M. Derber, The American Idea of Industrial Democracy, 1865-1965 (Urbana, Illinois: University of Illinois Press,1970) 199.18 Canada experienced much the same phenomenon of companyunions, or employer-dominated unions, or representation plansas was experienced in the United States. See, for instance,R. Storey, "Unionization Versus Corporate Welfare: The"Defasco Way" (1983), 12 Labour/Le Travail 7 and A.W.R.Carrothers, Collective Bargaining Law in Canada (Toronto:Butterworths, 1965) 167. In fact, as noted below, WilliamLyon MacKenzie King, Deputy Minister of Labour in the Dominiongovernment in the first decade of this century, Minister ofLabour in 1909, successor of Sir Wilfred Laurier as leader ofthe federal Liberals in 1919, Prime Minister more times thannot from 1921 to 1948, is credited with designing the firstrepresentation plan for use in a large sized enterprise in1915 which became a prototype for others to follow. Thus, thefollowing comments and descriptions of such organizations inthe United States can be applied as well to Canada.19 The phrase "shop committee" will be usedinterchangeably with "employer-dominated union" or"representation plan" or "company union". Each describe muchthe same type of organization. See, for instance, H. Millis&R. Montgomery, Organized Labor (New York: McGraw-Hill, 1945)830-90 (Chapter 15, "Employee-Representation Plans andIndependent Unions").104bitterest industrial conflicts in the history of thecountry." 2° William Lyon Mackenzie King, hired for thepurpose by the company's owner, John D. Rockefeller, Jr.,designed the following outline of the committee structure:A board on which both employers andemployed are represented, and beforewhich, at stated intervals, questionsaffecting conditions of employment can bediscussed and grievances examined, wouldappear to constitute the necessary basisof such machinery.Clearly a substitute for collective bargaining, it sparkedmuch interest among businessmen.22The operating philosophy of such committees was amutuality of interests between employers and employees23 withthe need, from time to time, to smooth out the rough edgesthat would sometimes surface in workplace relations.Committees would, it was promised, facilitate communicationbetween the employer and employees and would thereby increasethe levels of trust and desire to cooperate among the parties.When employees discovered they and their grievances could beheard through the medium of committees, turnover would20^United States Department of Labor (Division ofIndustrial Relations), Characteristics of Company Unions 1935 Bulletin No. 634 (Washington, D.C.: Government PrintingOffice, 1938) 9.Quoted in United States Department of Labor, supranote 20 at 9.22^T. Kohler, "Models of Worker Participation: TheUncertain Significance of Section 8(a)(2)" (1986), 27 BostonCollege L. Rev. 499 at 522.a Kohler, supra, note 22 at 524.105decrease, morale would increase and, consequently, so wouldproductivity and product quality.24 In virtually allinstances, the committee plan was formulated and initiated bythe employer.25 As the United States Department of Laborobserved:The great majority of company unions wereset up entirely by management.Management conceived of the idea,developed the plan, and initiated theorganization...Almost never was itestablished without the assistance ofmanagement.Where management set up companyunions or supported their establishment,it sometimes exerted no pressure otherthan stating its own wish in the matter.More frequently, however, it appliedvarying degrees of additional pressure,including in some cases discharge oftrade-union members and threats to closedown the plant unless the company unionwas established. Since in so manyinstances the presence of a trade-unionhad inspired the movement to organize acompany union, one phase of the work ofsetting up a company union was to attackthe trade-union or to hamper it by delayand manipulation.26The form of such plans was not uniform from establishmentto establishment, but a common element was always some form ofjoint committee consisting of employer and employee represent-atives.27 The committee in the Colorado Fuel case, as was24 R. Bendix, Work and Authority in Industry (1956) 283-87.25 Kohler, supra, note 22 at 524.26 United States Department of Labor, supra, note 20 at199.27 Kohler, supra, note 22 at 524.106typical, was made up of equal numbers of employee and employerrepresentatives with an equal number of votes. But as wascharacteristic of all such committees or representation plans,the committee could only make recommendations to managementand management had no obligation to follow therecommendations. As one observer with an extensive backgroundin the study of such committees stated, representation plans"have involved little or no sacrifice in control on the partof management."28 There was no contemplation in theconstitution of such representation plans for employees tostrike to compel an employer to abide by a committeerecommendation.29 Striking was seen as inconsistent with thespirit of such representation.38 And since the employerprovided representation plans with whatever funds the employerbelieved were necessary for the plan's operation, there wereno resources upon which workers could rely in the event of astrike.31 Dues were not collected from plan members.Representatives for employees on these committees weregenerally selected by the employees themselves by way of athe United States"in History and28(1923),C. French, "The Shop Committee in41 Johns Hopkins University StudiesPolitical Science 107 at 109.29 United States Department of Labor, supra, note 20 at159.30 United States Department of Labor, supra, note 20 at159-60.United States Department of Labor, supra, note 20 at114-19.107vote.32 However, requirements established by manyconstitutions required that representatives had to be employedwith the company for a certain specified period, usually noless than one year and that representatives had to be Americancitizens.33 This latter requirement tended to leave many newimmigrants without representatives who were sensitive to theirparticular needs. Other factors affecting the quality ofrepresentation were the requirements in most constitutionsthat representatives only served for a term of one year, andthat representatives be drawn from the current employee rosterof the enterprise.34 Thus, expertise among employeerepresentatives was rare.The matters these committees dealt with varied fromcommittee to committee, but typically the matters consideredmost were individual employee grievances andhousekeeping/safety issues.35 More than half the committeessurveyed by the United States Department of Labor consideredthe specific wage rates of particular occupations, but onlyabout one half of those committees considered wage ratessupra, note 20 atUnited States Department of Labor,120.33 United States Department of Labor, supra, note 20 at121.United States Department of Labor, supra, note 20 at121-22.United States Department of Labor, supra, note 20 at162-63.108generally.36 In rarer instances committees would deal withsuch tasks as hiring, promoting and discharging employees, aswell as other managerial matters.37It was uncommon for any of the arrangements recommendedby the committee and accepted by management ever to be reducedto writing or otherwise form the basis of a contract betweenthe employees and the employer.38The rapid growth of representation plans was assisted bygovernment policy in the United States during World War I. Inthe United States there were periods of intense industrialconflict in 1917 caused by, according to a governmentcommission, "the insistence by employers upon individualdealings with their men" which precluded the development of ahealthy relationship between them, as well as the inability ofeach side to grasp the problems of the other because of thelack of collective bargaining.39 In the result, the NationalWar Labor Board encouraged the development of collectivedealing between employers and employees, but only throughimposition of shop committees. The Board consistently refused36 United States Department of Labor, supra, note 20 at162-63.37 Kohler, supra, note 22 at 525-26.38 United States Department of Labor, supra, note 20 at154. Less than one-fifth of the company unions surveyed bythe Department had any sort of bilateral agreement.39 Kohler, supra, note 22 at 522.109to order employers to recognize trade unions.° Labourmembers of the Board acquiesced to this position on the sharedunderstanding with other members that the shop committeeswould eventually evolve into legitimate trade unions.°However, this was not to be as many employers which hadrepresentation plans imposed upon them eliminated them afterthe war. Nevertheless, the use of such plans by the Boardgave greater exposure to them and thereby assisted theirspread in the years immediately following the war.42Between 1919 and 1922 the number of plans in the UnitedStates increased more than three-fold.43 Their use became sowidespread that by 1928 the American Social Science ResearchCouncil was able to report in its annual review of industrialrelations, "that while unionism was practically the only formof collective dealing two decades ago, since that time therehas been rapid spread of other forms of grouprepresentation. And as Kohler stated, "[i]ndeed, it iscorrect to say that from roughly 1915 until 1935, there werea Kohler, supra, note 22 at 523.Derber, supra, note 17 at 213-14.42 Derber, supra, note 17 at 213-14; Kohler, supra, note22 at 523.Derber, supra, note 17 at 214.44 H. Feldman, A Survey of Research in the Field ofIndustrial Relations A Preliminary Report to the AdvisoryCommittee on Industrial Relations of the Social ScienceResearch Council (New York: Office of the Council, 1928).Quoted in Derber, supra, note 17 at 229.110two labor movements in the United States, one consisting ofself-organized employee associations, the other being themanagement sponsored "employee representation" movement."45The significance of this development is appreciated when it isremembered that the prime function of these representationplans was to undermine the introduction of collectivebargaining by independent trade unions."As the decade proceeded it seemed representation plansand general welfare programs adopted by employers were here tostay as a firmly established alternative to collectivebargaining model .47The only legal prohibition against company unions at thistime was on the American railway which had, since the turn ofthe century, 48 been effectively organized, resulting in theunions having an effective voice in the passage of the RailwayLabor Act of 1926.49 The Act included a provision statingthat management and labour should designate their respectiverepresentatives to bargaining "without interference, influence45 Kohler, supra, note 22 at 526.46 I. Bernstein, The New Deal Collective BargainingPolicy (Berkeley, Calif.: University of California Press,1950) 13.'"47 D. Brody, "The Rise and Decline of Welfare Capitalism"in D. Brody, Workers in Industrial America (New York: OxfordUniversity Press, 1980) 48; Kohler, supra, note 22 at 523-24,526.48 Bernstein, supra, note 46 at 40.49 Cox, Bok & Gorman, supra, note 2 at 79.111or coercion exercised by either party over the self-organization or designation of representatives by theother."" The chief architect of that Act noted that the"keystone of [the Act] lay in the provision guaranteeingfreedom of association and the right of collectivebargaining."" The United States Supreme Court interpretedthe Act in 1930 so as to make company unions unlawful in thatindustry.52This same freedom of association provided for in thatAct, and which had found some favour in reports of industrialcommissions, court decisions and rulings of administrativebodies decades before Franklin D. Roosevelt became Presidentof the United States in l932, the generalized policyof the United States government with the dawn of Roosevelt'sNew Deal era.The new administration's ambitious plan to revitalize anAmerica ravished by the Great Depression translated into theNational Industrial Recovery Act of 1933. Roosevelt wasanxious to have the backing of both business and organizedlabour for any recovery legislation he was going to propose.50 Quoted in Cox, Bok & Gorman, supra, note 2 at 80.D. Richberg, The Rainbow (Garden City, N.Y.: 1936) 51.Quoted in Bernstein, supra, note 46 at 23.52 Texas & New Orleans R.R. Co. v. Brotherhood of Railway& Steamship Clerks (1930), 281 U.S. 548, 50 S.Ct. 427, 74L.Ed. 1034.See, generally, Bernstein, supra, note 46 at 18-28.112Without the support of both groups, he believed, any recoveryplan would not succeed.54 Organized labour's strongest allywithin Roosevelt's inner circle of advisors was Senator RobertWagner of New York.Wagner was firmly committed to the idea of freecollective bargaining through independent trade unions,arguing that u[t]he denial or observance of this rights meansthe difference between despotism and democracy."55 Wagnerwas called upon by Roosevelt to assist in the drafting of thelegislative program making up the President's recoveryprogram.Labour's push for some form of generalized legislativeguarantee for the right to organize and bargain collectively,and Wagner's support of that principle, resulted in one of thefour cornerstones of the recovery program being support forthe collective bargaining model of employee representation.56The resulting language in the National Industrial RecoveryAct, signed by the President on June 16, 1933, read asfollows:Section 7(a): Every code of faircompetition...issued under this titleshall contain the following conditions:(1) That employees shall have the rightto organize and bargain collectivelythrough representatives of their ownchoosing, and shall be free from the54 Bernstein, supra, note 46 at 32.55 Quoted in Bernstein, supra, note 46 at 28.56 Bernstein, supra, note 46 at 29 -39.113interference, restraint, or coercionof employers of labor, or theiragents, in the designation of suchrepresentatives or in self-organization or in other concertedactivities for the purpose ofcollective bargaining or othermutual aid or protection;(2) that no employee and no one seekingemployment shall be required as acondition of employment to join anycompany union or to refrain fromjoining, organizing, or assisting alabor organization of his ownchoosing;...57The labour provisions of the National Industrial RecoveryAct represented a strong statement of policy favouring thefreedom of employees to join together in independent tradeunions for the purposes of collective bargaining withemployers. However, the Act faced a host of problems makingit ineffective in advancing the cause of collectivebargaining. Because the Act was of doubtful constitutionalvalidity, and because it contained little in the way ofeffective enforcement mechanisms,58 there was not a greatdeal of incentive on industry to comply with decisions of theNRA under the Act. And the Act's provisions were so ambiguousthat industry could maintain its interpretation that the Actdid not prohibit many of industry's activities which stifledthe prospects of collective bargaining. The labour boardsestablished under the Act promulgated such "cloudy andinconsistent" decisions that industry's arguments were never57 Quoted in Bernstein, supra, note 46 at 37.58 Bernstein, supra, note 46 at 64.114firmly defeated.59For example, the American Federation of Labor's positionon Section 7(a) was that it showed clear Congressional intentmaking illegal those employer activities that undermined theprospects of collective bargaining through independent tradeunions, such as the maintenance of company union. However,the advice the National Association of Manufacturers gave itstens-of-thousands manufacturer merabers60 was that theprovisions only prohibited employers from requiring itsemployees join company unions. Otherwise, individualbargaining, company unions, inducements to joins companyunions, refusal to recognize "outside" trade unions, and othersuch tactics were still permitted.Indeed, the Act had the unintended effect of makingemployers somewhat more sophisticated in their use of companyunions. So as to avoid allegations of interference orrestraint on the rights provided by Section 7(a), employerschanged the joint committee structure of company unions.Provision was made for separate meetings of only the employeerepresentatives and, like the independent trade union on whichthey were patterned, the company union would now have its ownconstitution, elected officers and representatives, by-laws,59 Kohler, supra, note 22 at 527 and references citedtherein.60 In 1937 the N.A.M. represented, through its alliedgroups, over 30,000 manufacturers with nearly 5 millionemployees. Bernstein, supra, note 46 at 14.115a membership and other such attributes. m The employeerepresentatives would meet with management on the pretence of"bargaining", but the nature of the relationship between thecompany union and the employer did not substantially departfrom tradition. 62 As with the pre-N.I.R.A. company unions,management still initiated the process, formulated the union'sconstitution and by-laws (which almost never made provisionfor general membership meetings), and controlled whether anyproposals arising from the employees would be acted upon. 63In short, the drive to company unionism barely missed astep under the N.I.R.A.. As Bernstein points out, "[a]s amatter of policy...employers selected the company union asbest designed to frustrate the A.F.L. interpretation since itwas employer controlled and yet appeared to be "collective"bargaining."" Thus, while the N.I.R.A. sparked the mostintense organizing to that date by independent trade unions,it also ushered in a period of even greater development ofcompany unions. 65 For example, of 635 manufacturing andmining companies surveyed at the end of 1933, 400 establishedKohler, supra, note 22 at 528.Kohler, supra, note 22 at 528-29.63 Kohler, supra, note 22 at 528-29.Bernstein, supra, note 46 at 57.65 United States Department of Labor, supra, note 20 at27-28.116company unions under the N.I.R.A..m By 1935, 2.5 millionworkers belonged to company unions, about two-thirds thenumber that belonged to trade unions.67 Three-fifths of thecompany unions in existence in that year had been organizedsince 1933 and the rate of growth of company unions wasgreater than that of independent unions.68In the early 1920's when, for the first time, the numberof company unions was on the rise while membership inindependent trade unions began to fall, the A.F.L. became"seriously alarmed".69 The A.F.L.'s concern increasedexponentially over the next decade so that by 1935 theA.F.L.'s sights were exclusively directed at purging allindustries of company unions. This aim resulted in avigourous organizing campaign. More pointedly, the A.F.L.'sgoal was sought to be achieved through legislation that wouldmake good on the promises it believed had been made in theN.I.R.A..Their pressure for labour law reform came at an opportuneBernstein, supra, note 46 at 57.The percentage dependsKohl:, supra, note 22 at 530,using his figure of 2.5 millioncomparing it with the figureFederation of Labor members inon the source relied upon.says 60 per cent. However,company union employees andof 3.045 million American1935 noted in United StatesDepartment of Labor, supra, note 20 at 28, the percentageworks out to just over 82 per cent.68 Kohler, supra, note 22 at 530.69 United States Department of Labor, supra, note 20 at25.117time, immediately on the heels of Railway Labor Act reformresulting from the strong concern administrators of the Acthad about, inter alia, the roadblocks posed by company unionsfor employee self-organization.7° The reform includedprovisions aimed directly at eliminating employer dominationof bargaining representatives by, for instance, positivelyprohibiting employer interference with self-organization,employer contributions to bargaining agents, and employerinducements to join a company union.71 Elimination of thecompany union on the railway was inevitable as a result of thereform.72 And although the legislation applied only toworkers on the railways, the example presented for reform ofthe N.I.R.A. did not escape contemporary observers.73Against this background, Congress was ready to deal withlabour relations matters on a broad scale. In the November,1934 elections, President Roosevelt and the New Deal won themost overwhelming victory to that date in the history ofnote 46 at 47.Bernstein, supra,Bernstein, supra, note 46 at 50-55.Bernstein, supra, note 46 at 55.73 As George Harrison, president of the Railway ClerksUnion and member of a special advisory panel to PresidentRoosevelt, put it, the legislation was "a precedent in theextension of these same rights and privileges to employees ofother industries. I don't see how the next Congress canrefuse the demand of the American Federation of Labor for morespecific legislation to implement the labor sections of theNational Industrial Recovery Act." Bernstein, supra, note 46at 56.118American politics.74The legislation that was to become the National LaborRelations Act was introduced in 1935. Its chief sponsor,Senator Wagner, and key supporters within Congress, were keento protect the rights provided under the N.I.R.A. withsubstantive legislation possessing the enforcement teethcapable of doing the job. As Wagner stated upon introductionof the first version of his bill, the N.I.R.A. "attempted toopen the avenues to collective bargaining by restating theright of employees to act through representatives of their ownchoosing, free from the influence of employers."m Section7(a) did not provide this freedom because it "did not outlawthe specific practices by which some employers set upinsuperable obstacles to genuine collective bargaining."76Wagner's first priority was to remedy that deficiency.Wagner was clear on the problems company unions hadcreated for the cause of independent employee representationand upon what was needed, in his view, to alter thatsituation. "The very first step toward genuine collectivebargaining is the abolition of the employer-dominated union asan agency for dealing with grievances, labor disputes, wages,A Bernstein, supra, note 46 at 88.75 National Labor Relations Board, Legislative Historyof the National Labor Relations Act, 1935 Vol. 1 at 15.76 Legislative History, supra, note 75 at 15.119rules, or hours of employment," Wagner stated. 77^"[TheN.I.R.A.'s] promise of free and unhampered development of realemployee organizations, and their complete recognition shouldbe guaranteed by the enactment of the new legislation which isbeing proposed today."78Although it can fairly be said that the entire bill wasaimed at protecting the right of employee self-organization byeliminating company unions, two particular provisions,operating in tandem, specifically called for that result. Thefirst was what would become Section 8(a)(2) of the currentlegislation:Section 8 (a): It shall be an unfairlabor practice for an employer -(2) to dominate or interfere with theformation or administration of anylabor organization or contributefinancial or other support to it;Provided, That subject to rules andregulations made and published bythe Board pursuant to section 6, anemployer shall not be prohibitedfrom permitting employees to conferwith him during working hourswithout loss of time or pay;Section 2: When used in this Act -...(5) The term "labor organization" meansany organization of any kind, oragency or employee representationcommittee or plan, in whichemployees participate and whichexists for the purpose, in whole orin part, of dealing with employersconcerning grievances, laborLegislative History, supra, note 75 at 16.Legislative History, supra, note 75 at 18.120disputes, wages, rates of pay, hoursof employment, or conditions ofwork.The legislation did not take its mark against companyunions in the certification process. In other words, thecertification provisions in the Act did not deal at all withcompany unions. This, as we shall later see, is to becontrasted with the parallel Canadian legislation which deniescertification rights to company unions. Instead, the Americanapproach was to prohibit company unions outright, whether ornot they apply to be certified as bargaining agent under theAct.By its approach, the Act exhibited a clear, consciouschoice between two models of employee representation. TheAct's elimination of company unions left open the field to theonly other alternative vying then for support - theindependent trade union existing at arm's length from theemployer. This is not to suggest that the public policychoice for such representation arose only by implication underthe Act. On the contrary, repeatedly throughout the debateover the bill, Wagner made clear that "the genuine freedom ofself-organization" was the basic underlying principle of theAct, and that such freedom was only possible with arepresentative independent of the employer in the waysarticulated in Section 8(a) (2).79 As Sumner Slichter put it,testifying before the Senate Committee dealing with the79 See, for instance, Kohler, supra, note 22 at 532-33.121legislation, the "basic policy" of the Act, "if I understandit correctly, is to prevent the growth of employer-dominatedunions. ,,80The positions taken by employers appearing before thecommittee clearly indicates they appreciated the choice beingmade in the legislation. As well, their positions, viewed inretrospect, help to establish just the sorts of organizationsthe legislation intended to eliminate.One employer witness urged the committee to delete thelanguage that later laid the base for Section 8(a)(2), statingthat it would have the effect of instituting a "single form ofunionism."81 Kohler summarizes this witness's view:"Employee representation," Dennisonstated, "is an essential supplementary80 Legislative History, supra, note 75 at 89. See also,Bernstein, supra, note 46 at 102. Slichter sardonically addedthe following during his testimony:I have been trying to find some of theseemployer-dominated unions, and I havetalked with many employers, and thus farI have been unable to discover a singleemployer who admits that he has anemployer-dominated union. In fact, everyemployer with whom I have talked has beenoutspoken in expressing the principle -the belief in the principle that employeeorganizations should be entirelyindependent of employer control. So Ishould be greatly surprised were anyemployer to appear and oppose this bill,except in matters of detail.Legislative History, supra, note 75 at 89 (quoted in Kohler,supra, note 22 at 531).Legislative History, supra, note 75 at 436. Quotedin Kohler, supra, note 22 at 531. The witness was HenryDennison, an industrialist and National Labor Board memberunder the N.I.R.A..122and a necessary competing type ofunionism," through which "a sound systemof joint and mutual participation inmanagement has developed or isdeveloping." Wagner's bill, Dennisonwarned, would cause these schemes "for awholesome mutual business relationshipbetween management and workers" to be"dug up with the tares" instead ofpermitting them "to be cultivated asseeding ground or laboratories from whichwe may learn." Out of the "slowlyfreeing competition and the gradualcomparison of the two forms," statedDennison, "we shall be able to developmodifications of each" that will permitthe "realization...of the truth that anybusiness organization that can knititself into a single organism will provesuperior as an institution of broadsocial value, to one which must exist intwo somewhat stiffly cooperating andsometimes actively conflicting segments."A bill that would "cramp all systematiccontact.. .as this bill cramps it,"Dennison admonished, ought "to beconsidered most carefully" before it isenacted. 82The position taken by employer groups during Senateconsideration of the original 1934 version of what would laterbecome the N.L.R.A. took the view that company unions shouldnot be outlawed since, "[i]n view of the objective ofpromoting cooperative relations[,] participation of bothworkers and employers in company unions was proper." 83 Thesame tack was taken during debate over the 1935 version thatbecame the N.L.R.A.. An industry spokesman said as followsat those hearings: "[the company union assumed that] the best82 Kohler, supra, note 22 at 531-32 (footnotes omitted).83 Bernstein, supra, note 46 at 70.123interests of labor can be served by having the employee andemployer sit down together in a friendly and constructiveatmosphere and, with a firsthand practical knowledge of theirproblems, work out a fair and equitable solution. ,,MAt root, the position put forward by employers was that,while the then proposed legislation assumed unalterableconflict of interests between employers and employee, industrybelieved that there existed an identity of interest betweenmanagement and labour.85 By prohibiting company unions,industry charged, Congress would be committing "a deliberateattempt to fasten upon industry in this country a system oforganized labor affiliated with the...American Federation ofLabor."86 In the process, the legislation would upset"existing satisfactory relations" which had greatly assistedproduction in the enterprises where they had beenpractised.87Kohler sums up the hearing process, and the legislativeintent exhibited by it, in the following manner:Throughout its consideration of the Act'sterms then, Congress was confronted witha clear choice between two distinctlydifferent models of group dealing. Inenacting the NLRA, Congress endorsed one,and thereby adopted a scheme for theprivate ordering of the employmentQuoted in Bernstein, supra, note 46 at 109.Bernstein, supra, note 46 at 108.Quoted in Bernstein, supra, note 46 at 108.87 Bernstein, supra, note 46 at 108.124relationship that is based on collectivebargaining through self-organized andautonomous employee associations.mProviding an effective freedom to choose collectivebargaining was the touchstone of the legislation. But inemployment relationships, freedom of choice cannot be presumedmerely because employees have a secret ballot vote to choose,for instance, a company union over a legitimate trade unionindependent of the employer. Employees will tend to beparticularly sensitive to the desires of the employer and willoften feel that they dare not cross an employer which has madeit clear that it wants, for instance, a company union andwishes its employees to reject an independent trade union.89Kohler, supra, note 22 at 535.89 This statement is not as uncontroversial as itintuitively appears. A major attack on the proposition wasmade in 1976 with publication of J. Getman, J. Goldberg & J.Herman, Union Representation Elections: Law and Reality (1976)which asserted that the adverse effects of employer activitieson the ability of employees to exercise their free will inrepresentation elections had been grossly overstated. Theymade a strong case for a total deregulation of the process bywhich employees chose whether they will be represented intheir relations with their employer, and by whom. The studyhas been the subject of numerous attacks, the most effectiveof which have used the study's own statistics to show why itsconclusions are not valid. See W. Dickens, "The Effect ofCompany Campaigns on Certification Elections: Law and RealityOnce Again" (1983), 36 Industrial and Labor Relations Rev. 560and W. Dickens, "Union Representation Elections: Campaign andVote", unpublished Ph.D. dissertation, Department ofEconomics, Massachusetts Institute of Technology, October 1980(summarized and discussed in P. Weiler, "Promises to Keep:Securing Workers' Rights to Self-Organization Under the NLRA"(1983), 96 Harv. L. Rev. 1769 at 1784-86). At best, we canconclude at this point that the evidence one way or the otheris ambiguous and that, consequentially, we would be wisest tofollow instinct in the matter which tells us that those withpower over others can, at least in the short run, cause those125So while freedom of choice is the heart of the legislation,the legislation is shaped by the realization that freedom ofchoice is only really possible by outlawing employerinterference, whether it be in the form of discriminatorydischarges of union sympathizers or organizers, or by theemployer's creation of a model of employee representation inwhich it plays any part.Telescoping back to Chapter Two, the basis of possiblelegal problems for innovations discussed there can be seen.Each represents a structure for presenting the ideas, concernsand desires of employees to the employer and each is initiatedby the employer, who retains a strong role in theiradministration. Chapters Four and Five will explore theseissues more fully.Exclusive bargaining authorityWhile Section 8(a)(2) went very far in its protection ofemployees rights to organize within independent trade unions,it alone would have been insufficient to undercut otheremployer tactics which frustrated the effective exercise byemployees of their freedom to bargain collectively through therepresentative of their choosing. Bargaining by individualemployees with their employer over the terms and conditions oftheir employment was the hallmark of the common law regime inlabour relations. It was the lack of fair results throughothers to act in a manner contrary to their interests.126this regime which, as earlier discussed, led to unionorganization on the premise that bargaining as a group withthe employer afforded employees a better chance of striking amore favourable deal for themselves. But the ability ofemployers to continue bargaining with individual employees, ororganizations purporting to represent a group of employees whohad not joined the trade union, provided the employer with astrong weapon with which to divide the workforce intofactions, thus weakening the bargaining power of anyparticular group. Francis Biddle, the first chairman of theNational Labor Relations Board predating the Wagner Act Board,made the following statement to Congress during considerationof the Wagner Act:The experience of this Board in the casesbefore it has indicated that theinsistence of the employer on individualbargaining has been for the purpose ofinterfering with collective bargainingand not for the purpose of preserving theindividual liberty of contract of theAmerican workman.9uSpeaking specifically about employers bargaining individuallywith employees over wages, the United States Supreme Court inJ.I. Case Co. v. N.L.R.B., noted the divisive power of such apractice:[A]dvantages to individuals may prove asdisruptive of industrial peace as90 Quoted in R. Weyand, "Majority Rule inBargaining" (1945), 45 Columbia L. Rev. 556 at 567.Bernstein, supra, note 46 at 109 where he"[b]usiness attacked the majority rule for denyingof minorities".CollectiveSee also,comments,the rights127disadvantages. They are a fruitful wayof interfering with organization andchoice of representatives; increasedcompensation, if individually deserved,is often earned at the cost of breakingdown some other standard thought to befor the welfare of the group, and alwayscreates the suspicion of being paid atthe long-range expense of the group as awhole.91Besides the divisive effects of individual bargaining, thereis the perhaps more significant consequence that trade unionswill lack the credibility and economic power that can beexerted when a union approaches an employer speaking for allemployees. The enticement of some individual employees withrelatively greater bargaining power to strike a betterindividual deal for themselves, and the ability of employersto pressure individual employees in relatively weakerbargaining positions to accept less than the union demands,both play into the hands of the employer and make the unionweaker. When such employees are taken together with those whojust do not want to associate with the union for ideologicalor religious reasons, and will thus be willing to strikeindividual deals, the employer is provided an important andpowerful weapon to undermine whatever positive results werepromised by the freedom to bargain collectively.92It was consequently clear to the framers of the N.L.R.A. J.I. Case Co. V. N.L.R.B. (1944), 321 U.S. 332 at 338-39.92 P. Weiler, Reconcilable Differences: New Directions in Canadian Labour Law (Toronto: Carswell, 1980) 125-26.128that their reform, to be effective, would have to deal withthis divisive employer power to negotiate individually withemployees, or with a variety of groups. Western Europeanmodels of plural representation, whereby unions would onlyrepresent those employees who specifically selected thatunion, were believed not capable of working in the UnitedStates in light of the intense employer antipathy forcollective bargaining and their desire to undermine it.°The first Roosevelt National Labor Board had tried suchpluralism, calling on employers to bargain with groups prorata to their membership.% But later, commenting on itseffects, Bernstein stated:Proportional representation fragmatized[sic] and destroyed unions, creatingjealousy, friction, and division withinthe plant. Millis[, one of the membersof the pre-N.L.R.A. National LaborRelations Board,] observed that employersproposed it as a short-term device tobreak unions...95The answer the N.L.R.A framers provided was the principle ofmajority rule. As Senator Wagner put it during Senate debate:[C]ollective bargaining can be reallyeffective only when workers aresufficiently solidified in theirinterests to make one agreement coveringall. This is possible only by means ofSee, for instance, Bok, supra, note 14, esp. at 1426-1427.94 Bernstein, supra, note 46 at 60.° Bernstein, supra, note 46 at 103. See also, Millis& Montgomery, supra, note 19 at 542-43.129majority rule.96Majority rule in representation was not an extraordinarilynovel idea. Not only was it the basis of American electoralpolitics, but it was also the basic organizational structureof such anti-union groups as the National Association ofManufacturers, which led the employer fight against theN.L.R.A., and the American Chambers of Commerce.97 And therewere settled examples of its use in earlier American labourpolicy under the Railway Labor Act, 1926 and the War LaborBoard 98The implications of applying majority rule principles tocollective bargaining were fundamental to any success the newlegislation would have in institutionalizing collectivebargaining. They were neatly summed up ten years afterenactment by Weyand:In contrast to the concern of thecommon law with the assumed intent ofeach employee, the majority ruleprinciple makes the intent of any or allthe individual employees immaterial.Instead, by analogy to the politicalprocess, each employee, union and non-union alike, who falls within the unitover which the elected representative hasjurisdiction, is subject to allprovisions respecting his employment uponwhich the representative and the employeragree. Like the legislative branch ofgovernment, effecting changes in the law,96 Quoted in Weyand, supra, note 90 at 567. See also,Weyand, supra, note 90 at 565-66.7' ^supra, note 46 at 103.98 Bernstein, supra, note 46 at 103.130the union and the employer, by changingfrom time to time the rules governinghours, wages and conditions ofemployment, bind the employee to eachchange effected irrespective of theemployee's intent in the matter. Nor canthe employee by any individual contractalter the rules governing his employmentfixed by the collective agreement enteredinto by the union elected by a majorityof the employees in the unit any morethan a citizen by private contract alterthe laws enacted by the legislature.Majority rule replaces whatever rights anemployee theretofore had to bargainindividually by establishing a democraticprocedure by which he and his fellowworkers in the appropriate unitparticipate in making the decisionsgoverning their working conditions byvoting as to which union shall representthem and by shaping the policies of thatunion through membership therein.99The United States Supreme Court, in an early decisioncontemplating the ramifications of the majority ruleprinciple, accepted the above implications by stating:The practice and philosophy of collectivebargaining looks with suspicion on suchindividual advantage. Of course, wherethere is great variation in circumstancesof employment or capacity of employees,it is possible for the collective bargainto prescribe only minimum rates ormaximum hours or expressly to leavecertain areas open to individualbargaining. But except as so provided,advantages to individuals may prove asdisruptive of industrial peace asdisadvantages. They are a fruitful wayof interfering with organization andchoice of representatives; increasedcompensation, if individually deserved,is often earned at the cost of breakingdown some other standard thought to befor the welfare of the group, and always99 Weyand, supra, note 90 at 561.131creates the suspicion of being paid atthe long-range expense of the group as awhole. Such discriminations notinfrequently amount to unfair laborpractices. The workman is free, if hevalues his own bargaining position, tovote against representation; but themajority rules, and if it collectivizesthe employment bargain, individualadvantage or favors will generally inpractice go in as a contribution to thecollective result."°Canadian jurisdictions, in the late 1930's, similarlyadopted majority rule to provide bargaining agents withexclusive bargaining authority. 101 And like the UnitedStates Supreme Court, the Supreme Court of Canada gave effectto the implications of exclusivity by stating:The union is, by virtue of...itscertification...the representative of allthe employees in the unit for the purposeof negotiating the labour agreement.There is no room left for privatenegotiation between employer andemployee. Certainly to the extent of thematters covered by the collectiveagreement, freedom of contract betweenmaster and individual servant isabrogated. ... It is not within the powerof the employee to insist on retaininghis employment on his own terms, or onany terms other than those lawfullyinserted in the collective agreement.102100 J.I. Case Co. v. National Labor Relations Board(1944), 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed. 762.101^Millis & Montgomery, supra, note 19 at 790-91;A.W.R. Carrothers, Collective Bargaining Law in Canada (Toronto: Butterworths, 1965) 194.102 Svndicat Catholique des Employees de Magasins deOuebec, Inc. v. Compagnie Paquet Ltee, [1959) S.C.R. 206 at212, 18 D.L.R. (2d) 346 at 353-54, 59 C.L.L.C. 15,409.132Management exclusion from collective bargainingAs noted earlier in discussing freedom of association,the conflict of interest between employers and employees ondistributive issues underlies the rationale for legislativelypreventing employer influences from infecting employeedecisions on whether to bargain collectively with theiremployer. Preserving employee autonomy in exercising thatchoice is vitally important if distinct employee interests areto be advanced.Conversely, employers are vitally concerned that theirdistinct interests, relative to employees, are adequatelyprotected when employees decide to bargain collectively.Specifically, employers have a strong interest in ensuringthat those individuals in the enterprise who determine or giveeffect to the employer's policy and personnel decisions, manyof which may adversely effect the bulk of the enterprise'semployees, will not be part of that bargaining unit designedto advance employee interests. If these individuals belongedto the bargaining unit, they would be faced with anintolerable conflict of interest as between the employer andtheir fellow employees whenever they were required to make orgive effect to decisions that might adversely affect the otheremployees.Consequently, employers have consistently sought to haveexcluded from collective bargaining units any individuals whosupervised employees in such units or who determined or gave133effect to employer policy decisions.The 1935 National Labor Relations Act did not containprovisions expressly dealing with the status of supervisorsand managerial employees. It simply gave collectivebargaining rights to all "employees", only specificallyexcluding from that definition agricultural workers, domesticservants and individuals directly related to the employer.103Taken literally, the Act provided the right of collectivebargaining to any employee, including high level executivesand supervisors of other employees.However, the National Labor Relations Board was facedalmost immediately with employer arguments that placingsupervisors in bargaining units would divide theseindividual's loyalties as between the employer and the union.The Board was never directly faced with a certificationapplication for a unit composed of managers (i.e., individualswho were responsible for developing the enterprise's policy inrelation to, for instance, suppliers, customers, and.employees) 104 But supervisors, such a foremen and otherswho represented the first line of supervision over employees,often sought certification in the early years of the Act,either as part of a unit of employees which they supervised or10 National Labor Relations Act, infra, note 113, s.2(3).104 D. Rabban, "Distinguishing Excluded Managers fromIncluded Professionals Under the NLRA" (1989), 89 Columbia L.Rev. 1775 at 1787.134as a separate unit. Whether or not they should be permittedto collectively bargain was Hone of the most contested areasof labor law during the 1940's. " 105The difficulty of the issue was illustrated by the Boardreversing itself twice in a four year period between 1942 and1946106 before settling with the conclusion that supervisoryemployees were entitled to collectively bargain. The UnitedStates Supreme Court, in 1947, supported the Board'sresolution of the issue.107The arguments that were ultimately successful before theBoard and the Supreme Court were those that stressed thesimilar adverse interests supervisors and rank-and-fileemployees shared as against the employer on issues of wages,hours and working conditions. No matter where an employee issituated within the enterprise hierarchy, that employee doesnot owe a duty of loyalty to the employer on such issues. 108The adverse interests as between supervisor and employer on105 Rabban, supra, note 104 at 1783.106 Union Collieries Coal Co. (1942), 41 N.L.R.B. 961(supporting certification supervisors); Godchaux Sugars Inc. (1942), 44 N.L.R.B. 874 (same result); Maryland Drydock Co. (1943), 49 N.L.R.B. 733 (overruling Union Collieries andGodchaux); Packard Motor Car Co. (Packard I) (1945), 61N.L.R.B. 4 (overruling Maryland Drydock); Packard Motor CarCo. (Packard II) (1946), 64 N.L.R.B. 1212 (ordering bargainingin accordance with Packard I). See Rabban, supra, note 104 at1783.107 Packard Motor Car Co. v. N.L.R.B. (1947), 330 U.S.485.108 Packard I, supra, note 106 at 19.135such issues would arise whether or not the supervisor wasentitled to collectively bargain.109 Thus, to denysupervisors the right to collectively bargain would underminethe central purpose of the Act to further an inclusivedemocratic philosophy entitling all to the benefits derivedfrom collective bargaining.") Allowing supervisors toadvance their "independent and adverse" interests regardingwages, hours and working conditions would not adversely effectthe supervisor's ability to loyally assert the employer'sinterests in performing daily duties. "1 If for some reasonindividual supervisors had difficulties in this regard, itwould be open to the employer to appropriately discipline thesupervisor. 112While a majority in the United States Supreme Court foundfavour with many of these arguments, and upheld the Board'sconclusions allowing supervisors to collectively bargain,Congress acted immediately to reverse the Supreme Court andBoard decision by way of the Taft-Hartley Amendmentsm tothe National Labor Relations Act in 1947. Those amendmentsspecifically excluded from the Act's protection "any109 Packard II, supra, note 106 at 1214.110 Packard (Supreme Court), supra, note 107 at 490.Packard (Supreme Court), supra, note 107 at 490.112 Packard I, supra, note 106 at 19.113 61 Stat. 136 (1947) (codified into the National LaborRelations Act, 29 U.S.C. paras. 151-166 (1982)).136individual employed as a supervisor" .114 Further, theAmendments defined "supervisor" as meaning "any individualhaving authority, in the interests of the employer, to hire,transfer, suspend, lay off, recall, promote, discharge,assign, reward, or discipline other employees, or responsiblyto direct them, or to adjust their grievances, or effectivelyto recommend such action, if in connection with the foregoingthe exercise of such authority is not of a merely routine orclerical nature, but requires the use of independentjudgement. ”115The arguments that laid the base for this Congressionalaction were those which stressed that unionization ofsupervisors posed unacceptable dangers to enterprises of11divided loyalties among supervisors. 6 The authority theyexercise over other employees makes supervisors "aninstrumentality of management in dealing with labor.""7 Ifsupervisors were able to unionize they would be allied withrank-and-file employees, thereby placing themselves "in theimpossible position of having to enforce the employer's rulesagainst the very employees to whom they were pledged in labor114 National Labor Relations Act, supra, note 113, s.2(3).115 National Labor Relations Act, supra, note 113, s.2(11).116 Rabban, supra, note 104 at 1785.117 Maryland Drydock, supra, note 106 at 740.137solidarity. u118 This would pose tremendous difficulties foremployers in effectively managing their enterprises.One argument which fuelled the dissent in Packard II atthe United States Supreme Court, and which captured theimagination of Congressional members, was the speculation thatallowing supervisors to unionize would lead to collectivebargaining by the highest level executives of enterprises, aprospect that would lead enterprises to abandon the interestsof stockholders and investors, causing irreparable harm tofree-enterprise. 119Hyperbole aside, however, Congressional concern for thelong-term interest of business stability played an importantrole in its decision to exclude supervisory personnel from theAct's protection. The following passage, summarizing theviews of the Senate Committee which drafted the supervisoryexclusion, has been identified as the crux of Congressionalconcern in excluding supervisors from collective bargainingprotection:The committee took the position that foremen are anessential and integral part of management, and thatto compel management to bargain with itself, so tospeak, by dividing the loyalties of foremen betweenthe union and the employer, simply did not makesense, and inevitably would prove harmful to the118 Rabban, supra, note 104 at 1785. See also, MarylandDrydock, supra, note 106 at 741, Packard II, supra, note 106at 1217-18.119 Packard (Supreme Court), supra, note 107 at 494.free-enterprise system.12°While Congress specificallypersonnel, no mention was made inpolicy-making managers and whetherfrom the Act's coverage. However,decisions in the late 1930's, it wasnot considered as eligible for138excluded supervisorythe 1947 amendments tothey were also excludedfrom the earliest Boardclear that managers werecollective bargainingcontemplated by the Act. 121 The Board's rationale for thisexclusion was seldom express, but had to be drawn fromdecisions, for instance, in which the Board contrasted truemanagers from supervisors in order to establish the latter'seligibility for collective bargaining under the Act. Fromsuch decisions it became clear that the Board consideredemployees who helped establish policy for enterprises were ina fiduciary relationship with the enterprise which was owed adegree of loyalty commensurate with the trust and discretionplaced in them by the enterprise. 122 Thus, individuals whohelped determine the employer's policies related to, forinstance, the conduct of labour relations, the establishmentof wage rates, or who had authority to establish wage rates orselect production techniques, were considered managerial and120^93 Congressional Record 5014 (1947) (quoted inRabban, supra, note 30 at 1795 n84).121 See, for instance, Goodyear Tire & Rubber Co. (1937),3 N.L.R.B. 431, Brooklyn Daily Eagle (1939), 13 N.L.R.B. 974,Boston Herald-Traveler Corp. (1946), 47 N.L.R.B. 651.122 See, for instance, Maryland Drydock, supra, note 106at 745.139thus ineligible for bargaining under the Act:23 The Board,in 1946, summarized the developed rule as follows:We have customarily excluded...executive employeeswho are in a position to formulate, determine andeffectuate management policies. These employees wehave considered and still deem to be "managerial"in that they express and make operative thedecisions of management:24The Board, however, narrowed the exclusion in 1970 inlight of growing sympathies for the growing number ofmanagerial employees seeking the Act's protection and thefailure of Congress to expressly exclude policy-makingmanagers, as they did with supervisors. Further, the Boardconcluded that the conflict of interests rationale only hadcompelling force when the policy-making functions of theindividuals in question were in relation to the enterprise'slabour relations policies:25 Thus, only individuals havingpolicy-making functions in that area would be excluded fromthe Act's protection.The United States Supreme Court, however, rejected theBoard's narrowing of the exclusion in the appeal from the123 See, for instance, Chrysler Corp. (1944), 58 N.L.R.B.239, Chicago Daily News (1944), 56 N.L.R.B. 274, Yale & Towne Manufacturing Corp. (1945), 60 N.L.R.B. 626, Ford MotorCo. (1946), 66 N.L.R.B. 1317, Electric Auto Lite Co. (1944),57 N.L.R.B. 723, Inland Steel Container Co. (1944), 56N.L.R.B. 138, Spicer Manufacturing Corp. (1944), 55 N.L.R.B.1491.124 Ford Motor Co., (1946), 66 N.L.R.B. 1317.125 R. Gorman, Labor Law: Unionization and CollectiveBargaining (St. Paul, Minn.: Wests, 1976) 38.140Board's 1970 decision. In N.L.R.B. V. Bell Aerospace Co. 126the Court determined that Congress intended, despite theabsence of any relevant legislative provision, that allpolicy-making managers be excluded from the protection of theAct. This intent was derived, inter alia, from Congress'sfailure to act in relation to such managers in 1947 when, atthat time, the Board's jurisprudence clearly excluded allpolicy-making managers. The Court remanded the case back tothe Board which then articulated the following definition ofexcluded managers which has since governed:[T]hose who formulate and effectuate managementpolicies by expressing and making operative thedecisions of their employer, and those who havediscretion in the performance of their jobsindependent of their employer's establishedpolicy... [M]anagerial status is not conferred uponrank-and-file workers, or upon those who performroutinely, but rather it is reserved for those inexecutive-type positions, those who are closelyaligned with management as true representatives ofmanagement.127In summary, individuals acting either in supervisory orpolicy-making positions were excluded from collectivebargaining protection due to the perceived conflict that wouldarise for those individuals as between their union and theiremployer if they were permitted to collectively bargain. Theinterests of employers to have individuals in such positionsaligned solely with the enterprise overcame opposition whichfavoured enfranchising such individuals in the collective126^(1974), 416 U.S. 267, 73 L.C. 14,465.127 Bell Aerospace Co. (1975), 219 N.L.R.B. 384.141bargaining regime.The historical survey presented in this Chapter lays thegroundwork for the next two Chapters, which will explore theapplication of the doctrines introduced in this Chapter tospecific industrial relations innovations. That explorationwill show a degree of tension between the law and theinnovations, a tension which may tempt governments to jettisonthose aspects of the law causing that tension. The questionposed by this Chapter in addressing that temptation is whetherthe historical purposes served by the doctrines no longerrepresent valid concerns for labour law policy-makers.142Chapter FourLegal Implications in the United States The preceding Chapter illustrated the two primary themesof North America's collective bargaining legal framework.First, the interests of labour and capital conflict on issuesconcerning how the employment relationship will operate on aday-to-day basis and how the fruits of enterprise prosperitywill be shared between them. Second, individual employeeshave substantially less power in the employment relationshipthan employers and this has the undesirable result of employeeinterests being subjugated to the interests of employers.The consequential labour law doctrines acknowledge thesethemes by creation of a legal edifice that supports thecollectivization of labour so as to address the second truism,and attempts to keep labour and capital at arms-length indealing with each other so as to address the first reality.This legal edifice works reasonably well in the typicalNorth American enterprise of the 20th century. However, whenlabour and capital incorporate changes into their relationshipwhich do not fit comfortably with these over-riding themes andresulting doctrines, such as those innovations canvassed inChapter Two, the parties risk running squarely up against thatlegal edifice.Exactly what problems do these doctrines pose for the newindustrial relations? This Chapter and the next will addressthat issue by articulating some of the legal problems faced by143the New Industrial Relations. The answer will be addressed inthe following manner. First, the statutory, and in somecases, common law basis of the doctrines placing the NewIndustrial Relations at risk will be identified, together witha brief explanation as to how those doctrines normally operatein cases without any new industrial relations complications.Next, the paper will discuss how these doctrines have beenapplied or, in cases where there is little applicablecomparison, how the doctrines would be applied, when facedwith some of the innovations identified earlier.This Chapter will deal with these issues from theperspective of the collective bargaining law of the UnitedStates, with the next Chapter focusing on the Canadianexperience. This is as much an effort at comprehensiveness ascomparative study; however, comparing and contrastingexperiences will be an inevitable result.The United States Experience There is a wide variety of doctrines and principles inAmerican labourl law which may be hostile to industrialrelations innovations that depart from the strict adversarial,hierarchical structure of workplace management. For example,the prohibition against employer domination or interference inThe Canadian spelling of the word "labour" will beused in the text. However, where the word is used in aquotation from American materials, the spelling found there("labor") will be used without constantly using thedesignation "[sic]" after each use.144labour organizations found in Section 8(a)(2) of the National Labor Relations Act (hereafter, the "N.L.R.A.") may outlawquality circles and joint employee-employee committees in non-union workplaces where such innovations are introduced atmanagement's initiative. In unionized workplaces, innovationsblurring the distinctions between management and those managedmay collide head-on with the "common law" exclusion ofmanagerial personnel from bargaining units and the statutorylimits on the participation of supervisory personnel in theaffairs of the union. Further, if use of industrial relationsinnovations transform employees into managers and supervisorsin the eyes of the law, will their participation in unionaffairs transform the union into an employer-dominated labourorganization?Not every legal issue raised by the New IndustrialRelations can be effectively covered in a work of this size.However, three of the most contentious areas will be covered.First, this Chapter will deal with the issues raised by theprohibition found in Section 8(a)(2) of the N.L.R.A. againstemployer domination or interference with the formation oradministration of a labour organization. Next, the Chapterwill consider the implications of the exclusion of managementand supervisors from the definition of "employee" under theN.L.R.A.. Finally, the Chapter will examine the doctrine ofbargaining agent exclusivity which provides the trade unionselected to represent the employees in a bargaining unit the145exclusive authority to bargain with the employer on theirbehalf.(1) Employer dominationSection 7 of the N.L.R.A. sets out the fundamental rightsthe Act was intended to protect and enhance. That Sectionstates in part:Employees shall have the right to self organizationto form, join, or assist labor organizations, tobargain collectively through representatives oftheir own choosing, and to engage in otherconcerted activities for the purpose of collectivebargaining or other mutual aid or protection...Section 8 of the N.L.R.A. creates a number of unfairlabour practices intended to give effect to the rightsestablished in Section 7. The five unfair labour practiceslisted under Section 8(a) apply to employer conduct, while thefour found in Section 8(b) apply to union conduct.Section 8(a)(1) provides a general prohibition onemployer interference, restraint or coercion of employees inthe exercise of their Section 7 rights. Section 8(a)(2) isnarrower in its focus and provides:Section 8(a) It shall be an unfair labor practicefor an employer -(2) to dominate or interfere with theformation or administration of any labororganization or contribute financial orother support to it: Provided, Thatsubject to rules and regulations made andpublished by the [National LaborRelations] Board pursuant to Section 6,an employer shall not be prohibited frompermitting employees to confer with himduring working hours without loss of time146or pay;As is clear from the wording of this provision, theprohibition against domination, interference and support onlyapplies if the body affected is a "labor organization". Adefinition for "labor organization" is provided in Section2(5) of the Act, and it states:Section 2. When used in this Act -(5) The term "labor organization" means anyorganization of any kind, or any agencyor employee representation committee orplan, in which employees participate andwhich exists for the purpose, in whole orin part, of dealing with employersconcerning grievances, labor disputes,wages, rates of pay, hours of employment,or conditions of work.(a) Section 8(a)(2) As discussed at length earlier, the purpose of Section8(a)(2) was to outlaw the "company union" - the type of labourorganization that was under the control of management. Thevery existence of such labour organizations (whether they becalled "representation plans", "representation committees","grievance committees", "employee committees" or "jointlabour-management committees") acted as a barrier to thedevelopment of a truly independent collective bargainingrepresentative. The data before Congress in 1935 when Section8(a)(2) was enacted clearly showed the extreme difficultiestrade unions had in organizing employees when the employer had147in place a dominated labour organization.2 Full freedom ofself-organization would not be possible if company unions werepermitted to compete in the workplace with legitimateindependent trade unions.3 Thus, Section 8(a)(2) set out toeliminate this hollow competitor.4The characteristics which made company unions andrepresentation plans so ineffective in advancing the interestsof employees were the same characteristics the N.L.R.B. andthe Courts looked for in determining whether therepresentative system established at the workplace wasemployer-dominated. The Sixth Circuit Court of Appealsarticulated the characteristics in 1968:The problem of managerial interference anddomination is not new to this Court. Among thefactors which this Court has, in the past,considered significant in determining the existenceof unlawful management domination of a labororganization are the following: lack of anywritten governing instrument and lack of anyindependent means of financial support on the part2 J.R. Commons & J.B. Andrews, The Principles of LaborLegislation, 4th ed. (New York, N.Y.: Harper & Bros., 1936) at409. See also, N.L.R.B. v. Pennsylvania Greyhound Lines, Inc., 1 L.C. 17,027 (U.S.S.C. 1938) at 79.3 As the Board stated in Grafton Boat Co., 173 N.L.R.B.999 (1968) at 1003:The vice of a dominated labor organization, andthe reason for its outlawing by Congress, is thatany employer can discourage collective bargainingby holding it out to his employees as an instrumentfor that purpose which they can adhere to withoutincurring his disfavor.See also, Wisconsin Beef Industries, Inc., 249 N.L.R.B. 256(1980) at n2.4 Cox, Bok & Gorman, supra, Chapter Three, note 2 at199.148of the labor organization, the fact that itsmeeting are only held on company property, theattendance at these meetings of high managementrepresentatives, the taking and distribution ofminutes by a management official, the fact thatmeetings could be called by a management official,the fact that employees were paid for the timespent at meetings, management participation inelections, management preparation and distributionof ballots, management determination of employeeelectoral units, management determination of timeof election, managerial prerogatives which mayaffect the status of an employee for electionpurposes (such as promotion, transfer anddischarge), absence of independent legal advice on[the] part of labor organizations and generalreliance on the advice of management for itsfunctioning and activities.5While this represents a useful catalogue of company unionattributes, the jurisprudence is clear that, at least intheory, the determination whether a labour organization isemployer dominated depends on the facts and circumstances ofeach particular case.The issue is whether the structure and operation of thelabour organization leads to the conclusion that theorganization is not capable of acting as an autonomous voiceand bargaining representative for employee concerns and isthereby not the freely chosen representative of the employees.Particularly during the first twenty years of theN.L.R.A.'s administration by the N.L.R.B. and the Courts, this5 N.L.R.B. v. H & H Plastics Manufacturing Co., 57 L.C.12,490 (6th Cir. 1968) at 20,961-62. See also, "Trade Unionsversus Shop Committees" in J.R. Commons, ed., Trade Unionismand Labor Problems (Boston, Mass.: Ginn & Co., 1921) 345, esp.346-48 for a clear articulation of the inadequacies ofemployer-dominated labour organizations.149conclusion would be reached in an automatic fashion° if theevidence established some level of employer or managerialparticipation in the establishment or formation of theorganization,7 its funding,8 its meetings or its selection ofrepresentatives that would deal with management. During thisperiod, employer domination would be inferred by the employerproviding free use of company facilities or premises by theorganization, by the employer paying employees for time spenton the work of the labour organization or meetings on companytime, or by the participation of supervisors or othermanagerial employees in any aspect of the organization'screation or administration.A Section 8(a)(2) violation would also be found when theemployer unilaterally initiated an employee representationplan, notwithstanding that the employees accepted and6^The per se nature of conduct which constitutedviolations of Section 8(a)(2) is discussed in: Note, "NewStandards for Domination and Support Under Section 8(a)(2)"(1973), 82 Yale L. J. 510 at 511-15; Note, "CollectiveBargaining as an Industrial System: An Argument AgainstJudicial Revision of Section 8(a)(2) of the National LaborRelations Act" (1983), 96 Harv. L. Rev. 1662 at 1663-64; S.Gardner, "The National Labor Relations Act and WorkerParticipation Plans: Allies or Adversaries?" (1988), 16Pepperdine L. Rev. 1 at 14-16.7 Note, "Section 8(a)(2): Employer Assistance to PlantUnions and Committees" (1957), 9 Stanford L. Rev. 351 at 359.8 See, for example, Pacemaker Corp. v. N.L.R.B., 260F.2d 880 (7th Cir. 1958), N.L.R.B. V. Sharples Chemicals, 209F.2d 645 (6th Cir. 1954) and N.L.R.B. v. General Shoe Corp.,192 F.2d 504 (6th Cir. 1951).150participated in the plan without complaint.9 One commentator,writing in 1957, stated:Employer initiation seems to be the "death-kiss" toemployee associations. There have been few caseswhere the Board has not found domination where thisfactor was present. Even a mere suggestion thatthe employees form a plant representation plan hasoften been considered "initiation" of the employeeorganization, especially if made in a coercivecontext."All such employer conduct, the N.L.R.B. concluded, wouldhave the effect of defeating the right of employees to freelychoose a representative to engage in collective bargainingwith the employer. Early in its administration, the Boardexpressed its logic in the following manner:Activities, innocuous and without significance, asbetween two individuals economically independent ofeach other or of equal economic strength, assumeenormous significance and heighten to proportionsof coercion when engaged in by the employer in hisrelationship with his employees. For this reasonthe Board has been guided by the disparity ineconomic power between employer and employee inevaluating the significance of the an employer'sconduct as an unfair labor practice under section8[(a)](2). The purpose of section 8[(a)](2) isapparent. The formation and administration oflabor organizations are the concern of theemployees and not of the employer."9 See, for instance: Northeastern Engineering, Inc., 112N.L.R.B. 743 (1955); Texas City Chemicals, Inc., 112 N.L.R.B.218 (1955); Standard Coil Products, Inc., 110 N.L.R.B. 412(1954); Indiana Metal Products, Inc., 100 N.L.R.B. 1040(1952); General Shoe Corp., 90 N.L.R.B. 1330 (1950).10 Note, "Section 8(a)(2): Employer Assistance...",supra, note 7 at 359 n56. See also: Coppus Engineering Corp.,115 N.L.R.B. 1387 (1956); Ben Corson Manufacturing Co., 112N.L.R.B. 323 (1955); Jay Co., 103 N.L.R.B. 1645 (1953); BryanManufacturing Co., 94 N.L.R.B. 1331 (1951).3 N.L.R.B. Annual Report (1939) at 125-26.151Certainly the landscape of employment law for individualsprovided additional justification for the close scrutiny ofemployer conduct in relation to the formation andadministration of labour organizations. Unless a collectiveagreement provides otherwise, and subject to recentlydeveloped public policy exceptions, employees are vulnerableto the "employment-at-will" doctrine which provides that theiremployment can be terminated by their employer without noticefor any reason whatsoever or no reason at all. In thatcontext there is little surprise in employees beingparticularly sensitive to the employer's wishes such thatconduct which, in another context, might appear harmless isconsidered to exhibit domination or interference whenencountered in the employment relationship.This explains why there was little need in these casesfor the charging party to establish by direct evidence thatemployees were in fact dominated or interfered with in theirchoice of bargaining representatives. Such evidence wouldlikely be extremely difficult to provide since the greater thedomination by the employer the less likely employees wouldfeel free to act against the employer's interests, especiallythrough evidence in a public forum like an N.L.R.B. hearing.This was implicitly acknowledged by the United States SupremeCourt when it articulated a test under Section 8(a)(2) asfollows:It would indeed be a rare case where the finders offact could probe the precise factors of motivation152which underly [sic] each employee's choice.Normally, the conclusion that their choice wasrestrained by the employer's interference must ofnecessity be based on the existence of conditionsor circumstances which the employer created or forwhich he was fairly responsible and as a result ofwhich it may reasonably be inferred that theemployees did not have that complete and unfetteredfreedom of choice which the Act contemplates.12Thus, the fact that there was demonstrated employeesupport for the labour organization and that the employer hadthe most benevolent of intentions in implementing theorganization, was not relevant to the Supreme Court when itotherwise determined that the labour organization was underthe employer's control." The key consideration for theCourt was whether the organization was in any position toexert economic pressure so as to advance the interests of theemployees. The Court concluded that a labour organizationaffected by employer domination or interference would beunwilling or unable to exercise economic weapons against theemployer.14 And in the result, the interests of employeeswould be little more advanced that was the case withindividual bargaining."12 N.L.R.B. v. Link-Belt Co., 311 U.S. 584 (1941) at 588(emphasis added).See N.L.R.B. v. Newport News Shipbuilding and Dry DockCo., 308 U.S. 241 (1939).Newport News, supra, note 13 at 249-51.This is not to suggest that employer-dominated labourorganizations had no redeeming qualities whatsoever in termsof assisting employees in the workplace. As Cox, Bok & Gormanpoint out, "[w]hile representation plans did significantlystem the advance of independent union organizing153There is little doubt that if the standards noted in thepreceding paragraphs were applied to the industrial relationsinnovations raised in Chapter Two, many of them would be foundto be inconsistent with Section 8(a)(2). In the nonunionsector virtually all such innovations were initiated by theemployer who, often with the assistance of consultants insocio-technical design, fashioned the manner in which suchinnovations were to be implemented and operated on a day today basis. Further, the employer is generally involved inestablishing the parameters of the committee's or circle'smandate, although, as noted in Chapter Two, there is often agreat deal of pressure from employee participants to broadenthe body's mandate. These characteristics, together with theabsence of an independent source of funds for the group andthe longevity of the innovation dependent on the employer'sgood will, would clearly cause these bodies to run contrary tothe rigorous enforcement of Section 8(a)(2) that characterizedthe Act's administration well into the 1950's.Developments in the Section 8(a)(2) jurisprudence sincethat time, however, makes it much less certain whether thisresult would occur today. The strict approach discussed abovebegan to wane among the judiciary in the latter part of the1950's. This was perhaps due to the fading memories ofefforts,...they did provide many workers for the first timewith a voice concerning their working condition." Supra,Chapter Three, note 2 at 199.154rampant company unionism in the 1920's and 1930's, 16 the lackof labour relations expertise among the judiciary needed toenforce the decisions of the Board, or the uncomfortablefeeling of adjudicators when their strict application ofSection 8(a)(2) caused the disestablishment of arepresentation plan to which no employee affected objected andwhich was not tainted by an anti-union animus by the employer.Whatever the reason, a definite shift has occurred in thejudiciary's approach to Section 8(a)(2) questions. Thischange occurred on two fronts, both of which provide hope forindustrial relations innovations related to committees andquality circles. First, the courts developed a less searchingstandard of domination and interference by distinguishing suchconduct from "cooperation", which they held was not prohibitedconduct. Second, the courts began narrowing the definition of"labor organization" as that phrase is used in Section 8(a)(2)and defined in Section 2(5), with the effect of excluding fromthe scrutiny of Section 8(a)(2) some industrial relationspractices similar to those discussed in Chapter Two. As notedearlier, Section 8(a)(2) only prohibits domination orinterference if the body at issue is a "labor organization".The first shift in Section 8(a)(2) interpretation -distinguishing domination and interference from cooperation -Kohler, supra, Chapter Three, note 22 at 545 ("Inshort, it appears that as time has passed, the meaning andbasic purposes of the Act have been forgotten by the bodiescharged with enforcing and applying its terms.")155began with the Seventh Circuit Court of Appeals' decision inChicago Rawhide Manufacturing Co. v. N.L.R.B.17The employer had opened a new plant and during its firstyear of operation no attempts were made by a union to organizethe employees. During this first year the employer set up asystem for handling grievances.18 That system was notsatisfactory to the employees, resulting in the employer anda group of employees working together to create arepresentation plan which included a Grievance Committee andan Employee Shop Committee.19 Finally, these committeeswere merged under thename "Elgin Rawhide EmployeesAssociation". The employer "let its employees meet duringworking hours so that those who had worked out the grievanceprocedure with management could explain it to the others."20Members of the Shop Committee were elected by the employeeswithout the knowledge of management.About a year later a union affiliated with the A.F.L.-C.I.O. began an organizing drive which resulted in theN.L.R.B. conducting a representation election. While theunion was organizing a petition with unknown origins wascirculated among the employees in support of the EmployeesAssociation. This petition garnered the support of 80 per221 F.2d 165, 27 L.C. 69,052 (7th Cir. 1955).Chicago Rawhide, supra, note 17 at L.C. 88,458.9 Chicago Rawhide, supra, note 17 at L.C. 88,458.Chicago Rawhide, supra, note 17 at L.C. 88,458.156cent of the employees. Both the union and the Associationdemanded recognition from the employer, but the Associationdeclined the opportunity to have its name on the ballot forthe representation election. The union was defeated in thatelection by a six to one margin. A few weeks after theelection, the Association sought, and was provided,recognition by the employer as bargaining agent for theemployees 21The N.L.R.B. determined that the employer dominated andinterfered with the formation and administration of theAssociation under Section 8(a)(2). 22The Seventh Circuit Court of Appeals refused to enforcethe decision. To their mind, it was important to draw a linebetween, on one hand, control, influence and support of alabour organization, and, on the other hand, mere cooperationwith that organization. 23 The heart of their analysis istheir unqualified assertion, without reference to authority,that "the principal purpose of the Act...is cooperationbetween management and labor." 24 The only guidance the Courtprovided in precisely how to distinguish lawful cooperationfrom unlawful support, interference and domination, is theircomment that such unlawful acts "constitute some degree ofChicago Rawhide, supra, note 17 at 88,458.Chicago Rawhide, supra, note 17 at 88,458.23 Chicago Rawhide, supra, note 17 at L.C. 88,459.24 Chicago Rawhide, supra, note 17 at L.C. 88,459.157control or influence" while "[c]ooperation only assists theemployees or their bargaining representative in carrying outtheir independent intention."25The Court also articulated a test for domination whichrequired that a Section 8(a)(2) violation be based on afinding of actual domination of the labour organization, notjust a possibility or potential for domination.26 TheCourt's logic, which incidentally speaks the logic whichrequires truly independent bargaining representatives, wasthat "[t]he employer-employee relationship itself offers manypossibilities for domination, which is one of the reasons forthe original enactment of the Wagner Act".27 The Court wenton, "[t]he Board is quite correct in pointing out thatemployer assistance may be, and often has been, a means ofdomination. "28 But, the Court added, "[a]ssistance orcooperation does not always mean domination, however, and theBoard must prove that employer assistance is actually creating3 Chicago Rawhide, supra, note 17 at L.C. 88,459.26 Chicago Rawhide, supra, note 17 at L.C. 88,459. Asan aside, this test is to be contrasted with the test theCourts apply when the allegation is that the union is in aconflict of interest situation in seeking to represent a groupof employees. This becomes and issue, for instance, when theunion has some financial interest in the employer. In suchcases the Courts only requiring a showing that the union haspotentially conflicting loyalties; actual instances of theunion acting against the interests of the bargaining unit neednot be shown.27 Chicago Rawhide, supra, note 17 at L.C. 88,459.Chicago Rawhide, supra, note 17 at L.C. 88,459.158company control over the union before it has established aviolation of Section 8(a)(2)."29The Court also rejected the objective reasoning test thathad been the basis of many previous Section 8(a)(2) violations- whether an objective person looking at the circumstances ofthis case would conclude that the employer has control overthe labour organization. Instead, the Court adopted a purelysubjective standard - whether the employees perceive orbelieve the organization is controlled by the employer.30The Court then drew great comfort from the wide margin ofrejection of an affiliated union.The Court summed up its reasons for decision in thefollowing manner:The Company and the great majority of its employeesare now, as they always have been, in completeaccord as to the bargaining representative. We arenot going to permit the destruction of a happy andcooperative employer-employee relationship whenthere is absolutely no evidence to support afinding of unfair labor practice.31In short, the Court appeared to adopt a test thatprimarily turned on what the court perceived to be employeefree-choice. Notwithstanding that many of the circumstancespointed towards a dominated labour organization, if theemployees selected that organization without apparent overtcoercion by the employer, the organization would be found to29 Chicago Rawhide, supra, note 17 at L.C. at 88,459.30 Chicago Rawhide, supra, note 17 at L.C. 88,459.Chicago Rawhide, supra, note 17 at L.C. at 88,461.159be an instance of cooperation rather than employer control ordomination. The freedom of choice the Court felt Section8(a)(2) gave employees was the freedom to ratify anorganization that was not free.32This test is confirmed in a number of subsequentdecisions which found that, although the labour organizationat issue was extremely weak and unlikely to act or supportaction or goals that lacked employer approval, theorganization was the uncoerced expression of the employees'free choice and thus was not violative of Section 8(a)(2).For example, in Federal-Mogul Corp. v. N.L.R.B.,33 theSixth Circuit Court of Appeals concluded that the weakness ofthe labour organization at issue, here exhibited by their lackof a charter, constitution, by-laws, independent formalstructure and independent source of financing, was not arelevant consideration under Section 8(a)(2) when the evidenceotherwise suggested that the organization was supported by amajority of the employees.34 The Court acknowledged thatu[a]n affiliated labor union, by means of its high degree oforganization and financial resources, is more equipped than apoorly organized employees' committee to withstandKohler, supra, Chapter Three, note 22 at 545.33 394 F.2d 915, 57 L.C. 12,706 (6th Cir. 1968).Federal-Mogul, supra, note 33 at L.C. 21,688.160managerial attacks on its integrity and independence."35 Theemployees' freedom of choice was found to be the paramountconsideration and where, as here, the organization had beenpresent for a long period of time and there were no examplesof the employer using the admittedly great potential fordomination, a Section 8(a)(2) cannot be supported. The Courtdid not consider evidence as significant which indicated theemployer controlled the topics the committee could deal withand had advised a committee member that a safety concern heattempted to raise was none of his concern.36Similar comments can be found in the Sixth Circuit Courtof Appeals decision in Modern Plastics Corporation v.N.L.R.B.37 where the Court stated as follows in rejecting theBoard's finding of domination:The evidence, taken in its entirety, may supportthe inference that the Employees' Committee was aweak organization. But the evidence clearly showsthat this was the desire of the employees. Theywere free at any time to refuse to accept any ofthe services rendered, and to control attendance attheir meetings, without any threat or coercion orinterference on the part of the Company.38This conclusion was reached despite the fact that on severaloccasions the employer refused the Committee Chairman time todiscuss particular grievances with employees. Further, theFederal-Mogul, supra, note 33 at L.C. 21,688.36 Federal-Mogul, supra, note 33 at L.C. 21,689.37 379 F.2d 201, 55 L.C. 12,004 (6th Cir. 1967).38 Modern Plastics, supra, note 37 at 19,318.161employer denied the Chairman's request to meet with employeesafter work in the company lunchroom because the employer didnot feel the employees would attend such a meeting. Althoughthe employer did not tell a new Committee Chairman how to runthe Committee, the Chairman was told by the employer how theCommittee operated in the past.39A further example is found in the Ninth Circuit Court ofAppeals decision in Hertzka & Knowles v. N.L.R.B.  ,413 wherethe Court concluded employee committees were not dominated orinterfered with, notwithstanding that a managementrepresentative attended each committee meeting. Although thatholding by itself is significant, the means by which the Courtreached it is particularly notable for the future of the NewIndustrial Relations.Immediately after a Board representation election, ameeting of management and the employees resulted in creationof five committee structures serving as a forum for discussionand formulation of proposals for changes in employment termsand conditions. The idea was based on a proposal theunsuccessful union had put to management.° Each committeewould have five employees and one management representativeand would have a particular zone of competence, such as39 Modern Plastics, supra, note 37 at L.C. 19,317.503 F.2d 625, 75 L.C. 10,334 (9th Cir. 1974).Hertzka, supra, note 40 at L.C. 17,162.162remuneration, minimum standards, or efficiency. 42The Court began its discussion of the Section 8(a)(2)issue by stating:Central to the National Labor Relations Act is thefacilitation of employee free choice and employeeself-organization. Indeed, Section 8(a)(2) is, inpart, a means to that end, for it seeks to permitemployees to freely assert their demands forimprovements in working conditions. Literally,however, almost any form of employer cooperation,however innocuous, could be deemed "support" or"interference". Yet such a myopic view of Section8(a)(2) would undermine its very purpose and thepurpose of the Act as a whole - fostering freechoice - because it might prevent the establishmentof a system the employees desired....For this same reason courts have emphasizedthat there is a line between cooperation, which theAct encourages, and actual interference ordomination considered from the standpoint of theemployees, which the Act condemns... .The sum ofthis is that a Section 8(a)(2) finding must rest ona showing that the employees' free choice, eitherin the type of organization or in the assertion ofdemands, is stifled by the degree of employerinvolvement at issue.43Based on this framing of the test, the Court dismissedthe assertion that Section 8(a)(2) was violated by meetings ofthe committees on company time and on company premises, andmanagement calling the original meeting where the committeesystem was established. The Court then said:The question essentially comes down to thesignificance of having management partners on thecommittees. True, this may mean bargaining is"weaker" than if there were a formally organizedunion. Yet this feature too was chosen by theemployees, and it is one with which, for all theHertzka, supra, note 40 at L.C. 17,160, 17,162.Hertzka, supra, note 40 at 17,162-63.163record show, they are not dissatisfied."The Court's ultimate rationale was expressed in thefollowing paragraph:For us to condemn this organization would markapproval of a purely adversarial model of laborrelations. Where a cooperative arrangementreflects a choice freely arrived at and where theorganization is capable of being a meaningfulavenue for the expression of employee wishes, wefind it unobjectionable under the Act.45The decision has been firmly condemned in the followingwords:As can be seen, Hertzka & Knowles works a radicaltransformation in the meaning of Section 8(a)(2),one that cannot be accommodated with the Act'sbasic purpose. In the framer's usage, free-choicereferred to removing all obstructions to theexercise of employee initiative to exercise theirassociational rights to organize - if they so chose- self-directed and self-controlled autonomousgroups through which employees would participate inpromulgating the code that governs theirrelationship with their employer. To the Hertzka & Knowles court, free choice becomes the freedom notto self-association, but to ratify an "organizationthat is not free" and thus incapable of functioningin the collective bargaining process. In effectthen, the Hertzka & Knowles decision is tantamountto the judicial repeal of Section 8(a)(2). Itreturns the law to its pre-Texas & New Orleans Railway [(1930), 281 U.S. 548] state, and permitsemployers to implement substitutes for self-association and collective bargaining so long assome sort of employee assent is manifested.Ironically, this holding adopts the interpretationof the NIRA's Section 7(a) which management hadforwarded, and which led Senator Wagner to framethe Act in the first place."Hertzka, supra, note 40 at L.C. 17,163.Hertzka, supra, note 40 at 17,163.46 Kohler, supra, Chapter Three, note 22 at 545.164The difficulty of the paramountcy of employee free choicethat runs through the Chicago Rawhide - Federal-Mogul - ModernPlastics - Hertzka & Knowles line of authorities is that theresulting decisions seem to defy common sense. It would bedifficult to argue, in the abstract, that freedom of employeesto choose their bargaining representative is not and shouldnot be a central feature of labour law policy. However, thesecases do not arise in abstract or in a vacuum.First, they arise in a context extremely similar to thatof the 1920's and 1930's when, in the name of cooperation andharmonious long-standing relationships, Congress was asked byemployers to preserve room in the N.L.R.A. for the continuedexistence of representation plans and the like.47 There islittle doubt such organizations did perform useful functionsfor both employers and employees and that they enjoyed supportamong employees covered by them, even if only because someform of representation was better than none at all. But inCongress' considered view, the good they did was faroutweighed by the damage they did to the opportunity ofemployees to have independent labour organizations with apower base and a capacity to function as bargainingrepresentatives separate from the employer.4847 Supra, Chapter Three, note 82.48 See, for instance, Note, "Collective Bargaining as anIndustrial System: An Argument Against Judicial Revision ofSection 8(a)(2) of the National Labor Relations Act" (1983),96 Marv. L. Rev. 1662 at 1675, 1679.165^.Second, they arise in a context where such factors as theemployment-at-will doctrine and the mobility of capitalprovide employers with infinitely greater power to command thecompliance of individual employees than the opposite. Asnoted in Chapter Three, the British labour lawyer Sir OttoKahn-Freund stated:[T]he relations between an employer and an isolatedemployee or worker is typically a relation betweena bearer of power and one who is not a bearer ofpower. In its inception it is an act ofsubmission, in its operation it is a condition ofsubordination, however much the submission andsubordination may be concealed by thatindispensable figment of the legal mind known asthe "contract of employment".49This inevitable power inequality cannot but help to influenceemployee actions in their relationship with their employers.When one lacks the means of compelling the compliance ofanother adverse in interest, one is much more willing toaccept what is provided as good fortune and make the best ofit rather than risk the exercise of the that power held by theperson adverse in interest. Such truisms provide the prismthrough which one must scrutinize apparent approval byemployees of a representation plan, committee system or otherlabour organization established by an employer in theworkplace. Only by viewing matters in this way is there hopeof determining whether the type of organization representingemployees is truly the manifestation of employee free choice.49 P. Davies & M. Freedland, Kahn-Freund's Labour and theLaw, 3rd ed. (London, U.K.: Stevens & Sons, 1983) at 18.166These two aspects of the context within which one mustdecide whether a labour organization is prohibited underSection 8(a)(2) calls for a searching and rigorous scrutiny ofsuch entities.Such scrutiny, of course, is much easier to articulatethan practice. As noted by the Supreme Court earlier, "[i]twould indeed be a rare case where the finders of fact couldprobe the precise factors of motivation which underlay eachemployee's choice." It is perhaps futile to attemptdetermining whether employee acceptance of a representationplan etc. is the result of a free or coerced choice, in lightof the employer's economic power over employees.Instead, in adopting Section 8(a)(2), Congress made achoice that it would not require the Act's administrators togauge the desires when the issue is whether the labourorganization is employer-dominated or not. Employer dominatedor sponsored labour organizations were considered inherentlywrong. Whether or not employees agree to their subordinationto an employer dominated organization would not be a relevantconsideration. The test would be whether the organization isemployer dominated or interfered with. The answer to the testwould be discerned by analyzing the relationship between theemployer and the organization and, drawing upon experience,deciding whether the organization can function as an effectivecollective bargaining agent. Doubtless, such a per seapproach would have the effect in some instances of denying167employees their sincere and uncoerced choice in bargainingrepresentative. However, erring on the side of empoweringemployees through collective bargaining was the policy choicemade in the N.L.R.A. and it would be difficult to find faultin such a choice. As the Supreme Court stated in NewportNews, "[i]t was for Congress to determine whether, as a matterof policy, such a plan should be permitted to continue inforce."50 As Millis, the former Chairman of the N.L.R.B.between 1940 and 1945, and Montgomery stated:The evidence forces one to the general conclusionthat, although collective bargaining has been foundin exceptional cases [in relations between companyunions and their employers], there has not beenmuch of it in the past between company unions andmanagement in the proper sense of the term. Aftermore or less discussion, when there has beendiscussion at all, what management has wanted to dohas usually been acceptable to the company unions.In any event, the company unions have generallyacquiesced. In only a limited number of cases havethe workers strongly protested, much less revoltedand gone on strike or changed the company unionover into a really independent and a more or lessmilitant trade union.All this one would expect, even without thesubstantial evidence found in many National LaborRelations Board cases, for it is quite obviousthat, even when expected to function as acollective- bargaining agency, the company union isin several respects weak as compared to the typicaltrade union. In the typical case, the workingassumptions are against the presentation and stoutsupport of what workers may really want and feelthey are entitled to in respect of wages and hours.Most company unions have been organized andoperated for the purpose of cooperating, notbargaining with management. In so far as there istruth in the oft-made statement that a union cannotcooperate effectively because of the emphasisplaced upon collective bargaining, there is truth50 Newport News, supra, note 13 at 308 U.S. at 251.168in the statement that a cooperating organizationcannot bargain effectively."It is also difficult to understand how it can logicallybe said that only actual acts of domination or interferencewill attract Section 8(a)(2) censure and that in the absenceof such clear manifestations of domination, employee freechoice will rule the day. The logical difficulty lies in thefact that the more complete the domination the less likelySection 8(a)(2) censure will be attracted. If employees arein the palm of the employer's hand, there will be little needor occasion for the employer to have to exercise his controlovertly and thereby provide a manifestation of actual control.Equally, the less likely it will be that employees will have,or at least exhibit, any misgivings about the nature of theirlabour organization and the relationship it has with theemployer. Thus, the test derived from the Chicago Rawhide -Federal-Mogul - Modern Plastics line of authorities leaves thedoor open for a wide range of abuse. It is to be recalledthat all three cases resulted from findings by the N.L.R.B. -the expert labour relations administrative tribunal - that thelabour organizations at issue were employer dominated.(b) Definition of "labor organization" The second change in Section 8(a)(2) interpretation thatprovides further hope for new industrial relations innovationsH.A. Millis & R.E. Montgomery, Organized Labor (NewYork: McGraw-Hill, 1945) 883.169is the narrowing of the meaning placed on the phrase "labororganization".52 As indicated earlier, the narrower thedefinition of "labor organization" the more limited is theapplication of Section 8(a)(2) since that section onlyprohibits domination and interference of a "labororganization".As the definition in Section 2(5) suggests, a widevariety of entities would fit comfortably within the statutorydefinition. So long as employees participate in the entity insome manner and one of its purposes is to deal with theiremployer over any one of the matters listed in theprovision,53 the entity would be considered a "labororganization".The Board and Courts have generally given the definitionthe wide application suggested by its wording. For example,there is no need for the entity to have any sort of formalstructure or indications of structure such as a constitution,52^For convenience, the definition of "labororganization" found in Section 2(5) is reproduced here:Section 2. When used in this Act -•••(5) The term "labor organization" means anyorganization of any kind, or any agencyor employee representation committee orplan, in which employees participate andwhich exists for the purpose, in whole orin part, of dealing with employersconcerning grievances, labor disputes,wages, rates of pay, hours of employment,or conditions of work.Mercy Memorial Hospital Corp., 231 N.L.R.B. No. 182,1977-78 C.C.H. N.L.R.B. para. 18,546 (1977) at 30,820.170by-laws, regular meetings, membership dues or initiationfees.54 Further, there is no need for the entity to engagein collective bargaining, as traditionally understood. TheSupreme Court has recognized that the operative phrase"dealing with" contemplates a considerably lesser extent ofcontact between the employer and the entity than collectivelybargaining. 55 Thus, the fact that the entity does not make"demands", but rather only suggestions or recommendations tothe employer with no power to secure the employer's agreementdoes not make the entity any less a "labor organization".56Even an association that only presented employee views tomanagement without specifically recommending action formanagement to take was considered to be a "labororganization" .57In G.O. Parachutes, Inc. the Board determined that a54 See, for instance: Fire Alert Co., 182 N.L.R.B. 910(1970) at 912, enforced, 77 L.R.R.M. (B.N.A.) 2895 (10th Cir.1971); N.L.R.B. v. Erie Marine, Inc., 465 F.2d 104 (3rd Cir.1972); Indiana Metal Products Corp. v. N.L.R.B., 202 F.2d 613(7th Cir. 1953) at 621.55 N.L.R.B. v. Cabot Carbon Co., 360 U.S. 203, 37 L.C.65,515 (1959).56 See, for example, Kaiser Foundation Hospitals, Inc.,223 N.L.R.B. No. 51, 1975-76 C.C.H. N.L.R.B. para. 16,719(1976) (registered nurses' committee with the purpose,according to its by-laws, of acting "as liaison betweenregistered nurses and administration...[t]o provide betterunderstanding between staff and administration" found to be"labor organization".); N.L.R.B. v. General Shoe, 192 F.2d504, 20 L.C. 66,696 (6th Cir. 1954).57 Thompson Ramo Woolridge, Inc., 132 N.L.R.B. No. 80(1961).171"Works Committee" was a labour organization since theemployer's stated purpose in announcing its formation was to"to have better communications between employees andmanagement." In Center for United Labor Action, the Boarddetermined that so long as the entity is "expressly orimplicitly seeking to deal with the employer over mattersaffecting the employees" it will be considered a "labororganization."From this brief review, it should be clear that it hasgenerally taken very little for an entity to attract the"labor organization" label. The implications of this forindustrial relations innovations using quality circles andjoint committees is that they would seem to fall squarelywithin the statutory definition. As Kohler states:Under the terms of this definition, the framers'demonstrated intent, and the broad reading it hasbeen given by the Court, joint worker-managementcommittees and like participatory devices plainlyappear to constitute labor organizations for thepurpose of the Act. Employees, of course,participate on these bodies, which exist for theexpress purpose of involving workers withmanagement in making determinations concerning,inter alia working conditions and employeegrievances .56Notwithstanding the attraction of this conclusion, therehave been indications in the jurisprudence, particularly inthe past decade, that a narrowing of the definition is in theoffing in the name of encouraging greater employer-employeecooperation.Kohler, supra, Chapter Three, note 22 at 536.172Perhaps the most significant of these decision is that ofthe Sixth Circuit Court of Appeals in N.L.R.B. v. StreamwayDivision of the Scott & Fetzer Co. .59 In this case an in-plant representation committee, organized and established bythe employer just after one union organizing drive and justbefore another, was found by the Court not to be a "labororganization". The Court determined, contrary to the Board'sfindings, that the committee did not "deal with" the employeras that phrase is used in Section 2(5).The In-Plant Committee was established as a part of theemployer's program to develop "more readily accessiblechannels of communications within Manufacturing Operations"and "to provide coordination between plant personnel andmanagement." The expressed goal of the In-Plant Committee was"to provide an informal yet orderly process for communicatingCompany plans and programs; defining and identifying problemareas and eliciting suggestions and ideas for improvingoperations."Eight employee representatives from various departmentswould be selected and they would be present at a monthlygeneral meeting and their respective monthly departmentalmeeting. Management personnel would be present at each ofthese meetings. Management sought to have as much directemployee input as possible, so the plan had provision forrotation of employees out of representative positions every59 691 F.2d 288, 95 L.C. 13,810 (6th Cir. 1982).173few months. The Court accepted the determination of the Boardthat the In-Plant Committee was interfered with and dominatedby the employer. Thus, if the Committee was a "labororganization", a Section 8(a)(2) violation would beestablished.Purporting to take a more "enlightened view of theAct" ,6° the Court determined the Committee was not a labourorganization. Despite the all-encompassing nature of thelanguage in Section 2(5), and the earlier jurisprudence givingwide meaning to the provision, the Court concluded that it wasstill very much an open question precisely how muchinteraction between employees and management would be requiredto constitute the Committee as a "labor organization" .m TheCourt prefaced its determination of that issue with thefollowing instructive comments:[L]ogic and experience under the Act...dictate thatnot all management efforts to communicate withemployees concerning company personnel policy areforbidden on pain of violating the Act. An overlybroad construction of the statute would be asdestructive of the objects of the Act as ignoringthe provision entirely. Thus there is particularforce in the logic of Judge John Minor Wisdom,dissenting in N.L.R.B. v. Walton Manufacturing Co.,289 F.2d 177, 182 (5th Cir. 1961):To my mind an inflexible attitude ofhostility toward employee committeesdefeats the Act. It erects an ironcurtain between employer and employees,penetrable only by the bargaining agentof a certified union, if there is one,preventing the development of a decent,60 Scott & Fetzer, supra, note 59 at L.C. 22,340.Scott & Fetzer, supra, note 60 at L.C. 22,341.174honest, constructive relationship betweenmanagement and labor. The Act encouragescollective bargaining, as it should, inaccordance with national policy....Theeffect of the Board's policy here is toforce employees to form a labororganization, regardless of the wishes ofthe employees in the particular plant, ifthere is so much as an intention by anemployer to allow employees to conferwith management on any matter that can besaid to touch, however slightly, their"general welfare" •62The Court went on to draw a distinction between what theysaw as a "plan to determine employee attitudes regardingworking conditions and other problems in an accurate andeffective way for the Company's self-enlightenment" from "amethod by which to pursue a course of dealings."63 Whileadmitting that "the difference between communication of ideasand a course of dealings at times is seemingly indistinct, webelieve nevertheless, that it is vital here."64"Dealing", the Court said, "involved a more active,ongoing association between management and employees" than waspresent here where there was a continuous rotation ofemployees onto the Committee. Because of this, the Court feltthe employees were speaking to management directly rather thanthrough a representative committee. This had been a crucialdistinction drawn in the Board's decision in General Foods Scott & Fetzer, supra, note 60 at L.C. 22,341.63 Scott & Fetzer, supra, note 60 at L.C. 22,343.Scott & Fetzer, supra, note 60 at L.C. 22,343.175Corporation65 where it was determined that "employee teams"made up of all the employees in a particular area were not"labor organizations" because the teams did not act in anagency or representative relationship with the employer.Instead, team members would individually raise their concernswith management during team meetings when a managementrepresentative was present.m The essence of a labourorganization, the Board there said, is it standing in anagency relationship to a larger group on whose behalf it iscalled to act. When the team does not act in such an agencyrelationship, but instead acts in essence like a staffmeeting, the team is not a labour organization under theAct.67 The Court in Scott & Fetzer felt this reasoning wasapplicable since the In-Plant Committee system contemplatedevery employee, at some point, serving on the Committee.68The Court also considered the Committee's "limitedfunctions"69 as being significant. These functions weremore a process of determining employee attitudes regardingworking conditions and other problems, than they were pursuitof a course of dealings. The former functions,^as noted122,^1977-78 C.C.H.^N.L.R.B.^para.6518,587231 N.L.R.B.^No.(1977).General Foods, supra, note 65 at L.C. 30,910.67 General Foods, supra, note 65 at L.C. 30,910.68 Scott & Fetzer, supra, note 59 at L.C. 22,343.69 Scott & Fetzer, supra, note 59 at L.C. 22,343.176earlier, were not considered by the Court as constituting"dealing with" the employer.The Court buttressed its conclusion by noting that thiscase had no overtones of an anti-union animus on the part ofthe employer.70 Further, the Court noted as furtherjustification that neither the employer nor the employees feltthe Committee was a labour organization; otherwise they wouldhave held it up as a bar to the organizing union's effort toseek certification of the employees.71The Sixth Circuit Court of Appeals' decision in Scott & Fetzer has come under severe criticism for what has beendescribed as the decision's intellectual dishonesty. Criticshave suggested that it is difficult to understand how theCourt could have reached the conclusion it did, in light ofthe clear wording of the legislation, the clear directiongiven by the Supreme Court in Cabot Carbon, and the similarityof the facts in Scott & Fetzer with that Supreme Courtdecision and other Court and Board decisions where a "labororganization" has been found.72 For example, it isScott & Fetzer, supra, note 59 at L.C. 22,343.Scott & Fetzer, supra, note 59 at L.C. 22,343-44.72^See, for instance, T. Kohler, "Models of WorkerParticipation: The Uncertain Significance of Section 8(a)(2)"(1986), 27 Boston College L. Rev. 499 at 536-38; S.G. Clarke,"Rethinking the Adversarial Model in Labor Relations: AnArgument for the Repeal of Section 8(a)(2)" (1987), 96 YaleL.J. 2021 at 2030-31; R.L. Hogler, "Employee InvolvementPrograms and N.L.R.B. v. Scott & Fetzer Co.: The DevelopingInterpretation of Section 8(a)(2)" (1984), 35 Labor LawJournal 21 at 26-27.177difficult to accept that the employer in Scott & Fetzerintended only to gather the views of the employees and did notintend the next logical step of "dealing with" or acting uponthe information so obtained. Such illogical conduct on thepart of the employer is, however, implicitly assumed by theCourt.Logic and commitment to the principles and policy of theAct therefore cannot explain the Court's decision. One mustlook elsewhere than at the legal principles articulated in thedecision for its rationale. And the Court is very forthrightin identifying its ultimate reasoning when it states: "ourcourt join[s] a minority of circuits indicating that theadversarial model of labor relations is an anachronism."ThThis comment, taken together with the Court's earlier adoptionof the dissent in Walton Manufacturing, clearly shows that theCourt is dissatisfied with legal doctrine and principle rootedin the 1930's that it feels is acting as a hindrance to thedevelop of more cooperative, less adversarial labourrelations. So as to encourage such cooperative ventures, theCourt is willing to revise doctrine and legislation to a moreenlightened level, a level at which the law accommodatesemployers and employees who wish to find a new way to shapetheir relationships.As much as the decision can be criticized for havingScott & Fetzer, supra, note 59 at L.C. 22,342.178forgotten the meaning and basic purposes of the Act,74 thedecision has been applauded in many quarters for itssensitivity to the current needs of employees and the futureof the American economy.m Commentators suggest that theCourt has taken a much-needed bold new step in labour policy.The primary question raised by the developingaccommodation in American labour law for the cooperativeapproach which would include many of the innovations discussedin earlier Chapters is whether the underlying rationale ofthese decisions - that adversarial industrial relations is ananachronism - is an accurate picture of the industrialrelations scene. Has the current system of collectivebargaining - which, history shows, requires for its existencethe type of legislation found in Section 8(a)(2) andA Kohler, supra, note 72 at 545.75 See, for example: B.A. Lee, "Collective Bargainingand Employee Participation: An Anomalous Interpretation of theNational Labor Relations Act - Part I" (1987), 38 Labor LawJournal 206 at 215 ("N.L.R.B. v. Streamway is an importantdecision because...if followed by the Board and federalappellate courts in other circuits, [it] could result insubstantially more employee participation programs being foundacceptable under the N.L.R.A.. The Sixth Circuit's opinionappears to follow industrial trends toward greater cooperationbetween labor and management..."); Klaper, "An "Enlightened"View of Employee Committees Under the Taft-Hartley Act"(1983), 9 Employ. Rel. L. J. 474 (the court's decision istruly enlightened); M.S. Beaver, "Are Worker ParticipationPlans "Labor Organizations" Within the Meaning of Section2(5)?: A Proposed Framework of Analysis" (1985), 36 Labor LawJournal 226 at 237 (although disagreeing with the means bywhich the Court reached its conclusion, the result providesthe needed flexibility "[g]iven the current popularity andgrowth of the worker participation technique and its potentialeffectiveness in alleviating critical productivityproblems.").179Section 2(5) - lost its usefulness and relevancy for Americanworkers and is now only a hindrance to the type of NewIndustrial Relations that will spark America's economicrenewal? If it has, there would be no problem in adoptingthese innovative legal developments. However, if the premiseis wrong, the changes contemplated have to be looked at asless acceptable.If one merely looks at the extent of unionization in theUnited States over the past 30 years, a strong case could bemade that collective bargaining through independent tradeunions has indeed become an anachronism. The number ofunionized workers now represents less than 20 per cent of thenon-agricultural workforce. And estimates of the future oftrade unions is not any more encouraging. By the turn of thecentury it is expected the level of unionization will be lessthan 10 per cent.Balanced against this data is the wealth of literatureand data that indicates that the proper conclusion to be drawnfrom the membership difficulties faced by trade unions in theUnited States is not so much a function of their irrelevancy,but instead the result of a legal apparatus that has made itextremely difficult for unions to survive as effective voicesfor American workers. 76 Thus, the extent of unionization76 See for instance: W.N. Cooke, Union Organizing andPublic Policy: Failure to Secure First Contracts (Kalamazoo,Mich.: W.E. Upjohn Institute, 1985); P.C. Weiler, "Promisesto Keep: Securing Workers' Rights to Self Government Under theNational Labor Relations Act" (1983), 96 Harv. L. Rev. 1769;180cannot be relied upon as an accurate indication of thecontinued relevancy of American union.Such questions about the continued acceptability of basiclabour law doctrines and policy are well beyond the scope ofthis thesis. As noted in the Introduction, one of the goalsof this thesis is to act as a catalyst for that broad debate.Through the preceding pages I have attempted to draw in sharprelief the tension that exists in American labour law andpolicy around the issue of employer domination of andinterference with labour organizations. That tension hasexisted for a number of years. However, the current interestin the New Industrial Relations creates a sense of urgency inresolving that tension. This urgency arises from the factthat, depending on which of the previously discussedjurisprudence American Courts ultimately adopt, the NewIndustrial Relations could be in serious legal difficulties.If the law prior to Chicago Rawhide and Scott & Fetzer isP.C. Weiler, "Striking a New Balance: Freedom of Contract andthe Prospects for Union Representation" (1984), 98 Harv. L.Rev. 351; P.C. Weiler, "Milestone or Tombstone: The Wagner Actat Fifty" (1986), 23 Harv. J. on Legislation 1; P.C. Weiler,"Reflections on the NLRA at Fifty" BNA Daily Labor Rept., No.112, 11 June 1985, p. E-1; U.S. Congress, The Failure ofLabor Law - A Betrayal of American Workers Report of theSubcommittee on Labor-Management Relations of the Committee onEducation and Labor, United States House of Representatives(98th Congress) October 1984; and the testimony and exhibitscontained in U.S. Congress, Oversight Hearings on the Subject"Has Labor Law Failed" (Parts I and II) Joint Hearings Beforethe Subcommittee on Labor-Management Relations of theCommittee on Education and Labor, United States of AmericaHouse of Representatives (98th Congress) 21, 25 & 26 June and3 October 1984, Washington D.C..181given current effect, there is little doubt that many of thecurrent industrial relations innovations will be found asclassic examples of labour organizations illegally dominatedby employers. That older jurisprudence exhibited littlepatience for any employer role in the initiation or continuedexistence of virtually any organization that brought theemployer and employees together in discussions or bargaining.Consequently, all Quality Circles, joint labour-managementcommittees, and semi-autonomous work group programs wouldlikely be found to be employer dominated labour organizations,thus risking disestablishment orders.However, if Courts embrace the developments exhibited inthe Chicago Rawhide and Scott & Fetzer line of cases, the NewIndustrial Relations would clearly be at much less risk.Those cases illustrate an approach that would only findillegal domination in the rarest, most extreme cases.Unfortunately, there are no clear answers to questionsabout the legality of the New Industrial Relations under theheading of employer domination. If anything is clear it isthat the Courts have two distinct, and jurisprudentiallysupported approaches they could take on the issue.(2) Managerial and Supervisory Exclusion One theme that characterizes much of the new industrialrelations literature is the idea of moving authority ordecision- making power within the enterprise to lower levels182in the workplace hierarchy. Members of semi-autonomous workteams and similar bodies, for example, are often delegatedresponsibility to direct production, decide who shall be hiredand discharged and impose discipline. It is possible thatsuch team members could be considered to be in supervisorypositions. Since employees in supervisory positions attractspecial rules under the National Labor Relations Act thatlimits their role in labour organizations," innovations thatpossibly provide employees with that status need particularattention.Similarly, some innovations contemplate employees takinga more active decision-making role in managerial decisionsabout the direction and shape of the enterprise. An issueclosely related to that concerning supervisory employees iswhether such innovations raise employee participants into whatcould be considered managerial positions. Under the impliedmanagerial exclusion that overlays the Act, employees who"formulate and effectuate management policies by expressingand making operative the decisions of their employer" aredenied coverage under the Act.78(a) Supervisors As noted earlier, Section 7 of the Act provides thefundamental rights protected under the Act. By its terms,77 Infra, note 79.Bell Aerospace Co. (1974), 416 U.S. 267 at 288.183such rights are only provided to "employees". Section 2(3) ofthe Act specifically excludes from the definition of"employee" "any individual employed as a supervisor". Theterm "supervisor" is defined under Section 2(11) of the Act inthe following manner:Sec. 2. When used in this Act -(11) The term "supervisor" means anyindividual having authority, in the interestsof the employer, to hire, transfer, suspend,lay off, recall, promote, discharge, assign,reward, or discipline other employees, orresponsibility to direct them, or to adjusttheir grievances, or effectively to recommendsuch action, if in connection with theforegoing the exercise of such authority isnot of a merely routine or clerical nature,but requires the use of independent judgement.Despite not being statutory employees, supervisors arenonetheless free to organize and bargain collectively withtheir employer, and nothing in the Act prohibits an employerfrom voluntarily recognizing a bargaining unit of supervisors,or voluntarily including supervisors in a bargaining unit ofrank-and-file employees.79 However, these can prove to bevery artificial rights for supervisory employees sinceemployers are not prevented by the Act from crushing suchefforts by any of the means contemplated by the Act as unfairlabour practices when practised against statutoryemployees.80 And if the employer does agree to voluntarilyGorman, supra, Chapter Three, note 125 at 35.80 Gregory & Katz, infra, note 81 at 348. An exceptionto the absence of protection for unfair labour practicesoccurs when, for instance, the discriminatory discharge184recognize supervisors, it is under no duty to bargain with thesupervisors. m Clearly, then, there are many risks foremployees who become involved in new industrial relationsinnovations that provide them a degree of authority hithertoonly provided to foremen and other traditional supervisors.The risks for individual employees converted by newparticipatory industrial relations practices into supervisorsis compounded by the problems posed for trade unions whenemployees now considered supervisory under the Act participatein the affairs of the trade union. When participatoryprograms in the workplace create the possibility of arelatively wide array of employees now becoming supervisorsunder the Act, there is a strong likelihood that among thoseemployees will be union activists and other leaders of thetrade union at the workplace level. To the extent this istrue, those now considered supervisors are prevented fromparticipating as union representatives in any activities thatwill put them into contact with the employer, such as being onthe union negotiating team, or dealing with the employer aboutemployee and union grievances. 82 And if, from all theagainst a supervisor was intended by the employer to strikefear into the hearts of statutory employees and therebyinterfere with their rights under Section 7 of the Act. See,for instance, N.L.R.B. v. Talladega Cotton Factory, Inc., 213F.2d 209 (5th Cir. 1954).81 C.O. Gregory & H.A. Katz, Labor and the Law, 3rd ed.(New York, N.Y.: W.W. Norton & Co., 1979) at 348.82^See, for example, Nassau & Suffolk Contractors' Association, Inc., 118 N.L.R.B. 174 (1957) at 184.185circumstances of the case, it is concluded the employee is a"high-ranking" supervisor in the sense that other employeeswould reasonably believe that the supervisory employees wereacting for and on behalf of management, they will not bepermitted to participate in union elections. °As illustrated in the Chapter Two discussion of suchinnovations as semi-autonomous work teams, employeesparticipating on such teams regularly perform functions thatcould be classified as supervisory. For example, team membersevaluate other members, or those who have applied to becomemembers, to determine their eligibility for membership on theteam. Further, team members play an important role indetermining who will be the co-ordinator of the team. Suchclassic indicia of supervision appears to place these teammembers at some risk of being excluded supervisors.Against this argument, however, is the specific langaugeof the Act's definition of "supervisor". Crucial to thedefinition is the prerequisite that the purported supervisorexercise his/her supervisory functions "in the interests ofthe employer". This aspect of the definition would likely beof great assistance to semi-autonomous work team members.Such teams and their members are intended to perform their jobin a relatively autonomous manner. They are intended to drawupon their own skills and knowledge to arrive at decisionsSee, for instance, Nassau & Suffolk, supra, note 82at 184 and Power Piping Co., 291 N.L.R.B. No. 80, 1988 C.C.H.N.L.R.B. para. 15,214 (1988).186which, in their view, are best for the enterprise andthemselves. They are not intended to exercise their decision-making power in a manner that is consistent with what theybelieve is desired by the employer. That is what it means tobe "semi-autonomous". Thus, it may be stretching thestatutory language too far to suggest that team membersexercise their "supervisory" powers "in the interests of theemployer". Unfortunately, there is a dearth of authority onthe issue. However, as we shall see, the United StatesSupreme Court in Yeshiva University m appears to throw coldwater on this argument.(b) Managerial exclusion The so-called managerial exclusion is one not found inthe legislation. Instead, it has developed from a series ofBoard and Court decisions, and articulated with precision bythe Supreme Court in Bell Aerospace.85Managerial employees have been defined by the Board asfollows:[T]hose who formulate and effectuate managementpolicies by expressing and making operative thedecisions of their employer, and those who havediscretion in the performance of their jobsindependent of their employer's establishedpolicy.m84 Infra, note 88.Bell Aerospace , infra, note 86.N.L.R.B. v. Bell Aerospace Co., 219 N.L.R.B. No.42 (1975), on remand from, 416 U.S. 267, 73 L.C. 14,465(1974).187The jurisprudence is clear that the exclusion is notlimited only to those whose policy-making activities touchupon the employer's labour relations policies;87 all personsfalling within the managerial definition are excluded fromprotection of the Act.The exclusion tended over the years to be limited to arelatively small group of executive personnel without muchimpact on union bargaining unit members. However, a 1980Supreme Court decision extended the exclusion further down thehierarchy in a decision that raises concerns for contemporaryindustrial relations practices that seek to develop policythrough consensus among a relatively wide range of employees,including those traditionally protected by the Act.In N.L.R.B. v. Yeshiva University 88 the Board hadpermitted a representation election among university facultymembers over the objection of the University which argued thatall its faculty were excluded managers. The University arguedthat each of their departments were substantially autonomousand within each department the faculty members effectivelydetermined its curriculum, grading system, admission andmatriculation standards, academic calendars and courseschedules 89 Further, the University argued, theoverwhelming majority of faculty recommendations as to faculty87 Bell Aerospace, supra,^note 86 at L.C.^29,491.444 U.S.^672,^87 L.C.^11,819^(1980).89 Yeshiva, supra, note 88 at L.C.^23,340.188hiring, tenure, sabbaticals, termination, and promotion areimplemented."The Supreme Court, in a five-four split, concluded thatthe faculty members were managers and thereby excluded fromcoverage of the Act. The majority determined that thefaculty, through the collegial decision-making process of theuniversity, exercise absolute authority over academic matters.The faculty's total authority is such that, in any othercontext, they unquestionably would be considered managerial.The Court's decision raises serious concerns for a numberof industrial relations innovations currently in use whichprovide a wide range of employees with authority in areas thathave historically been considered domains of managerialprerogatives.91 Certainly if these innovations will resultin employees losing their status as employees under the Act,unions and employees will be much more reticent to becomeinvolved in implementing such innovations. This isparticularly so among professional employees to whom the90 Yeshiva, supra, note 88 at L.C. 23,340.U.S. Department of Labor, U.S. Labor Law and theFuture of Labor-Management Cooperation, BLMR 104, 1988 at 13-16; U.S. Department of Labor, U.S. Labor Law and the Future ofLabor-Management Cooperation - First Interim Report, BLMR 113,Feb. 1987, at 66-68; U.S. Department of Labor, U.S. Labor Lawand the Future of Labor-Management Cooperation - SecondInterim Report, BLMR 119, Oct. 1987, at 108-111; and, U.S.Department of Labor, U.S. Labor Law and the Future of Labor-Management Cooperation - Final Report, BLMR 134, June 1989, at142.189Yeshiva decision may be particularly applicable.92 It isimportant, therefore, to closely examine the Court's reasons.Like most institutions and businesses with a centralgoverning body such as a board of directors, YeshivaUniversity had a Board of Trustees with only one member, thePresident, holding a regular administrative position with theUniversity. In his administrative role the President had fourVice-Presidents reporting to him on matters covering the rangeof University affairs. University-wide policies weredeveloped by this central administration, often with non-binding recommendations from an Executive Council of Deans orSchool Directors and other administrators, and a FacultyReview Committee made up of elected faculty representatives.The central administration developed general guidelinesconcerning such matters as teaching loads, salary scales,tenure, sabbaticals, retirement and fringe benefits. Thethirteen schools or faculties making up the University were,however, substantially autonomous, the Court determined.93Each school's Dean would meet formally and informally withfaculty members, individually and in formal committeestructures, to discuss and decide matters of institutional and92 See, for instance, D. Rabban, "Can American Labor LawAccommodate Collective Bargaining By Professional Employees?"(1990), 99 Yale L. J. 689, and D. Rabban, "DistinguishingExcluded Managers from Covered Professionals Under theNational Labor Relations Act" (1989), 89 Columbia L. Rev.1775.Yeshiva, supra, note 88 at 23,341 L.C.190professional concern, including educational policy, facultysalaries and conditions of employment.The factual determination about faculty decision-makingpower in this structure made earlier in these proceedings wasstated by the Supreme Court:Through these meetings and committees, the facultyat each school effectively determine it curriculum,grading system, admission and matriculationstandards, academic calendars, and courseschedules.Faculty power at Yeshiva's schools extendsbeyond strictly academic concerns. The faculty ateach school make recommendations to the dean ordirector in every case of faculty hiring, tenure,sabbaticals, termination and promotion. Althoughthe final decision is reached by the centraladministration on the advice of the dean ordirector, the overwhelming majority of facultyrecommendations are implemented.94The Yeshiva University Faculty Association applied for abargaining unit consisting of full-time faculty members,excluding deans and directors.The N.L.R.B., in earlier cases dealing with collectivebargaining in a university setting, paralleling recentcommentary generally on the intersection of the N.L.R.A. andthe new industrial relations, acknowledged that the power-sharing that characterizes faculty-university relations "doesnot square with the traditional authority structures withwhich the [N.L.R.A.] was designed to cope in the typicalorganizations of the commercial world."9594 Yeshiva, supra, note 88 at 23,341.95 Adelphi University, 195 N.L.R.B. 639 (1972) at 648.191The N.L.R.A. traditionally excludes from collectivebargaining those who have managerial decision-making power.However, the Board reasoned that such principles developed foruse in the industrial setting cannot be "imposed blindly onthe academic world"96 where there has been a strong andvibrant institutional history of collegial decision-making.Such collegial governance has been a key distinguishingfeature of academic institutions when compared withtraditional business organizations.97 Consequently, theBoard ruled that faculty members were "professional employees"under the N.L.R.A. and therefore entitled to the protectionand benefits of the N.L.R.A..The Board rejected application of traditional doctrinesrelated to managerial exclusions on the following threegrounds: "faculty participation in collegial decision-makingis on a collective rather than individual basis, it isexercised in the faculty's own interest rather than 'in theinterest of the employer' [to use the language in the Act'sdefinition of excluded "supervisor" in Section 2(11)], andfinal authority rests with the board of trustees."98The Supreme Court, in reversing the Board, began theirconsideration by articulating the definition of managerialemployees found in the Court's earlier decision in N.L.R.B. v.96 Syracuse University, 204 N.L.R.B. 641 (1973) at 643.97 Yeshiva, supra, note 88 at 23,342.98 Yeshiva University, 221 N.L.R.B. 1053 (1975) at 1054.192Bell Aerospace Co." (employees who "formulate and effectuatemanagement policies by exercising and making operative thedecisions of their employer" 100 ) and extended it by adding,"normally an employee may be excluded as managerial by takingor recommending discretionary actions that effectively controlor implement employer policy.fool The Court also mentionedthat the managerial exclusion, like the supervisory exclusionfound expressly in the legislation, arises from the concernthat "an employer is entitled to the undivided loyalty of itsrepresentatives. ,,102The Court rejected the only line of defence the Board putforward when the matter was argued at the Supreme Court. Thatdefence was based on what the Court termed as the "alignmentwith management" criterion.103 The Board admitted that thefaculty's decision-making power was significant enough to havethem classified as management. However, the Board argued thatthe managerial exclusion could not be applied in astraightforward manner in this context. The status ofemployees exercising apparently managerial functions, theBoard argued, must be determined by whether or not they" 416 U.S. 276 (1974).loo Bell Aerospace, supra, note 86 at 288 (quoting PalaceLaundry Dry Cleaning, 75 N.L.R.B. 320 (1947) at 323 n. 4).101 Yeshiva, supra, note 88 at 23,343.102 Yeshiva, supra, note 88 at 23,343.103 Yeshiva, supra, note 88 at 23,343.193exercise their decision-making power in the interests of theemployer, characterized by an express or implied requirementthat such decisions conform to policies articulated by theemployer. If, instead, the decision-making power is exercisedin accordance with independent professional judgement,unfettered by a need to accommodate the employer's policies orinstitutional interests, then that decision-making power doesnot raise the conflict of interest concerns underlying themanagerial exclusion. 104The Court rejected this argument in the following terms:The controlling consideration in this case is thatthe faculty of Yeshiva University exerciseauthority which in any other context unquestionablywould be managerial. Their authority in academicmatters is absolute. They decide what courses willbe offered, when they will be scheduled, and towhom they will be taught. They debate anddetermine teaching methods, grading policies, andmatriculation standards. They effectively decidewhich students will be admitted, retained andgraduated. On occasion their views have determinedthe size of the student body, the tuition to becharged, and the location of a school. When oneconsiders the functions of a university, it isdifficult to imagine decisions more managerial thanthese. To the extent the industrial analogyapplies, the faculty determines within each schoolthe product to be produced, the terms upon which itwill be offered and the customers who will beserved. 105Dealing specifically with the Board's argument, the Courtmechanistically rejected the criterion proposed by the Boardon the basis of a lack of authority for the propositions104 Yeshiva, supra, note 88 at 23,343.105 Yeshiva, supra, note 88 at 23,343-44.194underlying it. The Court pointed to Board decisions in whichprofessional were excluded as managers "without inquiringwhether [the professionals'] decisions were based onmanagement policy rather than professional expertise.'oaf,The Court then stated:Moreover, the Board's approach would undermine thegoal it purports to serve: To ensure thatemployees who exercise discretionary authority onbehalf of the employer will not divide theirloyalty between employer and union.The Court explained that, in its view, there is no distinctionbetween the professional self interests of faculty members andthe interests of the institution. The predominant policyobjective of the institution is to operate a high-qualityacademic institution that will accomplish broadly definedacademic goals within the limits of its financial resources."Faculty members enhance their own standing and fulfil theirprofessional mission by ensuring that"107 this objective ismet.[T]here can be no doubt that the quest for academicexcellence and institutional distinction is a"policy" to which the administration expects thefaculty to adhere, whether it be defined as aprofessional or an institutional goal. It isfruitless to ask whether an employee is "expectedto conform" to one goal or another when the two areessentially the same.08Not only are the goals of the faculty and thenote 88 at 23,344.106 Yeshiva, supra,107 Yeshiva, supra, note 88 at 23,344.108 Yeshiva, supra, note 88 at 23,344.195administration the same, the Court stated, but facultyparticipation in the development and implementation of policyaimed at enhancing academic and institutional excellence is acrucial element in achieving that goal. The consequentialindependence and use of discretionary power enjoyed by facultyin achieving the institution's goals, however, requires thatthe faculty not be permitted to organize into an independenttrade union. The Court explained this conclusion:The problem of divided loyalty is particularlyacute for a university like Yeshiva, which dependson the professional judgement of its faculty toformulate and apply crucial policies constrainedonly by necessarily general institutional goals.The University requires faculty participation ingovernance because professional expertise isindispensable to the formulation and implementationof academic policy....The large measure ofindependence enjoyed by faculty members can onlyincrease the danger that divided loyalty will leadto those harms that the Board traditionally hassought to prevent. 109The Court specifically rejected the perhaps logicalconclusion that the managerial exclusion would apply to allprofessional employees. In doing so, the Court articulatedthe following test: "[o]nly if an employee's activities falloutside the scope of the duties routinely performed bysimilarly situated professionals will he be found aligned withmanagement. The Court found that at Yeshiva Universitythe faculty "in effect, substantially and pervasively109 Yeshiva, suora, note 88 at 23,344-45.110 Yeshiva, supra, note 88 at 23,345.196operat[e] the enterprise. This is not a role, the Courtimplicitly concluded, in which professional employeesroutinely find themselves, thus warranting the determinationthat the faculty were part of management and excluded from theprotection afforded by the N.L.R.A..In short, the Court's conclusions left the implicationthat employees who have a substantial influence over how theiremployer's business will operate will be excluded from thedefinition of "employee" under collective bargaininglegislation and, consequently, its protection. This is sonotwithstanding that the employment and institutionalrelationship at issue anticipates that the employees willexercise the power they have in their own interests and in theinterests, as they perceive it, of the institution. And thisis so notwithstanding that the institution or employer needsthe employees to have that power and exercise in the mannerthe employees see fit in order for the institution to flourishas an esteemed academic institution.The parallels are strong between the power relationshipsat work at Yeshiva University and those advocated by the NewIndustrial Relations literature. This literature anticipatesthat employees in employment relationships outside theacademic environment will be characterized by an empowermentof employees to an extent approaching that of faculty atYeshiva University. How products are to be produced, who willYeshiva, supra, note 88 at 23,345.197be employed to produce them, solving administrative andproduction problems of the enterprise, as well as determiningtraditional personnel issues like assigning work andscheduling overtime and vacations, are all areas wheresignificant employee involvement is prescribed. 112 And likeYeshiva University, employers need such labour relationspractices in order to flourish as a competitiveenterprise. 113Concern over the effect of the Yeshiva decision may beunwarranted in that its application may well be limited toacademic institutions where empowerment of employees/facultyis unusually strong. Indeed, the vast majority of laterdecisions of the Board and the courts in which Yeshiva wasconsidered at all werecases considering facultyunionization. 114 However, this apparently limitedapplication may be more a function of the limited experience112 See, for instance, the relationship relied upon inmuch of the literature as the prototype for innovative labourrelations at Shell Oil in Sarnia, Ontario, with the Energy andChemical Workers' Union, Local 800 as described in C.Heckscher, The New Unionism: Employee Involvement in theChanging Corporation (New York: Basic Books, 1988) at 138-47and T. Rankin, New Forms of Work Organization: The Challengefor North American Unions (Toronto: University of TorontoPress, 1990) at 60-75.113 See discussion, supra, Chapter 2.114 For a listing of a large sample of such decisions toearly 1987, see the Commerce Clearing House, Inc. listpublished in Labor Law Reports Insight, No. 2, Issue 6 (March1987). A more comprehensive listing was obtained by theauthor through a Westlaw computer assisted research searchconducted in January, 1990.198American industry has had with highly participative forms ofmanagement. It appears that when industries outside theacademic sphere begin to adopt university-like managementstructures, the Yeshiva decision enters the equation. And asthe Board made clear in five decisions issued in 1982,employees exercising substantially less authority than thatheld by faculty at Yeshiva University will nevertheless becaught by the managerial exclusion. 115The Board's decision in FHP Inc. and Union of AmericanPhysicians and Dentists116 exemplifies the broaderapplication of the Yeshiva decision beyond academicinstitutions, as well as illustrating that employees need notbe involved in the total management of the enterprise in orderto be excluded under the Yeshiva doctrine.The employer operates seven medical/dental clinics insouthern California, employing approximately 70physicians/dentists who sought unionization. The employerestablished a variety of permanent and ad hoc committees todeal with a variety of management and professional developmentissues. Among the permanent committees are the Peer ReviewCommittee (dealing with the quality of care provided by115 Duquesne University of the Holy Ghost, 261 N.L.R.B.587 (1982); Thiel College, 261 N.L.R.B. 569 (1982); IthacaCollege, 261 N.L.R.B. 577 (1982); Montefiore Hospital andMedical College, 261 N.L.R.B. 569 (1982); and BradfordCollege, 261 N.L.R.B. 565 (1982).116^274 N.L.R.B. No. 168, [1985-86] C.C.H. N.L.R.B.17,229.199physicians/dentists through twice yearly individual reviewsresulting usually in recommendations for either pay incrementsor discipline which have always been followed by management),the Advisory Committee on Provider Work Environment (dealingwith physical work environment issues, as well as compensationpackage issues, through biweekly meetings resulting inrecommendations to management that are regularly implemented),and the Advisory Committee to the Board of Directors (dealingin quarterly meetings with issues regarding the direction ofthe enterprise, including issues of wages, benefits andworking conditions, which are then passed on to theenterprise's Board of Directors with unknown success inacceptance). From time to time committees are struck to dealwith specialized objectives which have, on occasion, resultedin acted-upon recommendations concerning such matters ascompensatory time-off and staffing levels.Each of the permanent committees had rotating membershipsdrawn from the physicians and dentists employed at theclinics. During the five years immediately preceding theBoard's decision, over half of the currently employed doctorsserved in the committee structure.Management has a representative on each permanent and adhoc committee, although there was no evidence they took aleadership role on the committees.Against this background, the Board held that the doctorswere not eligible for collective bargaining under the Act,200based on the Yeshiva doctrine. While acknowledging that thedoctors' lacked influence over management decision-making insuch crucial areas as premiums to be charged clients, salariesfor doctors and hiring decisions117, the Board determinedthat "many of the decisions made...at the committeelevel.. .lie at the core of the [enterprise's] operations.The Board emphasized participation in the following typesof decisions as justifying its decision: "managing theorganization's protocol system, overseeing its medical recordssystem, setting its medicinal prescription policy, reviewingand modifying the benefits and working conditions of itsstaff, establishing procedures and staff training for medicalemergencies, and minimizing the institution's risk of medicalmalpractice liability" 119.The confluence of participation in decision-makingthrough these varied areas led to the Board's conclusion that"the committees perform managerial functions within themeaning of the Yeshiva decision. 11120 Yeshiva, the Boardstated, required exclusion of those who formulate andeffectuate management policies by expressing and makingoperative the decisions of their employer through taking orrecommending discretionary actions that effectively control or117 C.C.H. N.L.R.B. at 29,635.118 FHP, supra, note 116 at 29,635 C.C.H. N.L.R.B..119 FHP, supra, note 116 at 29,635.120 FHP, supra, note 116 at 29,635.201implement employer policy.Leaving aside the issue of in whose interests the doctorsrecommend decisions on these committees, the Board's reasoningdoes not address why all doctors are excluded when only aportion of them act on the committees at a given time. In theyear immediately preceding the doctors' application forcertification, 38 of 70 full-time doctors served on acommittee. While the decision does not provide details, it isto be presumed that, with the number of doctors serving oncommittees, few doctors served on more than one committee atone time. It is therefore difficult to appreciate how theBoard reached the conclusion implicit in its decision thateach full-time121 doctor was an arm of management. Eventhose on a committee, assuming no overlap of membershipbetween committees, would have no individual and independentpower which could credibly classified as managerial.Nevertheless, the Board found the doctors ineligible forcollective bargaining, leaving the implication for futurecases that industrial relations strategies that encompassbroad employee involvement on advisory committees mayjeopardize the employees' ability to partake in collectivebargaining sanctioned under the National Labor Relations Act.A gap in representation of employee interests thereforeexists. When employees have no participation on advisory121 The Board concluded that the part-time doctors onstaff could collectively bargain since they were not eligibleto serve on any committee. FHP, supra, note 116 at 29,635.202committee structures within their workplace, they are eligiblefor collective bargaining, thereby providing the employees adegree of power to assert their interests. However, when someof their numbers are involved in advisory committees, theemployees as a whole lose their eligibility for collectivebargaining if the advisory power has historically shownitself, in this workplace, to have a power of effectiverecommendation. In other words, if the advice is usuallytaken by the employer in governing its enterprise anddeveloping its operational policies, the employees providingthat advice, and the employees as a whole, are consideredmanagerial. This is so, notwithstanding that the employeralways retains the option in its committee structure to rejectthe advice provided.It is therefore folly to describe the employees as havingpower in the sense of being able to place force on theemployer in an effort to compel the employer to act in amanner it would otherwise reject. Any power the employeeshave in this advisory committee structure is based on the goodwill of the employer towards the employees and the advisorycommittee system, a good will that may not necessarily becounted on when the employer believes its interests are beingundermined, as they may be when the committee deals withmatters traditionally the subject of collective bargaining.Therefore, the Board's denial of collective bargaining incases of advisory committees with the power of effective203recommendation is not entirely satisfactory if the interestsof employees are to be protected.One concern raised earlier, in the discussion of theYeshiva decision, was whether that decision would result inall professional employees becoming ineligible for collectivebargaining since many have a power of effective recommendationon issues that require drawing upon their specific expertise.The Board in FHP, consistent with the directions of theSupreme Court in Yeshiva, indicated that the use ofprofessional discretion, by itself, would not be sufficientfor employees to be classified as managerial. But theinfluence the doctors in FHP exercised through the committees,the Board determined, was outside the scope of decision-makingroutinely performed by similarly situated professionals.Thus, the Board held, the decision making power through thecommittee warranted the denial of collective bargaining forthese individuals.While this aspect of the decision may act as a limitationon the possible broad application of Yeshiva to professionalemployees, its application in this case leaves concern whetherthe limitation is more imaginary than real. The types ofissues dealt with by the committees appear to be preciselythose which doctors are routinely asked to draw upon theirprofessional expertise to resolve.For example, the Peer Review Committee calls upon doctorsto monitor the quality of care provided to patients and to204recommend changes to procedures, or protocol, in providingmedical services. The Physician and 'Therapeutics Committeekeeps abreast of the professional literature and newmedications, as well as monitors doctors' prescriptionpractices. The Emergency Services Committee deals withplanning the facility's ability to deal with medicalemergencies. The Patient Services Committee investigates allreports of medical malpractice. The Advisory Committee to theBoard of Directors "charts the direction of the healthmaintenance organization"122 which includes makingrecommendations regarding wages, benefits and workingconditions of the organization's staff. The AdvisoryCommittee on Provider Work Environment considers plans tobetter use the organization's medical facilities and supportstaff, and includes making recommendations concerning theorganization's compensation package.The pervasive theme throughout these committee functionsis the necessity for the doctor-members of these committees toemploy their medical expertise and judgement in order toeffectively exercise these functions. Doctors must routinelyexercise such professional judgement and discretion. However,the exercise of such discretion in the context of committeeswithin a health organization is considered by the Board to beoutside the routine exercise of professional discretion. Sucha determination does not bode well for how the Board will122 FHP, supra, note 116 at 29,634.205apply its criteria in the cases of other professionals. Andcertainly the limitation above described will not beapplicable when committee structures are used in non-professional settings where the provision of discretion tosuch employees has little historical antecedents.The Yeshiva doctrine was thought, by its early usage, toapply only to initial applications for certification where theemployees were not previously unionized. This limitation hasalso proven to be imaginary. Currently unionized employeescan lose their status as "employees" under the Act if, duringthe course of their relationship with their employer, theybecome sufficiently empowered to fall within the Yeshiva definition of managers. Significantly, it appears not tomatter that empowerment came as a result of the employer'sunilateral provision or, instead, through the union's hard-fought collective bargaining skirmishes with the employer.For example, in College of Osteopathic Medicine and Surgerym the Board was faced with an employer's applicationto revoke the certification granted six years earlier to aFaculty Federation. The employer argued, relying on Yeshiva,that its employees were now managerial in that they hadauthority, through the College's faculty committees, verysimilar to that held by the faculty at Yeshiva University.Unlike Yeshiva University, however, the authority of the123^265 N.L.R.B. No. 37, [1982-83] C.C.H. N.L.R.B.15,330.206faculty committees was not freely provided by the College, butwas rather was gained and maintained through an adversarialprocess of collective bargaining over the years. Absent thecertified union, it is unlikely the faculty would be permittedby the College to maintain their authority. Thesecircumstances, the faculty argued, distinguished the case fromYeshiva since here it was recognized by the parties that thefaculty was not exercising its authority specifically in theinterests of the employer since the authority was derivedthrough the adversarial process. Further, application ofYeshiva in this case would have the highly unusual effect ofdisqualifying employees from unionization solely because oftheir success in bargaining, and consequently placing them ina vulnerable position in which they would likely lose theauthority that caused them to lose that eligibility tounionize. Such a result would be absurd, the facultyargued. 124The Board, although clearly feeling uncomfortable doingso, applied the logic of Yeshiva to declare the faculty asbeing managerial. The source of the faculty's authority wasnot the Board's concern; the sole issue was whether thefaculty had effective authority in the manner outlined inYeshiva. There being little doubt on that issue, the Boardrevoked the certification. Recognizing that this decision124 College of Osteopathic Medicine, supra, note 123 at26,086.207would likely result in the faculty losing the authority thathad made them managerial, the Board stated it would deal witha future certification application in a expedited manner.125Clearly, the Board's decision in College of OsteopathicMedicine places unionized worker in a no-win situation whichwill discourage their involvement in employee-participationschemes whether they are initiated freely by the employer orare obtained through collective bargaining. To the extentemployees gain meaningful participation in organizationaldecision-making, whether through collective bargaining or thegenerosity of the employer, they forfeit their rights underfederal labour law. 126Aside from these difficulties with the internal reasoningof the Yeshiva doctrine, criticism of the doctrine itself hasbeen stinging.The primary, and perhaps most damaging criticism of thedoctrine relates to the failure to distinguish betweenbureaucratic authority and authority that arises from thevoluntary acceptance of the expertise of those offering adviceor making recommendations. This criticism has arisen in thecontext of professional employees so as to isolate thedeleterious effects of the Yeshiva decision on the13 College of Osteopathic Medicine, supra, note 123 at26,087-126 D. Rabban, "Distinguishing Excluded Managers fromCovered Professionals under the NLRA" (1989), 89 Columbia L.Rev. 1775 at 1827.208unionization of professional employees. As such, thedistinction may be perceived as having limited application toemployees lacking professional credentials. After outliningthe criticism, however, it will be argued that the distinctionis also valid for employees partaking in the employee-involvement industrial relations innovations discussed inChapter Two who, although lacking in professional credentials,are nevertheless accorded authority by the operation ofinnovations which value employee participation in workplacedecision-making. The broader point to be made from sucharguments is, of course, that the Yeshiva doctrine should onlyapply when the employees at issue have bureaucratic authority,as opposed to authority arising from the voluntary acceptanceof their advice and recommendations.Professor Rabban is the leading critic of the effectYeshiva has had on collective bargaining by professionalemployees. He reports that the decision has all but stifledunion organizing on United States college and universitycampuses127 and, as a result of the FHP decision and other127 D. Rabban, "Distinguishing Excluded Managers fromCovered Professionals Under the N.L.R.A." (1989), 89 ColumbiaL. Rev. 1775 at 1824-26. See also, "Distinguishing Yeshiva:A Troubling Task for the N.L.R.B.", Newsletter of the NationalCenter for the Study of Collective Bargaining in HigherEducation and the Professions (Baruch College, City Universityof New York) Aug./Sept. 1982, and "Yeshivawatch - Year Nine"Newsletter of the National Center for the Study of CollectiveBargaining in Higher Education and the Professions, Nov./Dec.1988.209Board decisions giving broad reign to the managerialexclusion, Yeshiva threatens to chill the organization ofprofessionals outside the academic environment.128 This isso despite the express provision in the Act allowingprofessional employees to organize.129Rabban distinguishes the authority held by the main bodyof practising professionals with what he refers to as"bureaucratic authority" held by a few professional who managethe body of professional employees working for a particularemployer. It is the difference between "managerial"professionals and "practising" professionals. Managerialprofessionals hold positions of bureaucratic power within theformal hierarchy of an organization.130 Practisingprofessionals, by contrast, do not hold positions ofbureaucratic power, but, instead, in order for their employerto satisfactorily draw upon their professional skills inperforming the employer's operational work, they must retainsubstantial autonomy or power in their day to day work.131Further, their expertise within their profession is valued andthus taken strongly into account by managerial professionals.128 Rabban, supra, note 126 at 1831-32.129 National Labor Relations Act, supra, Chapter One note12, Section 9(b). See, in this regard, D. Rabban, "IsUnionization Compatible With Professionalism?" (1991), 45Industrial and Labor Relations Review 97.130 Rabban, supra, note 126 at 1835.131 Rabban, supra, note 126 at 1835.210Consequently, strict hierarchical management and disciplinarystrategies that are common among workplaces employingunskilled or semi-skilled employees becomes dysfunctional whenapplied in the context of practising professional employees. 132The control on the use of discretion by practisingprofessionals comes instead from their own professionalstandards which have been internalized and are reinforced bytheir colleagues. Managerial professionals share theseprofessional standards and, while recognizing theirbureaucratic role of ensuring that the work of practisingprofessionals meets the organization's goals, they treat thepractising professionals as their professional equal,recognizing the professional values of autonomy, collegialityand organizational influence. 133The key distinction between managerial professionals andpractising professionals, in terms of influence in theorganization, arises on issues of financial control over theorganization, relations with outside individuals andorganizations, and in monitoring the use of professionaldiscretion of the practitioners. The bureaucratic authorityof managerial professionals leaves these matters generally tothem. 134 Notwithstanding the narrowness of managerialauthority, the relations between bureaucratic professionals132 Rabban, supra, note 126 at 1840.133 Rabban, supra, note 126 at 1841.134 Rabban, supra, note 126 at 1841-44.211and practising professionals are prone to conflict. First, oneconomic issues, practising professionals share the samedifficulties as their blue-collar brethren and sisters inhaving their perspective on fair wages and working conditionsaccepted by a management that often has its own priorities forexpenditures which are often at odds with the interests of thepractising professionals.135 Second, practising professionalsmay well have different interests than that of theorganization on issues of overall organization policydirection, ranging from the operating structure of theorganization to the demarcation lines between the jurisdictionof some professionals as against others.136 Third, managerialstyle may serve to lessen or exacerbate the conflict felt inthe previous two areas.The existence of managerial authority in the hands ofbureaucratic professionals leaves to their discretion how thatauthority will be exercised. While, as earlier stated,professional standards and notions of collegiality tend toencourage a management style that is consultative andconsensus-oriented, the option is ultimately that of themanagerial professionals as to how that authority will beexercised. 137Rabban's analysis concludes with the proposition that the135 Rabban, supra, note 126 at 1847-49.136 Rabban, supra, note 126 at 1850-51.137 Rabban, supra, note 126 at 1851-52.212proper demarcation line between managerial personnel whocannot gain protection under the N.L.R.A. because of Yeshivaand professionals who should be granted the Act's protectionis the line between managerial professionals and practisingprofessionals. Those with bureaucratic authority (i.e.,managerial professionals) would be unprotected by the Act,while practising professionals, no matter how influential theyare in the decision-making processes of particularenterprises, should be granted the Act's protection. Thoseprofessionals with bureaucratic authority pose problems ofdivided loyalty as between the employer which relies upon themto further the goals of the enterprise and the union whosepurpose is to further the goals of the union membership.Furthering the goals of the union membership may at timescoincide with furthering the goals of the employer, but thiswill not always, or even often, be the case. Thus, thereneeds then to be some dividing line between those who possessbureaucratic authority and those who do not in terms of who isentitled to unionize. The line drawn by Rabban seeks torecognize this need. Yet, clearly, the intent of the linedrawn by Rabban is to ensure as many professionals as possibleare able to take advantage of the rights established underfederal labour legislation while still remaining faithful toYeshiva.Despite this apparent minimizing of Yeshiva's effect, theneed to exclude managerial personnel from protection under the213N.L.R.A. begs the question why managerial personnel should bedenied the rights provided to employees generally under theAct. The fact that the employer relies on such managerialpersonnel to be its head and hands at the workplace, thuscreating compelling reasons why employers seek the undividedloyalty of such personnel, does not address the fundamentalquestion of whether such personnel are unquestionably loyal totheir employer. It is apparent such personnel share many ofthe same conflicting interests with their employer that isrecognized in less influential employees who are thereforeenabled to collectively bargain under sanction of federallegislation. 138 Usually individual managerial personnelpossess more individual bargaining power than individuallower-level employees. But such individual managerialpersonnel bargaining power likely pales in comparison to thebargaining power of lower-level employees who are able, bylaw, to collectivise their individual bargaining power andface their employer as one. In light of their personalinterests conflicting with that of their employer, and thelimited nature of their individual bargaining power, shouldnot such managerial personnel be able to collectivise theirbargaining power under sanction of the law? Do they notsuffer from the same type (albeit, perhaps to lesser degrees)of problems that prompted legislative protection of lower-138 Rabban, supra, note 126 at 1786. See also, PackardMotor Car Co. (1945), 61 N.L.R.B. 4 at 19.214level employees in efforts to protect their interests? Inprinciple, it would be difficult to argue they should not beentitled to the Act's protection. But we are neverthelessfaced with the practical problem that employers would face ifmanagers and rank and file employees could together bargainwith their employer as one. This legitimate problem foremployers, however, need not result in managerial employeesbeing disentitled under the Act; at most, it provides animpetus for the creation of separate bargaining units, one formanagerial personnel and one for rank and file personnel.Such an issue, however, is beyond the scope of thispaper. Our present concern is whether the state of thecurrent law, which clearly recognizes exclusion of managerialpersonnel from the Act's protection, presents substantialroadblocks to industrial relations innovations that deeplyinvolve rank and file employees in the decision-makingprocesses of the enterprises for which they work. Asindicated above, the Yeshiva decision and its progeny castsdoubt over whether employees involved in such participatoryindustrial relations practices lose their protection under theAct. But can the distinction drawn by Rabban to professionalemployees to narrow the impact of Yeshiva be applied also torank and file employees involved in such innovations? Suchnarrowing would clearly enhance the acceptability of suchinnovations to trade unionists.A strong argument can be made that the distinction is215valid for more generalized use.The heart of the distinction Rabban draws betweenmanagerial and professional employees is the qualitativedifference in power each group has in the enterprise.Managerial professionals have "real" power, or bureaucraticpower, in the sense that they bear ultimate responsibility tothe owners for the enterprise's performance and whether theenterprise meets the broad organizational goals established bythe owners. Consequently, they have the final say, as betweenthemselves and the other employees, over crucial issues suchas the enterprise's financial picture, relations with outsideparties such as creditors, suppliers and customers, andoverall coordination of the day to day activities of theenterprise. As professionals with an ethic of collegialdecision-making, however, such managers will seek to dispersedecision-making authority to the lower levels of theenterprise encompassing practising professionals. Such aprocess is necessary in order to effectively to tap theprofessional expertise of the practising professionals. Thisdecision-making authority, however, must not be confused with"real" power, or bureaucratic authority, ultimatelyexercisable by the managerial professionals to controlperceived excesses in discretion exercised by practisingprofessionals.Similarly, in workplaces practising innovative industrialrelations techniques which spread power downwards and then216horizontally, a distinction can be drawn between the "real"power, or bureaucratic authority, exercised by management andthe power given by management to the employees through theseinnovations. Like the case of practising professionals, ifthe enterprise is to reap the economic benefits from theseinnovations, including productivity increases and boostedmorale, the rank and file workers must be given a fair measureof autonomy and discretion. And like the case of managerialprofessionals, industrial management will normally retainultimate authority over crucial issues such as theenterprise's financial picture, relations with outside partiessuch as creditors, suppliers and customers, and overallcoordination of the day to day activities of the enterprise.Further, industrial management will retain authority tocontrol perceived excesses in discretion exercised by rank andfile employees. Admittedly, for both managerial professionalsand industrial management there will be disincentives toexercise such ultimate authority in a manner inconsistent withthe autonomy and discretion of the practising professionals orrank and file workers. But such disincentives must not beconfused with a notion that such professionals or workers have"real" power sufficient to create in them the type of dividedloyalty problems for employers experienced with managerialprofessionals or industrial management.Consequently, as with practising professionals, Yeshiva'seffect can be legitimately narrowed in industrial217establishments using participative innovations so as only toinclude within its ambit those who are empowered to exercise"real" or bureaucratic authority. This would likely have theeffect of making these innovations more palatable to tradeunions members concerned about losing the protection andrights under the Act by their participation in theseinnovations.The question posed by the Yeshiva University decision,however, is whether it imposes a legal barrier for unions andemployees in throwing their support behind such innovations.Unions will not be interested in labour relations practicesthat threaten to disentitle its members from unionrepresentation. And employees may be unwilling to abandon anyprospect of gaining union protection for innovative labourrelations practices which, although empowering, lack theinstitutional security of legally enforced collectivebargaining. It should not be thought, however, that this moreadvanced issue is of central concern to unionists at thisstage in the United States when their very existence isthreatened. The concern will become real, however, in theevent that unions gain general strength in the United Stateseconomy.(3) Exclusivity doctrine The last potential legal impediment to adoption ofinnovative industrial relations strategies to be considered is218that created by the status of a trade union as the exclusivebargaining agent on behalf of all members of a bargainingunit.The differing philosophical base for the exclusivitydoctrine, as compared to the participative industrialrelations innovations, hints strongly that the legal doctrinewill be at odds with encouraging adoption of theseinnovations. The exclusivity doctrine looks with suspicionupon individual direct dealings between the employer andbargaining unit members, on the understanding that theimbalance in bargaining power between the two makes anyresulting arrangement more advantageous to the employer thanthe individual employee. 139 As established in Chapter Three,the exclusivity doctrine resulted from a recognition thatindividual dealings between employer and isolated employeesgenerally subjected employees to oppressive terms andconditions of work. 140 Such problems were to be remedied bycompelling employers to deal with employees as one, through anexclusive bargaining agent. New industrial relationsinnovations, however, are premised on the value obtained by139 See, for instance, J.I. Case Co. v. National LaborRelations Board (1944), 321 U.S. 332 where the Court stated asfollows: "[t]he practice and philosophy of collectivebargaining looks with suspicion on such individualadvantage.. .They are a fruitful way of interfering withorganization and choice of representatives..."140 See, for instance, R. Gorman, Labor Law: Unionizationand Collective Bargaining (St. Paul, Minn.: West, 1976) at379.219employers and employees through direct individual employeeparticipation in the decision-making processes of theworkplace. They focus upon the individual worker in smallgroups or teams as the fundamental building block formanagement labour policy in the workplace.Section 9(a) of the National Labor Relations Act lays thebasis for the doctrine of trade union exclusivity:Section 9 (a). Representatives designated orselected for the purposes of collective bargainingby the majority of the employees in a unitappropriate for such purposes, shall be theexclusive representatives of all employees in suchunit for the purposes of collective bargaining inrespect to rates of pay, wages, hours ofemployment, or other conditions of employment...These words are followed with a proviso which appears, onits face, to provide some scope for individual dealing betweenemployer and employee. This proviso states as follows:Provided, That any individual employee or a groupof employees shall have the right at any time topresent grievances to their employer and to havesuch grievances adjusted, without the interventionof the bargaining representative, as long as theadjustment is not inconsistent with the terms of acollective-bargaining contract or agreement then ineffect: Provided further, That the bargainingrepresentative has been given opportunity [sic] tobe present at such adjustment.The interpretation placed on Section 9(a) as a whole, however,has provided wide berth to trade union exclusivity, with theproviso having minimal effect.The question of particular concern at the intersection ofexclusivity and the new industrial relations is whether thetheme of the New Industrial Relation on individual and small220group dealing will result in such practices being renderedillegal. We have earlier considered, under the heading"Employer domination", the risk of illegality in circumstanceswhere there is no certified trade union in place and theemployer has instead implemented some form of employee-participation scheme that falls within the definition of"labor organization" under Section 2(5) of the Act.Consideration of the exclusivity doctrine, however, assumesthere is a trade union in place which was designated orselected with majority support within the bargaining unit; itis only then that the trade union is accorded exclusive statusunder Section 9(a). Further, the exclusivity doctrine onlybecomes a potential impediment if the trade union at issuedoes not support the particular employee-participation programin place; if the exclusive bargaining agent agrees with theemployer's implementation of the program or innovation, anyissue related to the union's exclusive status disappears.Thus, the following consideration of the legalimplications of exclusivity on new industrial relationsinnovations assumes there is a trade union in place which doesnot approve of the implementation of a direct employee-participation program. This latter assumption is not far-fetched in that the trade union literature is replete withconcern, and even disdain, about the adverse trade unionorganizational effects of such innovations, as well as theirpotentially damaging effects on the protection of employee221interests. 141The United States Supreme Court made its firstsubstantial comments on the doctrine of trade unionexclusivity in J.I. Case Co. v. National Labor RelationsBoard142 where the employer refused to bargain with thecertified trade union on those matters already included inindividual contracts of employment executed a few months priorto the certification petition. In the course of determiningthat the employer had refused to bargain, contrary to Section8(a)(5) of the Act, the Court articulated the implications ofthe exclusivity doctrine as prohibiting individual bargainingbetween the employer and individual employees:The very purpose of providing by statute for thecollective agreement is to supersede the terms ofseparate agreements of employees with terms whichreflect the strength and bargaining power and servethe welfare of the group. ... The practice andphilosophy of collective bargaining looks withsuspicion on such individual advantages.[A]dvantages to individuals may prove as disruptiveof industrial peace as disadvantages. They are afruitful way of interfering with organization andchoice of representatives; increased compensation,if individually deserved, is often earned at thecost of breaking down some other standard thoughtVO See for instance: Sockell, infra, note 153 at 542;M. Parker & J. Slaughter, Choosing Sides: Unions and the TeamConcept (Boston: South End Press, 1988); Report of theA.F.L.-C.I.O. Committee on the Evolution of Work, The ChangingSituation of Workers and their Unions (Washington, D.C.:A.F.L.-C.I.O., 1985); D.M. Wells, Empty Promises: Quality ofWorking Life Programs and the Labor Movement (New York:Monthly Review Press, 1987); and T.A. Kochan, H.C. Katz & N.R.Mower, Worker Participation and American Unions: Threat orOpportunity? (Kalamazoo, Mich.: W.E. Upjohn Institute, 1984),particularly Chapters 1, 4, 5 and 6.142 (1944), 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed. 762.222to be for the welfare of the group, and alwayscreates the suspicion of being paid at the long-range expense of the group as a whole. ... Theworkman is free, if he values his own bargainingposition more than that of the group, to voteagainst representation; but the majority rules, andif it collectivises the employment bargain,individual advantages or favors will generally inpractice go in as a contribution to the collectiveresult.143The message is clear. Favouring or disadvantaging individualmembers of the bargaining unit on any terms or conditions ofemployment, whether or not that matter is included in thegoverning collective agreement, is not permissible in light ofthe union's exclusive status. The employer and all employeesin the bargaining unit, whether or not they were part of themajority that selected or designated the trade union as theirbargaining agent, are bound to the bargain struck by thebargaining agent, and are prevented from seeking 144 oragreeine5 to any other terms or conditions of employmentthrough any process other than the bargaining agent.The doctrine of trade union exclusivity has been provideda very wide berth in United States labour law, garnering thedescription by one observer as a "sacrosanct cardinal tenet of143 J.I. Case Co., supra, note 142.144 See, for instance, Stewart Die Casting Corp. v. National Labor Relations Board (1940), 114 F.2d 849 (7th Cir.C.A.), cert. denied (1941), 312 U.S. 680, and National LaborRelations Board v. National Motor Bearing Co. (1939), 105 F.2d652 (9th Cir. C.A.).145 See, for instance, J. Zembrodt Express, Inc. (1971),193 N.L.R.B. 126, and Teledyne Dental Products Corp. (1974),210 N.L.R.B. 435.223the national labor policy. " '46 Perhaps the most dramaticexample of the pre-eminence attached to this trade unionstatus is found in the 1975 United States Supreme Courtdecision in Emporium Capwell Co. v. Western Addition CommunityOrganization. 147Two employees of Emporium Capwell attempted to enterdiscussions with their employer over alleged racediscrimination by the employer in its employment practices.They sought discussions with the company's president to dealwith the discrimination issue. When that effort failed toachieve a meeting with the company's president, the twoemployees held a press conference denouncing the employer asracist, reiterated their desire to meet with "top management"and announced their intention to picket the employer andinstitute a boycott until the company responded. Theemployees were eventually terminated as a result of suchactivities. The issue in the case was whether the employees'activities constituted "concerted activities" protected underSection 7 of the National Labor Relations Act.148146 F. Bartosic, "The Supreme Court, 1974 Term: TheAllocation of Power in Deciding Labor Law Policy" (1976), 62Virginia L. Rev. 579.147 (1975), 420 U.S. 50, 95 S.Ct. 977, 43 L.Ed.2d 12.148 Section 7 reads in part as follows:Employees shall have the right to self-organization, to form, join, or assistlabor^organizations,^to^bargaincollectively through representatives oftheir own choosing, and to engage inother concerted activities for the224The United States Supreme Court found the employeesactivities not so protected, and in the process, commented onthe breadth of the union's exclusive status.The Court emphasized the importance of the exclusivestatus of the trade union as a central aspect of the nationallabour policy. The Court stated as follows:Central to the policy of fostering collectivebargaining, where the employees choose that course,is the principle of majority rule. ... Inestablishing a regime of majority rule, Congresssought to secure to all members of the unit thebenefits of their collective strength andbargaining power, in full awareness that thesuperior strength of some individuals or groupsmight be subordinated to the interests of themajority. As a result, []the completesatisfaction of all who are represented is hardlyto be expected.149The fact that the smaller group that sought to deal with theemployer was not acting at cross-purposes to the union, in thesense that all were actively concerned about racialdiscrimination at this workplace, did not effect the Court'sconclusion that the employees' activities undermined theunion's exclusive status. The union, the Court determined,"has a legitimate interest in presenting a united front...andin not seeing its strength dissipated and its staturedenigrated by subgroups within the unit separately pursuingwhat they see as separate interests.050 The national labourpurpose of collective bargaining or othermutual aid or protection,...149 Emporium Capwell, supra, note 147.150 Emporium Capwell, supra, note 147.225policy, the Court concluded, called for a vibrant collectivebargaining process that must be able to operate unhampered;this can only occur through strong protection of the union'sexclusive bargaining agent position. 151 The fact thatattacking racial discrimination was an equally strong nationalpolicy was not sufficient cause for the Court to undermine theunion's exclusive bargaining agent status. 152The authorities are yet to consider the application ofthe exclusivity doctrine to the variety of innovations whichrely on direct individual and small group employeeparticipation in decision-making. However, the wide berthprovided to trade union exclusivity, as illustrated in theabove references, strongly suggests that exclusivity willemerge the winner when the two meet head-on. As oneindustrial relations commentator has concluded, the doctrineof trade union exclusivity provides "strong grounds on whichto anticipate that employee-participation structures not underunion control will be illegal", 153 whether these structurestake the form of quality circles, QWL programs, participativemanagement programs, or labour-management committees orcouncils. 154 Semi-autonomous work groups would equally be at151 Emporium Capwell, supra, note 147.152 Emporium Capwell, supra, note 147.153 D. Sockell, "The Legality of Employee-ParticipationPrograms in Unionized Firms" (1984), 37 Industrial and LaborRelations Review 541 at 546.154 Sockell, supra, note 153 at 541.226risk if implemented without the support of the trade union.The only possible means by which barriers caused by tradeunion exclusivity can be avoided is by limiting the mattersconsidered by the employee-participation structure. Section9(a) of the Act provides that a union's exclusive bargainingagent status extends to "collective bargaining in respect torates of pay, wages, hours of employment, or other conditionsof employment." The United States Supreme Court hasinterpreted this list as exhaustive of the matters upon whichan employer is obliged to bargain with the designated orselected trade union (i.e., the so-called "mandatory" subjectsof bargaining)m; conversely, if a matter is not capturedwithin those subject areas, the employer is free to refuse tobargain with the union over that matter and can freely bargainwith employees individually over such matters.156Thus, so long as the employer and individuals or smallgroups of employee deal with matters that are not mandatorysubjects of bargaining, there is no risk of impinging upon theunion's exclusive status. While this sounds simple enough, inpractice, given the breadth with which the United StatesSupreme Court has defined mandatory subjects, the partieswould be left with only minor peripheral matters with which to155 National Labor Relations Board v. Katz (1962), 369U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230; National LaborRelations Board v. Wooster Division of Borg-Warner Corp. (1958), 356 U.S. 342, 78 S.Ct. 718, 2 L.Ed.2d 823.156 Chemical Workers, Local 1 v. Pittsburgh Plate GlassCo. (1971), 404 U.S. 157; J.I. Case Co., supra, note 142.227deal. Mandatory subjects are generally defined as those whichregulate the relationship between the employer and employees,as well as those which regulate the relationship between theemployer and the union. 157This difficulty is further compounded by the necessityfor employee-participation structures within the NewIndustrial Relations to deal with traditional collectivebargaining matters if the economic benefits and personalfulfilment promised by these innovations are to be experiencedby the enterprise and its employees. 158Consequently, while in theory it is possible forindustrial relations innovations to avoid impinging upon tradeunion exclusivity, the limits that would therefore have to beplaced on the quality and quantity of employee participationwould make the effort less than worthwhile. The doctrine oftrade union exclusivity, therefore, poses significantroadblocks for industrial relations innovations premised ondirect employee involvement in the decision-making processesof the workplace.157 See, for instance, Gorman, supra, note 140 at 506 etseq.158 See, for instance: Gold, supra, Chapter One, note68; Kochan, Katz & Mower, supra, note 141; Kochan, Katz &McKersie, supra, Chapter Two, note 56; T. Kochan & M. Piore,"Will the New Industrial Relations Last? Implications for theAmerican Labor Movement" (1984), 473 Annals of the AmericanAcademy 177.228ConclusionSignificant problems for industrial relations innovationsemphasizing employee-involvement in enterprise decision-makingare posed by a variety of United States labour law doctrines.The National Labor Relations Act prohibition againstemployer domination or interference in labour organizations,found in Section 8(a)(2) of the Act, raises legal impedimentsto employers who initiate or become involved in any structureestablished to increase employee participation in enterprisedecision-making. This will be the case whether or not a tradeunion represents the employees of that enterprise.The doctrine excluding managerial personnel fromprotection under the Act poses difficulties for innovationswhich provide employees with a high degree of decision-makingauthority and autonomy in the enterprise, whether thatauthority or autonomy is provided freely by the employer or,instead, won by the employees through collective bargaining.Finally, the doctrine which provides exclusive bargainingagent status to a trade union selected or designated by amajority of the employees inhibits the use of employee-participation programs without the approval and support of thetrade union.Together, these potential legal impediments to wideranging industrial relations innovations may have asignificant dampening effect on the desire of United Statesenterprises to experiment, with the consequential loss of the229increased economic benefits for the enterprise and thepersonal fulfilment benefits for the employees of suchenterprises.Whether similar impediments are posed by Canadian labourlaw will be the subject of the next Chapter.230Chapter FiveLegal Implications in CanadaIntroduction Since at least the 1940's the Canadian legal environmenthas been supportive and conducive to developing collectivebargaining as a means of regulating the relations betweenemployers and employees in a manner that provides employeeswith some voice in the government of their workplace. Thissupport and encouragement continues to the present day, incontrast to the United States experience. Collectivebargaining and the values it emphasizes appear well entrenchedin the Canadian political zeitgeist.1This commitment to the collective bargaining model ofindustrial relations would consequently lead one to believethat new industrial relations innovations premised on a non-adversarial paradigm would be in danger when evaluated underCanadian labour law.However, countervailing indicators in the history of theindustrial relations practices in Canada suggest that in manyways the Canadian system of industrial relations, as distinctfrom industrial relations practices in the United States,would be more willing to embrace consultative, cooperative1 See the brief history of that support at the federallevel in the Canada Labour Relations Board decision in UnitedSteelworkers of America v. Cominco Ltd. (1980), 80 C.L.L.C.16,045 at 14,380-84, 40 di 75, [1980] 3 C.L.R.B.R. 105.231industrial relations strategies such as those found in many ofthese innovations. For example, before the Wagner Act modelwas introduced in Canadian jurisdictions in the late 1930'sand 1940's, the Canadian industrial relations legal system wascharacterized by its emphasis on conciliation and mediation.2While this emphasis placed industrial peace above dealing withthe underlying issues between the parties, the system soughtto encourage less adversarial means of resolving labourdisputes and greater discussion and consultation among theparties before destructive work stoppages began.The purpose of this Chapter is to determine whether theCanadian legal system of industrial relations will embrace orreject the New Industrial Relations when the two meet. Ispeak in future tense because, like in the United States,there is minimal jurisprudence from Canadian labour relationstribunals to predict with any degree of certainty where theseinnovations will land on the legal landscape. Consequently,much of this Chapter will be speculation.This Chapter will not purport to cover all jurisdictionswithin Canada. The Constitution Act, 1967 provides that theProvinces have primary jurisdiction over employment and labourrelations law in their respective provinces, while the federalgovernment maintains jurisdiction over employment and labour2 See for instance, J. Weiler, "The Role of Law inLabour Relations", in I. Bernier & A. Lajoie, Labour Law andUrban Law in Canada (Toronto: University of Toronto Press,1986) 1.232relations law in industries otherwise under federal juris-diction.3 This split in authority over labour relations lawis in contrast to the primary labour law jurisdiction of thefederal government in the United States. Thus, while there isa level of labour law uniformity across the United States thatenables one to provide a "national answer" to labour lawissues, no such national answer is provided by one labourrelations board in Canada.This is frequently only a theoretical problem in that thelegislation in each Canadian jurisdiction employs much thesame concepts, and often the same statutory language.Further, decisions of some labour relations boards, such asthose in British Columbia, Ontario and at the federal level(the Canada Labour Relations Board), tend to be drawn upon bymost other provincial labour relations boards across thecountry in interpreting their respective legislation.The bell-wether status of the Canada Labour RelationsBoard,4 Ontario Labour Relations Board5 and British ColumbiaLabour Relations Board/Industrial Relations Council6 explains3^For historical interest, see Toronto ElectricCommissioners v. Snider [1925] A.C. 396 (J.C.P.C.).4 Hereafter, the "Canada Board".5 Hereafter, the "Ontario Board".6^Hereafter, the "British Columbia Council".^TheCouncil was formerly known as the British Columbia LabourRelations Board until a change of name occurred in 1987,pursuant to S.B.C. 1987, c. 24. The British Columbia tribunalwill be referred to as the Council throughout, regardless ofwhether the particular decision referred to was made by the233why this Chapter will explore the Canadian law from theperspective of their legislation and jurisprudence. While thelaw in the areas to be discussed is similarly legislated andapplied in these three jurisdictions, sufficient differencesexist in the doctrines to be examined to justify reference tothe law in all three of these jurisdictions.This Chapter does not purport to provide an exhaustiveanalysis of the three tribunals' interpretation of therelevant provisions and principles of their respectivelegislation. The Chapter will, however, highlight eachtribunal's approach to three areas which raise particularconcerns for industrial relations innovations. These threeareas are: (I) the exclusion of managerial employees fromcollective bargaining; (2) the unfair labour practices ofdomination or interference in the formation of, administrationof, or representation by trade unions; (3) the exclusivebargaining agent status of trade unions. Each section willbegin with a brief review of the general approach in the threejurisdictions, with particular emphasis on principles mostrelevant to the New Industrial Relations. Finally, eachsection will end with suggestions how the law in thesejurisdictions might apply to innovations such as semi-autonomous work teams. Taken together, the sections shouldprovide a picture of the legality of such industrial relationsinnovations in Canada. The picture will predict a moreformer Board.234friendly reception in Canada for the New Industrial Relationsas compared to the reception received in the United States, asdiscussed in Chapter Four.(1) Managerial exclusionUnlike the United States, the exclusion of managerialpersonnel from bargaining units is expressly contained in eachCanadian jurisdiction's legislation.The Canada Labour Code provides:Section 3(1)"employee" means any person employed by an employerand includes a dependent contractor and a privateconstable, but does not include a person whoperforms management functions or is employed in aconfidential capacity in matters relating toindustrial relations;The Ontario Labour Relations Act provides:Section 1 (3)^Subject to Section 90,7 for thepurposes of this Act, no person shall be deemed tobe an employee,(a)...(b) who, in the opinion of the Board,exercises managerial functions or isemployed in a confidential capacity inmatters related to labour relations.The British Columbia Industrial Relations Act provides:Section 1(1) In this Act"employee" means a person employed by anemployer...but does not include a person who, inthe council's opinion,7 Section 90 provides that, for the purposes of Section80 and 89 of the Act, "person" includes any person otherwiseexcluded under Section 1(3)(b). Section 80 deals withprotection of witnesses when they provide evidence in aproceeding under the Act. Section 89 deals with the handlingof complaints made under the Act.235(a) is employed to, and does exercise thefunctions of, a manager or superintendentin the direction or control of employee;(b) is employed in a confidential planning oradvisory position in the development ofmanagement policy for the employer or;(c) is employed in a confidential capacity inmatters relating to labour relations orpersonnel.The commonly accepted rationale or purpose for theexclusion, showing concerns similar to those expressed in theUnited States jurisprudence, is found in the British ColumbiaCouncil decision in Corporation of the District of Burnaby,8which has been cited time and time again by labour relationstribunals across the country. The Council stated:True bargaining requires an arm's lengthrelationship between the two sides, each of whichis organized in a manner which will best achieveits interests. For the more efficient operation ofthe enterprise, the employer establishes ahierarchy in which some people at the top have theauthority to direct the efforts of those nearer thebottom. To achieve countervailing power to that ofthe employer, employees organize themselves intounions in which the bargaining power of all isshared and exercised in the way the majoritydirects. Somewhere in between these competinggroups are those in management - on the one hand anemployee equally dependent on the enterprise forhis livelihood, but on the other hand wieldingsubstantial power over the working life of thoseemployees under him. The British ColumbiaLegislature, following the path of all other labourlegislation in North America, has directed that inthe tug of these two competing forces, managementmust be assigned to the side of the employer.9The Council explained its rationale from the perspective ofthe employer:8 [1974] 1 C.L.R.B.R. 1 (B.C.).9 Ibid, at 3.236The rationale for that decision is obvious asfar as the employer is concerned. It wants to havethe undivided loyalty of its senior people who areresponsible for seeing that the work gets done andthe terms of the collective agreement are adheredto. Their decisions can have important effects onthe economic lives of employees, e.g., individualswho may be disciplined for "cause" or passed overfor promotion on the grounds of their "ability."The employer does not want management'sidentification with its interests diluted byparticipation in the activities of the employees'union.mFurther, the Council explained the advantages of the exclusionfrom the perspective of the union:More subtly, but equally important, theexclusion of management from bargaining units isdesigned for the protection of employees'organizations as well. An historic and stillcurrent problem in securing effectiverepresentation for employees in the face ofemployer power is the effort of some employers tosponsor and dominate weak and dependent unions.The logical agent for this effort is managementpersonnel. One way this happens is if members ofmanagement use their authority in the work place tointerfere with the choice of a representative bytheir employees. However, the same result couldhappen quite innocently. A great many members ofmanagement are promoted from the ranks ofemployees. Those with the talent and seniority forthat promotion are also the very people who willlikely rise in union ranks as well. In the absenceof legal controls, the leadership of a union couldall be drawn from the senior management with whomthey are supposed to be bargaining. If an arm's-length relationship between employer and union isto be preserved for the benefit of employees thelaw has directed that a person must leave thebargaining unit when he is promoted to a positionwhere he exercises management authority over it."Similar sentiments have been expressed by the OntarioIbid, at 3.Ibid, at 3.237Board in its leading case, Chrysler Canada Ltd.12, and by theCanada Board in Bank of Nova Scotia", where the Boardstated:The basis of the exclusion of certain "management"persons from the coverage of collective bargainingis the avoidance of conflicts of interest for thosepersons between loyalties with the employer and theunion. This avoidance of conflicts protects boththe interests of the employer and the union. Theconflict is pronounced when one person hasauthority over the employment conditions of fellowemployees. It is most pronounced when theauthority extends to the continuance of theemployment relationship and related matters (e.g.,the authority to dismiss or discipline fellowemployees). It is for this reason that certainperson are denied collective bargaining rightsgranted to other employees.14While these excerpts provide the policy reasoning for theexclusion of management personnel from collective bargaining -avoiding a conflict of interest for those individuals asbetween their union and their employer - they do not providestrong guidance as to how each jurisdiction determines who isor is not management. Defining the line between employees andmanagement has been an extremely difficult process because, asthe British Columbia Council once remarked, "[t]he term"management" is simply too amorphous and broad to admit of a[1976] 0.L.R.B.R. Aug. 396, especially para. 12." [1977] 2 C.L.R.B.R. 126, 77 C.L.L.C. 16,000 (Canada),application for judicial review dismissed, [1978] 2 F.C. 807(C.A.).14^Bank of Nova Scotia, supra, note 13 at 16,624C.L.L.C., 134 C.L.R.B.R..238clear and definitive analysis."15^Notwithstanding suchdifficulties, some general guidelines can be briefly stated.When faced with an individual alleged to be part ofmanagement, all three tribunals conceptually distinguish threetypes of managerial personnel, often applying differentstandards depending on the type of managerial personnel.First, individuals may be considered managerial becauseof the nature of their relationship with individuals who areunquestionably "employees" under the respective legislation.This group of managerial personnel includes those individualswho, generally speaking, play a significant role in the day-to-day control and discipline of employees. Hereafter, thisbasis of exclusion will be referred to as the "supervisorybasis".Second, individuals may be considered managerial becauseof the nature of their relationship with individuals who areunquestionably part of the enterprises's management. Thisgroup of managerial personnel includes those individuals whoplay a significant role in formulating management's practicesand policies in specific areas of the enterprise, or for theenterprise as a whole. Hereafter, this basis of exclusionwill be referred to as the "policy-making basis".Third, an individual may be considered managerial (onlyin the sense of being excluded from collective bargaining)Tahsis Company Limited (Gold River Division) v. P.P.W.C.. Local 12, [1977] 2 C.L.R.B.R. 452 at 456.239because of the individual's significant role in the process bywhich management formulates in labour and industrial relationspolicies and practices. The basis for exclusion is not theirsignificant role in formulating those labour relationspolicies (such individuals are in the second group above), butinstead exclusion is based on their access to confidentialinformation about the enterprise's labour and industrialrelations policies and practices. This Chapter will notconsider this basis of exclusion as it is not significant tothe type of industrial relations innovations at issue. 16The Ontario Board and British Columbia Council agree thatsignificantly different tests are necessary when an exclusionis alleged to be on the supervisory basis, as opposed to thepolicy-making basis. We will first consider their approach tothe supervisory basis and then we will consider their testsfor the policy-making basis.(i) Exclusion on the supervisory basis Exclusion on the supervisory basis is determined inBritish Columbia and Ontario by the degree of authorityactually provided to and exercised by the individual overthose clearly within the statutory definition of "employee".Authority in both jurisdictions includes a power to makeIn any event, as Vice-Chairman E.R. Peck (as he thenwas) said in British Columbia Ferry Corporation v. BritishColumbia Ferry and Marine Workers' Union, [1979] 1 C.L.R.B.R.116 at 127, this ground for exclusion is "sufficientlyesoteric as to have a limited exclusionary effect."240"effective recommendations" or "effective determinations" thatimpact upon the conditions of employment of employees.Providing significance to this type of authority recognizesthat in large modern enterprises the personnel function hasbecome largely centralized, structured and bureaucratized.Such a personnel structure may include a large number ofpeople who occupy positions at the first level of supervisionof employees, but who act in these positions under detailedinstructions and policies handed down from above in thehierarchy. If such individuals are merely conduits for higherlevels of management in providing direction to employees andreporting back to higher management which decides what to dowith that information, then that supervisor has little, ifany, effective control over the conditions of employment ofemployees and consequently will not be excluded on thesupervisory basis. 17 However, if that individual has a powerof effective recommendation or effective determination overthe economic livelihood of the employees below, in the sensethat his/her recommendations on matters materially affectingthe conditions of employment of those supervised are usuallyacted upon, then that power will be sufficient to have that17 British Columbia Transit v. Transit ManagementAssociation (1990), 6 C.L.R.B.R. (2d) 1 (B.C.) at 48 to 50;British Columbia Ferry Corporation, supra, note 16 at 130-31;McIntyre Porcupine Mines Limited, [1975] 2 C.L.R.B.R. 234(Ont.) at 241-42.241individual excluded on the supervisory basis.18The British Columbia Council searches for this type ofeffective control in a number of key areas before exclusion onthe supervisory basis will be warranted.19 First, theCouncil looks for effective control in the area of dischargeand lesser discipline of employees supervised. Second, theCouncil examines whether the individual has effective controlin hiring and promotion of employees supervised. Third, andless importantly, the Council looks for effective control inauthorizing overtime. Fourth, the Council looks for theeffective authority to authorize absences and schedulevacations.Further, the Council looks for indicia of managerialstatus in other aspects of the individual's day-to-daywork.28 Continuing from the list in the immediatelypreceding paragraph, fifth, the Council asks whether theindividual regularly engages in directing the activities of18 British Columbia Transit, supra, note 17; BritishColumbia Ferry Corporation, supra, note 16; McIntyre PorcupineMines Limited, infra, note 25.19 The list that follows was first articulated in thisform by the former Labour Relations Board in British ColumbiaFerry Corporation, supra, note 16, and has been recentlyapplied by the Council in British Columbia Transit, supra,note 17, Children's Hospital v. British Columbia Nurses Union,I.R.C. No. C58/91 (reconsideration of I.R.C. No. C159/90), andVancouver General Hospital v. British Columbia Nurses Union,I.R.C. No. C179/91.20^These indicia are further parts of the listarticulated in British Columbia Ferry Corporation, supra, note16 and applied in the decisions mentioned in note 19.242subordinates. Sixth, does the individual exerciseconsiderable independence and discretion in performing dutiesand meeting objectives established by higher authoritieswithin the enterprise? Seventh, does the individual engage inthe regular evaluation of employees supervised? Eighth, doesthe individual regularly attend meetings of individualsdefinitely part of management and has a right at such meetingto make proposals? Ninth, does the individual act as asupervisor over other supervisors (i.e., is this individualabove the first level of supervision)? Finally, does theindividual represent management in labour relations matterssuch as in the process of resolving grievances, interpretinga collective agreement, contributing to a set of bargainingproposals, or acting as management's spokesperson on a jointlabour/management committee? If answers to many of thesequestions are positive there is a strong likelihood theindividual would be excluded on the supervisory basis.While the provision of such a list lends an air ofcertainty to the line-drawing process, the Council is quick topoint out that the list is not exhaustive and it will not benecessary for an individual to meet all ten elements in orderto be excluded as management. 21 In the end, a judgement thatan individual is excluded on the supervisory basis is "highlyBritish Columbia Ferry Corporation, supra, note 16 at133, British Columbia Transit, supra, note 17 at 49.243subjective "22, but can be summarized by stating that "while... the function of supervision alone will not remove anindividual's employee status, supervision combined with thepower of "effective determination" in key employment-relatedareas such as hiring, firing, and discipline does justifyexclusion" 23The application of the supervisory basis exclusionoperates in British Columbia to exclude more individuals thanthe same test applied in Ontario, and certainly more thanexcluded, as will be seen, on the supervisory basis by theCanada Board. The wide breadth provided to this basis ofexclusion by the Council can be seen by noting the Council'sarticulation in recent years of the exclusion's rationale andunderlying premises.In British Columbia Transit24 the Council had occasionto comment specifically on the type of conflict of loyaltiesthe supervisory exclusion is meant to address. Thetraditional view, and that accepted by the Ontario Board, isthat the conflict to be avoided is the conflict faced by anindividual who must supervise employees who are represented bythe same union as would represent the supervisor.25 TheBritish Columbia Transit, supra, note 17 at 49.a British Columbia Transit, supra, note 17 at 49.Supra, note 17.25 ^for instance: Corporation of the District ofBurnaby, supra, note 9 at 3-4, D. McPhillips, "Exclusionsfrom the Bargaining Unit: An Alternative Approach" (1981), 39244Council in British Columbia Transit, however, broadened thatrationale to the point where it denied that this directconflict of interest is the key determinant. Instead, theCouncil determined that the exclusion is based "on the broadernotion that certain individuals have or ought to have acommunity of interest with their employer alone, without thepressure or tension of participation in collective bargaining(as a member of any union) that strains their loyaltiesaway. um In effect, this premise for exclusion on thesupervisory basis emphasizes the needs of employers to bewithout individuals in supervisory positions who have anyelement of a trade union ethic, at the expense of a greaternumber of employees who will be denied collective bargainingrights. Further, it appears to render less significant theability of the Council under Section 47 of the Industrial Relations Act to create bargaining units of supervisors or toinclude supervisors in a bargaining unit with other employees.Despite this relatively recent development in theCouncil's jurisprudence, it appears that the Ontario Boardreplicates the Council's approach to exclusions on aAdvocate 473 at 477; United Steelworkers of America v. McIntyre Porcupine Mines Limited, [1975] 2 C.L.R.B.R. 234 at246; University of Windsor Faculty Association v. Universityof Windsor, [1977] 2 C.L.R.B.R. 140 (Ont.) at 144; WhitbyGeneral Hospital v. Ontario Nurses Association (1989), 3C.L.R.B.R. (2d) 197 at 202; Board of Education for City ofWindsor (1986), 12 C.L.R.B.R. (2d) 43 (Ont.) at 67.26 British Columbia Transit, supra, note 17 at 48 (firstemphasis added).245supervisory basis, as articulated in British Columbia FerryCorporation and its progeny.Like the British Columbia Council, the Ontario Board hasfound that the purpose of the managerial exclusion as a whole,including the exclusion on the supervisory basis, "is toensure that persons who are within a bargaining unit do notfind themselves with a conflict of interest as between theirresponsibilities and obligations as managerial personnel, andtheir responsibilities as trade union members of thebargaining unit."27 And when faced with an individualalleged to be managerial on the supervisory basis, the OntarioBoard, like the British Columbia Council, "is trying to assess... the degree and exercise of authority over other employeeswhich would effect [those employees') economic position or jobsecurity, since the exercise of that authority, to anysignificant extent, would be incompatible with participationin the bargaining unit."28The Ontario Board, over the years, has developed generalapproaches and tests to determine in as precise a way aspossible the amount of authority such an individual must have,and over what issues or areas, before they would be excludedon the supervisory basis. Like the British Columbia Council,27 Board of Education for City of Windsor, supra, note25 at 67. The Ontario Board here quoted extensively from theBritish Columbia decision in Corporation of District ofBurnaby, supra, note 9.28 J.M. Schneider Inc. v. The Schneider-Link OfficeEmployees' Association, [1987] 0.L.R.B.R. March 381 at 382-83.246the Ontario Board has identified a number of key areas orissues to examine in determining whether an individual hassufficient authority in these areas to warrant exclusion. TheOntario Board asks whether the individual has a right to: (i)hire; (ii) fire; (iii) promote; (iv) demote; (v) grant wageincreases; (vi) discipline employees; (vii) contribute togeneral performance evaluations of employees; (viii)participate in the grievance procedure; (ix) grant time off;and (x) authorize and assign overtime.29 Authority in theseareas are "manifestations of managerial authority, and theexercise of such authority is incompatible with participationin trade union activities as an ordinary member of thebargaining unit."30 As mentioned earlier, exclusion by theOntario Board on the supervisory basis will be warranted notonly when the individuals at issue has direct authority toperform these acts, but also if they have a power of effectiverecommendation in that regard.In the application of such test, the Ontario Board hasexhibited itself to be more sensitive than the BritishColumbia Council to the nature of the industry at issue, thenature of the particular business within that industry, andthe employer's organizational scheme in order to determine29^Corporation of the City of Thunder Bay, [1981]0.L.R.B.R. Aug. 1121, para. 3; Hydro Electric Commission ofBorough of Etobicoke, [1981] 0.L.R.B.R. Jan. 38 at 46.30 Corporation of the City of Thunder Bay, supra, note29 at para. 3.247whether the purpose of the exclusion would be fulfilled bymaking an exclusion on the supervisory basis. Suchsensitivity will be important in reviewing industrialrelations innovations for their consistency with themanagerial exclusion which, as explored in Chapter Two,attempt to blur the line between managers and employees.The British Columbia Council's lack of sensitivity isillustrated in their recent application of the criteria listedin British Columbia Ferry Corporationm in a very mechanisticmanner to health care professionals who were part of acollegial decision-making process in a hospital setting. InChildren's Hospita132 a reconsideration panel of the Councilchaired by then-Commissioner E.R. Peck overturned an earlierpanel's decision finding Nurse Managers to be employees underthe legislation. The original panel determined that theseManagers did not have duties and responsibilities whichcreated a significant labour relations conflict or clearpotential for conflict.33 The reconsideration panelrejected this reasoning by stating:Intolerable conflict is not the standard necessaryfor exclusion from the bargaining unit and has nobasis in law. Rather, the question is whether aperson "is employed to, and does exercise thefunctions of a manager or superintendent in thedirection or control of employees" [,quoting fromSupra, note 16.32 Supra, note 19.33 Children's Hospital v. British Columbia Nurses Union,I.R.C. No. C159/90 at 23.248Section 1(1) definition of "employee" under theBritish Columbia Industrial Relations Act].While the legislature shied away from fixedcriteria to determine exclusions, the factors setout in B.C. Ferry Corp., supra, are largelydeterminative of status under Section 1(1)(a).34It appears that the Council is not prepared to apply apurposive approach to the interpretation of the managerialexclusion which would limit the exclusion to those who wouldlikely experience the type of conflict at which the provisionwas originally aimed. While the Council certainly hasprecedent from the former British Columbia Labour RelationsBoard to draw upon which exhibits a less mechanisticapproach,35 the Council appears to be charting a somewhat newcourse.This recent approach of the Council is to be contrastedwith the approach of the Ontario Board in a similar industry.The following example from the Ontario experience illustratesa receptiveness to organizational structures that are based oncollegial decision-making. Further, it illustrates anunwillingness to use exclusion on the supervisory basis as ameans to deny collegial decision makers their rights tocollectively bargain through unions.The Ontario Board in Ontario Nurses' Association v. 34 Children's Hospital, supra, note 19 at 12.See, for example, Vernon Jubilee Hospital v. HealthSciences Association, [1978] 2 C.L.R.B.R. 467 (B.C.),Vancouver City College v. Faculty Association of VancouverCity College (Langara), [1974] 1 C.L.R.B.R. 298 (B.C.).249Oakwood Park Lodge36 was faced with an application forcertification by nurses who supervised lesser-skilledemployees such as nurses aides, and kitchen, laundry andhousekeeping staff. These nurses could authorize employees toleave work early, direct employees in the performance of theirwork, call upon employees to correct their work, train newnurses' aides, regularly evaluate the nurses' aides' progress,and report to nursing meetings about problems with particularnurses aides which would result in monitoring of that aide.The Board found, in relation to disciplinary powers, that thenurses authority in this area was "carefullycircumscribed".37 Further, the nurses attend meetings withdepartment heads to "discuss the situation in the home,complaints, resident's care plans and so on."38 The nursescould not commit the employer to expenditure. They are notinvolved in the budget-creating process of the enterprise.In the end, the Board stated it "was not persuaded thatthe evidence of the nurses' duties demonstrate the kind ofconflict of interest which [the supervisory exclusion] wasdesigned to avoid."39 Key to their determination was theirbelief that a contrary ruling would be "destructive of dozens[1982] 0.L.R.B.R. Jan. 84.note 36 at 15,297.3637(1982),^82 C.L.L.C.^16,153,Oakwood Park Lodge, supra,38 Oakwood Park Lodge, supra, note 36 at 15,295.39 Oakwood Park Lodge, supra, note 36 at 15,298.250of successful collective bargaining relation[ships] '1.40While the actual decision reached helps show conflict ofinterest as the ultimate litmus-test, contrary to the recentBritish Columbia Council approach, the important part of thedecision for our purposes is the reasoning articulated by theBoard.The Board was compelled in this decision to grapple withwhat has become an increasingly troublesome issue in relationto the supervisory exclusion -how to handle individuals whosejob, skills and training place them in situations at workwhere they are provided a great deal of autonomy, discretionand input into evaluating how well the work is being performedby themselves and their peers, as well as by those with lesserskills. Are such responsibilities to result in the exclusionof broad numbers of employees on the basis of the supervisoryexclusion?Such questions arise most often in relation toprofessional employees. But as we saw in Chapter Two, workersunder the New Industrial Relations, whether in primaryindustry or high-technology enterprises, are characterized bytheir similarity, in terms of autonomy, discretion anddecision-making power, with professional employees. Thus, theapproach a labour relations tribunal takes with theexclusionary rule in relation to professional employeesprobably provides some guidance as to how they will deal withOakwood Park Lodge, supra, note 36 at 15,298.251the exclusionary rule in relation to examples of the NewIndustrial Relations.The Board in Oakwood Park Lodge acknowledged the problemsof applying the traditional exclusionary rule to professionalemployees in the following terms. Such individuals, itindicated, performed various supervisory or coordinatingfunctions which historically, or in other contexts, areassociated with managerial status. These functions includeensuring work is done properly, permitting employees to beabsent, reporting on another employee's competence, delegatingwork assignments, and disciplining employees who do not complywith the rules of the workplace. As the Board stated:[Such] persons who exercise skills which have beenacquired through years of training or experiencewill necessarily have considerable influence overthose who are less trained or experienced....Frequently, it is only the most senior orexperienced employees who will fully understand thetechnical requirement of the job and, accordingly,it is they who will allocate work betweenthemselves and the other employees in order toaccomplish the task in a safe and efficient manner.It is part of their job to ensure that appropriatetechniques are being applied and that the work isbeing done properly. Their expertise and technicaljudgement are an integral part of the group effort.In such circumstances, it is inevitable that theywill have a special place on the "team" and willhave a role to play in coordinating and directingthe work of other employees - but this does notmean that they exercise management functions in thesense contemplated by [the statutory exclusion] andmust therefore be excluded from the ambit ofcollective bargaining. To adopt so rigid a viewwould deny thousands of skilled or professionalemployees the right to engage in collectivebargaining, simply because they typically work insemi-autonomous work groups. ... To hold thatpersons with higher levels of education or training(whether acquired on the job or otherwise) exercise252"managerial functions" ... would be tantamount tosaying the Act has no application to much of thehighly trained and educated work force which ischaracteristic of the emerging high technologyindustries.°Consequently, the Ontario Board strives to closelyanalyze the working relationships in enterprises characterizedby such a consultative work structures, and thereby determinethe true location of decision-making power. An effectiverecommendation test, as used by both the Ontario Board and theBritish Columbia Council, makes the task that much moredemanding since that test does not require that the individualat issue have direct decision-making power over matters ofeconomic concern to other employees. Speaking on this issuein broad terms, and in terms particularly relevant to the NewIndustrial Relations, the Ontario Board said:Modern business organizations - especially thoseemploying professionals - encourage the free flowof information and ideas from subordinates tosuperiors. Consultation and involvement in thedecision-making process, improve communications inboth directions, clarify the employer's problemsand objectives, improve employee morale, and makeoptimum use of employee ingenuity or expertise."Participatory management styles" have become aprevalent technique in large organizations forreducing employee alienation and increasingcommitment to the goals of the employer. And, insmall organizations, consultation is inevitablebecause of the small number of individuals who mustwork together effectively if the goals of theorganization are to be realized. One should notconclude, however, that the existence ofconsultation, or an apparent "democratization" ofdecision-making, means that real managerialOakwood Park Lodge, supra, note 36 at 15,289-90.253authority has percolated downwards.42The true test to be applied in circumstances where suchconsultative processes are in place, or where skill andexperience have provided an individual "a special place on theteam", is whether the individual regularly performs "functionswhich have a direct and provable impact (positive or negative)upon the terms and conditions of employment" of otheremployees.°It is that kind of function which raises the"collective bargaining" conflict to which[exclusion on a supervisory basis] is addressed,and it is this collective bargaining purpose whichmust be kept in mind when the Board is exercisingthe broad authority granted to it under [thestatutory exclusion.]"As Oakwood Park Lodge shows, the Ontario Board will notapply its test in mechanistic manner; if the decision-makingstructure in the particular enterprise or industry is notlikely to result in the type of conflict the exclusion isaimed at, the Board appears to decide such cases in a mannerensuring as many people as possible remain entitled tocollectively bargain.°Oakwood Park Lodge, supra, note 36 at 15,287.Oakwood Park Lodge, supra, note 36 at 15,290.Oakwood Park Lodge, supra, note 36 at 15,290.45 See Board of Education for the City of Windsor, supra,note 25. See also the similar examples in the cases dealingwith collegial decision-making in academic environments in,for instance, Carleton University, [1975] 0.L.R.B.R. June 500(where the Board stated the test for the managerial exclusionmust vary with the context within which it was applied. Held:department chairs were not captured by the exclusion), and254In summary, while both the Ontario Board and the BritishColumbia Council start from the same premises and tests inrelation to exclusion on the supervisory basis, the OntarioBoard has shown a greater willingness not to apply amechanistic approach and instead look for "a direct andprovable" conflict of interest before excluding an individualon that basis. The British Columbia Council, on the otherhand, appears to centre its attention on whether theindividual at issue exhibits the classic characteristics of amanager.The Canada Board has, in effect, struck off on its ownpath regarding exclusions on a supervisory basis. In theresult, the Canada Board exclusion is extremely narrow. Onlyif the individual at issue has the direct authority personallyto effect the terms and conditions of employment of others isthat individual excluded on the supervisory basis.Thus, while the Canada Board uses the same list offactors to analyze in determining whether an individual is tobe excluded on the supervisory basis (power to hire, dismiss,promote, demote, discipline, planning work and appointingUniversity of Windsor, [1977] 0.L.R.B.R. May 300 (faculty werenot managerial despite their collective, collegial decision-making as a group). The British Columbia Council had similarprecedents to draw upon, such as in Faculty Association ofVancouver City College (Langara), [1974] 1 C.L.R.B.R. 298(B.C.), where the former Board recognized the necessity oftaking the context of the enterprise into account in reachinga decision regarding managerial exclusions. The BritishColumbia Council, however, did not refer to such decisions inthe cases referred to earlier.255people to do it, budgeting, representing management in thegrievance procedure and collective bargaining), it requiresthat the exercise of those functions be in the actual hands ofthe individual sought to be excluded.The fact that the individual is the immediate supervisorof employees, and thus may have a power of effectiverecommendation in relation to those functions, is of no momentto the Canada Board in determining the individual's status.In regard to the power of effective recommendation, the CanadaBoard has stated as follows:The existence of a power to recommend instead of apower to decide is often a key indicator of thenature of the role played by a person or a group ofpersons in an enterprise. It is not just aquestion of semantics but a means of ascertainingwhere the real authority and responsibility lie.In such a context, the originator of arecommendation simply provides an input into theactual decision. The fact that recommendations aregenerally effective does not mean that the focus ofthe decision-making process has somehow beendisplaced. It is a reflection of the fact that theauthor of the recommendation does a good job and itmight have much to do with whether or not he islikely to ever become a decision maker, but it doesnot change the nature of his job which isessentially that of a subordinate, however highlyskilled. ... If the goals and concerns of thedecision maker have been well understood andproperly taken into account by the author of thereport, it is likely that the recommendations willbe effective. Often, this process will work sowell that limited powers of decision making may bedelegated subject to a right of review or veto.Thus, on the assumption that his recommendationswill be sound, the subordinate will be allowed tobegin implementing. However, the control isretained by requiring him to inform the superiorauthority which may then intervene to overrule orveto. If the subordinate is doing his job well,this power to overrule or veto will be sparinglyused. ... Again, almost invariably, this will not256change the nature of the subordinate's job. Themanagement functions are really and truly performedelsewhere."Thus, unlike the British Columbia Council and the OntarioBoard, the Canada Board will only exclude individuals on thesupervisory basis if they are the actual decision maker, theperson with essentially unreviewable discretion.Clearly, the Canada Board draws the line betweenmanagement and employees much higher in an enterprise'shierarchy than the other jurisdictions considered.47 TheCanada Board's policy regarding effective recommendation helpsexplain how this is done. The Board's rationale for drawingthe line so high in an enterprise is deeply rooted in its viewof the purposes behind the Canada Code, and the relationshipbetween supervisory functions and the conflict of interestcriteria that is at the heart of exclusion on a supervisorybasis.The Board has placed great emphasis on changes to federallabour legislation in the Canada Labour Code in 1973 relativeto supervisory personnel. Specifically, the Board has notedthe strong commitment to collective bargaining found in thepreamble of the Code, the decision by Parliament notexpressly to exclude supervisors from the definition of46 Society of Telephone Engineers and Managers v. BritishColumbia Telephone Company, [1976] 1 C.L.R.B.R. 273 (Canada)at 282-83.47 C. Foisy, D. Lavery & L. Martineau, Canada LabourRelations Board Policies and Procedures (Toronto:Butterworths, 1986) 27, 31.257"employee" under the Code, and the inclusion in the Code ofSection 27(4) (formerly Section 125(4)) which contemplatesinclusion of supervisory personnel in bargaining units. 48 Theoperation of all these elements of the Canada Labour Code hascaused the Board to rethink the conflict of interests basisfor the managerial exclusion, and to reach the conclusion thatsupervision of employees is, in effect, irrelevant to thedetermination of whether an individual should be excluded onthe supervisory basis.As an aside, although the British Columbia Council has asimilar provision authorizing the inclusion of supervisors inbargaining unit49, the Council has not drawn the sameconclusions about that provision's significance. The CanadaBoard, as noted, has taken the provision to signal thatsupervisory functions are not relevant to employee status.The British Columbia Council, on the other hand, has not seenthe provision as derogating from the over-riding concernwhether the individual exercises management functions." Onlyif they reach a negative conclusion on that question will theyconsider inclusion of a supervisor in a bargaining unit.The Canada Board's reasoning for their unique approach is48 Cominco Ltd., supra, note 1; N.A.B.E.T. V. CanadianBroadcasting Corporation (1984), 55 di 197 at 216 et seq.49 Industrial Relations Act, R.S.B.C. 1979, c. 212, s.47." See, for instance, Corporation of the District ofBurnaby, supra, note 9 at 5.258as follows:[O]ur test is one of conflicting interests, but itis no longer as it was perceived in the 60's oreven the 70's. Views about the compatibility ofcollective bargaining and job responsibilities havechanged. ... Society accepts that citizens mayexercise duties of social trust and find noconflict with their exercise and membership intrade unions or participation in collectivebargaining. ...In this context it is no longer apposite to viewthe conflict of interest rationale for themanagerial exclusion in terms of sworn oaths ofmembership in unions and unswerving loyalty to thebrotherhood of membership. These terms are clearlyoutdated. The potential conflict of interest to beconsidered is one between employmentresponsibilities and the union as an instrument forcollective bargaining in a climate where there islegal protection for the individual in hisrelationship to the union both as bargaining agentand organization." To say because a person is thesole supervisor present at a time or place createsa conflict because he must be the "managementpresence" is to think of conflicting loyalties inan outdated framework. Many employees ininnumerable circumstances act alone and performresponsible tasks. The fact they also engage incollective bargaining has no impact on theirloyalty to their employer or dedication to theirjob. Supervision by its nature has always requiredpersons to act as the final on-the-siteauthority.52In light of these considerations, the Board articulateda non-exhaustive list of job functions which, unlike in theOntario Board and British Columbia Council jurisprudence, willnot be considered relevant to whether an individual should be" The Board had, earlier in its decision, catalogued thelegislated rights union members have as against their union,such as the union's duty of fair representation and fairreferral, the union's duty to be non-discriminatory inrevoking an individual's membership, etc. See Cominco Ltd.,supra, note 1 at 14,387.52 Cominco Ltd., supra, note 1 at 14,386-87.259excluded on the supervisory basis. The Canada Board stated asfollows:[T]he fact a person is a supervisor and as suchdirects the work of others, corrects and reprimandswhere necessary, allocates work among men andequipment, evaluates or assesses new andlongstanding employees, authorizes overtime whennecessary, calls in manpower when needed, trainsothers, receives training to supervise, selectspersons for advancement, authorizes repairs, canhalt production when problems arise, scheduleholidays and vacations, verifies time worked,authorizes shift changes for individuals, andrequisitions supplies when needed does not createthe conflict or potential conflict that disentitleshim to the freedom to associate. The loyalty andintegrity of such a person is not altered by unionmembership or representation. We do not subscribeto the view that says an employee will becomedishonest or abuse responsibility because he isrepresented by a union.5.5Further, the Board added that it would not consider anindividual's participation on a safety committee as arepresentative of the employer as a management function.54And an individual's ability to commit the employer toexpenditures is equally not grounds for finding a conflict.55In summary, the Canada Board has developed an extremelynarrow rule for exclusion on a supervisory basis.Essentially, only those having direct authority to immediatelydecide key employment conditions of employees will be caughtby the exclusion.Cominco Ltd., supra, note 1 at 14,388.Cominco Ltd., supra, note 1 at 14,388, and BritishColumbia Telephone Company, Canada Labour Relations BoardDecision No. 221 (1980) at 24-26.55 Cominco Ltd., supra, note 1 at 14,387.260(ii) Exclusion on the policy-making basis The second group of managerial personnel excluded fromcollective bargaining are those excluded on the policy-makingbasis. Such personnel, while not directly involved in the dayto day direction and control of the workforce, are nonethelesskey to the employer's operation by helping determine overallpolicy for running the enterprise. Their impact on employeesis less direct than those excluded on the supervisory basis;but their decisions often can have a deeper, more wide-spreadimpact on employees, such as decisions to implementtechnological change, thereby causing lay-offs. Consequently,their participation in the bargaining unit of employees createthe same kind of conflict concerns as applied to exclusions onthe supervisory basis.All three jurisdictions exclude policy-making personnel.However, the exclusion appears to operate more broadly inBritish Columbia than in the other two jurisdictions.(a) British Columbia Council The British Columbia Council implied a policy andplanning personnel exclusion from the generalized managerialexclusion found in their pre-1977 legislation.56 A 1977amendment to that legislation57 codified that policy-makingexclusion in what is now subsection (b) of the definition of56 Kootenay Savings Credit Union, [1978] 1 C.L.R.B.R. 36(B.C.) at 39-40.57 S.B.C. 1977, c. 72, s. 1.261"employee" set out above.The Council made it clear in Kootenay Savings CreditUnion58 that persons exercising significant administrativeresponsibilities as part of a "management team" or otherwiseinvolved in duties closely associated with the functions ofupper-level executive members of management would suffer thesame stress of conflicting interests as those who daily directand control the workforce. Thus, such personnel will beexcluded. What distinguishes them from others, according tothe British Columbia Council, is their proximity to thecentral decision-making structures of the employer and theirconsequential identity with management, particularly from theperspective of the rank and file employees.59 Explaining theCouncil's rationale for implying a "management team"exclusion, and thereby indicating the breadth of exclusion onthe policy-making basis in British Columbia, the Councilstated as follows in Vernon Jubilee Hospital":The initial wording of the Labour Code appeared tofocus solely on line management - those persons whoexercise management functions over other employeesin carrying out the operations of the employer[i.e., those excluded on the supervisory basis].The Board could and did stretch that languagewithout a great deal of effort in order to excludeexecutives, those persons who wielded managerialauthority over the line managers themselves. Butwe faced a perennial difficulty in categorizing the58 Supra, note 56.59 See, for instance, Vernon Jubilee Hospital, [1978] 2C.L.R.B.R. 467 (B.C.).60 Supra, note 59 at 472.262principal assistants and advisors to theseexecutives. In the real life of the firm, thepeople all function as part of a single, cohesiveteam developing crucial policy directions for theenterprise. For that reason, there is a compellingpractical case for the exclusion of suchindividuals from the collective bargaining regimeof the ordinary employees, if only to preserve anundivided sense of loyalty and confidentiality inthe management team.Thus, if an individual assists in the process ofdecision-making over the basic policy direction of theenterprise, even if only in an advisory role with no actualdecision-making power, they may be excluded on the policy-making basis.(b) Ontario BoardThis British Columbia test is to be contrasted with thenarrower Ontario test for dealing with persons who are engagedin management planning and policy. The Ontario test requiresthat a person have actual decision-making power before theywill be excluded on the policy-making basis. The OntarioBoard stated its test in Cottage Hospital (Uxbridge)m.There the Board stated as follows:For those persons whose work has little or noimpact on the employment relationship, the Boardlooks to whether or not they exercise independentdecision-making responsibilities in matters ofpolicy or the running of the organization. The Actdoes not operate to exclude persons whoseindependent decisions are either circumscribedwithin pre-determined limits set by others orlimited to technical and procedural determinations[1980] 0.L.R.B.R. March 304.263flowing from their expertise in a limited field.62Thus, the key for the Ontario Board is whether the individualsin question exercise an independent power over importantaspects of the employer's business.^If the person hasindependent discretion in such areas as budgeting, buying orselling, they will generally be excluded.°^Similarly,personnel will be excluded if they control, determine orformulate policy and methods by which the employer seeks todeal with such matters as public relations, the enterprise'sproductivity or costs, or if they set the necessary guidelinesfor others to follow in such areas." As the Board said inHydro-Electric Power Corporation65:With the rapid advance of technology and the use ofmore sophisticated management tools, an everincreasing number of persons are becoming activelyinvolved, in varying degrees, in all aspects ofimproving public relations, efficiency,productivity and in controlling the cost ofproduction. As more persons become involved inthese matters, it becomes increasingly difficult todistinguish between [manager and employee]....Thedistinction [between manager and employee] can onlybe based on the evidence of the duties and62 Cottage Hospital, supra, note 61.63 J. Sack & C.M. Mitchell, Ontario Labour RelationsBoard Law and Practice (Toronto: Butterworths, 1985) at 88 andthe cases cited at note 196 therein. See also, Oakwood ParkLodge and Ontario Nurses Association, [1982] 0.L.R.B.R. Jan.84, 82 C.L.L.C. 16,153, upheld, 83 C.L.L.C. 14,016 (Ont. Div.Court), para. 8 0.L.R.B.R..64 See, for example, United Steelworkers of America andMcIntyre Porcupine Mines Limited, [1975] 2 C.L.R.B.R. 234(Ontario) and Hydro-Electric Power Commission of Ontario,[1969] 0.L.R.B.R. 669 at para. 8.65 [1969] 0.L.R.B.R. 669 at para. 8-9.264responsibilities exercised by such persons in theparticular case. Such decisions necessarilyinvolve an empirical determination of whether theperson who may perform functions which relate to orbear upon the improvement of public relations,efficiency, productivity or cost, is in factcontrolling or determining the process or is merelyimplementing a process which has been predeterminedby some person in management. It cannot be deniedthat these matters are properly the concern ofmanagement. However, if the person is merelyimplementing a decision made by another and haslittle latitude to use any independent discretionexcept in predetermined circumscribed areas, suchperson cannot be said to be exercising managerialfunctions. If, on the other hand, a person has theindependent discretion to formulate policies andmethods or set the necessary guidelines for others,such functions may properly described as managerialfunctions. These latter functions are readilydistinguishable from the functions performed bypersons who merely gather or collate informationwhich will be acted upon by a member of management.Policy-making decisions on such matters as how to improvepublic relations, efficiency, productivity and costs, tendonly to affect employees in an indirect manner since suchdecisions do not immediately impact upon employment security.Consequently, exclusion will only be warranted when the personin question is an actual decision-maker; persons with onlythe power to make recommendations in such areas will notgenerally be excluded, notwithstanding that theirrecommendations are consistently followed by the actualdecision-maker. 66 This is to be contrasted with theeffective recommendation rule, as described above, forpersonnel who have direct impact on the daily worklives andSee, for instance, Cottage Hospital, supra, note 61,Corporation of City of Thunder Bay, supra, note 29.265employment conditions of ordinary employees.Despite this general rule, the Ontario Board has onoccasion extended exclusion on the policy-making basis tothose only making effective recommendations. This occurswhen, for instance, the individuals at issue possess otherindicia of management, such as dealing with clearly managerialpersonnel on a basis of equality.67 Thus, in Rio Algoma Mines Limited68 the Board excluded "project technicians" onthe policy-making basis, despite lacking actual decision-making power. The Board described their duties and power inthe following manner:[T]he project technicians attend meetings of the"weekly management conference program." The mainpurpose of the management conference program is amanagement training tool.^Such meetings areconfined to supervisory staff.^The personsattending these meetings are encouraged toparticipate by making suggestions andrecommendations concerning various policy mattersand proposals for changes in the collectiveagreement. In addition, the project techniciansattend other management meetings. The projecttechnicians also make effective recommendationswith respect to managerial decisions which areregularly followed by the [employer]. The projecttechnicians appear to deal with other members ofsupervision outside of their own department with adegree of equality one would not expect of personsincluded in the bargaining unit. They giveinstructions and make effective recommendations tosupervisors in other departments. From theknowledge gained in the preparation of theirreports, the project technicians must makedecisions of a managerial nature in order to makeeffective recommendations concerning the67 See, for example, McIntyre Porcupine Mines, supra,note 25 at 240-41.[1970] 0.L.R.B.R. 865.266discontinuance and continuance of product lines.On all the evidence, we find that the projecttechnicians are more than collators of facts andconduits of information but effectivelyparticipate, as part of the management team, in thedecision-making functions of management."If an individual's policy-making functions are merelyadvisory, but they nevertheless exhibit other indicia ofmanagement, there will be created a perception amongst boththe rank and file employees and management officials that theindividual is aligned with management. This may in turn raiseall the conflict of interest issues associated with themanagerial exclusion and the provisions related to employerparticipation or interference in the affairs of the bargainingrepresentative." Consequently, such individuals may beexcluded from the definition of employee, notwithstandingtheir lack of actual decision-making power.Thus, the British Columbia and Ontario rules appearclosely aligned in dealing with personnel who exercisemanagement functions that only indirectly affect theemployment conditions of employees. Both jurisdictions willexclude people who have actual decision-making power thatindirectly affects employment or employment conditions ofother employees. And both jurisdictions will tend to excludepeople who, although lacking actual decision-making power insuch areas, nonetheless are closely aligned with management69 Rio Algoma, supra, note 68 at para. 11.McIntyre Porcupine Mines, supra, note 25 at 247.267and perceived to be so.(c) Canada BoardAs with personnel who directly supervise the work ofothers, the Canada Board has narrowly interpreted themanagerial exclusion in dealing with employees who onlyindirectly affect the employment conditions of others. TheCanada Board asks whether the individual has the power to makepolicy decisions involving the exercise of independentjudgement, either individually or as part of a "managementteam", which will be binding on the employer.71 Thus, wherepersonnel alleged by the employer to be managerial had minimalindependent authority, and only in emergency situations, tobuy, spend money or order new equipment, and where they wereonly sporadically invited to attend management meetings, andonly then to share information, they were found to beemployees under the Code.72The Canada Board has made it apparent that it willrequire not only clear proof of substantial decision-makingpower, but also a strong correlation between this power and aresulting conflict of interest between the individual and theemployer. The Board, more than other such tribunals, placesSee, for instance: Greyhound Lines of Canada (1974),74 C.L.L.C. 16,112, 4 di 22; Vancouver Wharves Ltd., [1975]1 C.L.R.B.R. 162, 74 C.L.L.C. 16,118, 5 di 30; BritishColumbia Telephone Co., [1976] 1 C.L.R.B.R. 273, 76 C.L.L.C.16,015, 20 di 239; Crown Assets Disposal Corp. (1981), 43 di203; Radio Saguenay Ltee (1981), 43 di 228.72 Vancouver Wharves, supra, note 71 at 16,446 C.L.L.C..268particular stress on the purpose behind collective bargaininglegislation to facilitate and enhance collective bargainingfor as many people as possible. The Board is thereforeparticularly suspicious of such concepts as the "managementteam". Such concepts appear designed to deny employees theirrights under collective bargaining legislation.73For the Canada Board all tests for exclusion turn onwhether permitting individuals to be classed as "employees"under the Code would place them in an untenable conflict ofinterest between their membership in a union and theirresponsibilities to the employer. The Board articulated theirpolicy in the following manner after expressing the view thatmuch of the prior law of exclusions was based on a fallaciousassumption that trade union membership automatically made anemployee untrustworthy:The fact that employees influence corporate policyor commit an enterprise to expenditures is equallynot grounds for finding a conflict. These arecommon characteristics of the functions ofprofessionals. They have been given collectivebargaining rights. They are also commoncharacteristics of the functions of specialistsgenerally, whether tradesmen, technicians or othergroups of employees.ThAgainst this background, it would appear unlikely theCanada Board would exclude personnel from the definition ofUnited Steelworkers of America and Cominco Ltd. andJ. Teasdale and Various Employee Intervenors, [1980] 3C.L.R.B.R. 105, 40 di 75, 80 C.L.L.C. 16,045 at 122C.L.R.B.R..A United Steelworkers of America and Cominco Ltd.,supra, note 73 at 118.269"employee" unless they had actual decision-making power thatwould bind the employer and possessing that power, togetherwith union representation, placed them in a clear conflict ofinterest.(d) Potential impact of the managerial exclusion onindustrial relations innovations It will be recalled from Chapter Two that the variety ofworkplace innovations discussed in that Chapter culminated ina discussion of socio-technical systems and its application insemi-autonomous work groups. For the reasons stated at theend of that Chapter, we need only discuss the legalimplications on this form of innovation.Arguably, the type of authority provided to semi-autonomous work groups is such that it is likely team memberswould be excluded from collective bargaining by the BritishColumbia Council and the Ontario Board both on the supervisorybasis and the policy-making basis. Whether the Canada Boardwould exclude on either or both of these basis is perhaps opento more debate, although there is some likelihood that teammembers would survive Canada Board scrutiny.Fully developed semi-autonomous work groups have withintheir authority all the relevant support functions requiredfor the team to operate on a long-term basis. Included withinthese powers are the personnel functions normally exercised bya human resources department of an enterprise, as well as270control over the financial resources of the team.75 Whilethis is the theoretical ideal of socio-technical systemsadvocates, it also appears to very closely reflect realitywhen semi-autonomous work groups are put into practice.As discussed in Chapter Two, the Shell Chemicalmanufacturing plant in Sarnia, Ontario is among the mostprominent facilities to implement semi-autonomous work teams.The practice of those work groups graphically illustrates whythis innovation is placed at risk by both aspects of themanagerial exclusion:76Team members play an important role in the personnelfunction of the group.Team members interview and select new members of theteam, although the initial list is prepared by the personneloffice of the enterprise.The team's management co-ordinator is also selected in aprocess that involves team decision-making. When a vacancySee, for instance, Mansell, supra, Chapter Two, note60 at 13.76 The following discussion of the practices of semi-autonomous work groups at the Sarnia plant are drawn from:Mansell, supra, Chapter Two, note 60 at 14-16; L. Davis & C.Sullivan, "A Labour Management Contract and Quality of WorkLife" (1980), 1 Occupational Behaviour 29; N. Halpern,"Sociotechnical Systems Design: The Shell Sarnia Experience"in J. Cunningham & T. White, Quality of Working Life: Contemporary Cases (Ottawa: Supply and Services Canada, 1984)31; C. Heckscher, The New Unionism: Employee Involvement inthe Changing Corporation (New York: Basic Books, 1988) 138-46;and, T. Rankin, New Forms of Work Organization: The Challenge for North American Unions (Toronto: University of TorontoPress, 1990) 60-156.271occurs for the position of co-ordinator, both the team and amember of management separately rank-order the candidates, whotend to be current members of the team. While the plantmanager makes the ultimate decision, from the introduction ofteams at Sarnia to 199077 the candidate recommended by theteams has "almost always" been appointed.The team plays a key role in assessing the competence offellow team members and thus whether the member will continuewith the team or be required to upgrade. Further, teammembers are responsible for assigning work, technical trainingof fellow team members in need of new skills, authorizingovertime, and scheduling vacations.In light of these responsibilities and authority, thereis a great likelihood team members would be consideredmanagerial on the supervisory basis in both British Columbiaand Ontario.As noted earlier, the British Columbia Council examinessuch issues from the perspective of whether the individuals atissue exercise classically managerial functions. Clearly,semi-autonomous work group members do.The Ontario Board is equally concerned about whether theindividuals at issue exercise such classic functions.However, as indicated above, it has exhibited a sensitivity tonew methods of organizing work in their application of theexclusion on the supervisory basis. However, as its reference77 Data was not available after that year.272to semi-autonomous work groups in the Oakwood Park Lodgedecision makes clear, the issue will nevertheless come down towhether the individuals in question exercise directly, orthrough effective recommendation, powers that intimatelyaffect the economic security of other employees. Since thepoint of semi-autonomous work teams in the Sarnia plant is toprovide employees with a degree of autonomy and authorityhitherto not experienced by employees generally, it wouldappear likely that the Ontario Board would also find teammembers to be management.Real authority exercised by team members would not,however, likely compel the Canada Board to find semi-autonomous work team members excluded on the supervisorybasis, given that the Canada Board finds such functionsirrelevant to the determination of conflict of interest.Further, it appears from the above description of semi-autonomous work teams at Sarnia that there is a plant managerwho ultimately has authority, although seldom exercised, overthe practices within the plant. The presence of such higherlevel management perhaps makes the power of semi-autonomouswork teams only that of effective recommendation which, asearlier stated, is not sufficient for the Canada Board to basean exclusion.Regarding the policy-making functions of semi-autonomouswork teams, there is clearly a broad role for the teams indecisions of policy. For example, the teams maintain ongoing273planning, integrating, executing, and monitoring functions,and conduct formal evaluations of the organization's design.They are able to implement changes to the work process andequipment as required. They also have broad access totechnical information about the manufacturing processes, aswell as economic information so that economic implications canbe taken into account when the team contemplates changes towork processes. In short, the teams are responsible for anatural, whole unit or process of work and their autonomy inthis regard is a key part of the socio-technical system.The British Columbia, Ontario and Canada tests forexclusion on the policy-making basis would all likely capturesemi-autonomous work team members, although the result fromthe Canada Board is less certain than the other two.The British Columbia and Ontario tests call for theexclusion of those with actual decision-making power overmanagement policy matters. The Ontario Board has expresslyincluded actual decision-making power in relation toefficiency, productivity and costs as within its articulatedlist of significant policy areas that would attract exclusionon the policy-making basis. The breadth of the BritishColumbia management team concept would comfortably embraceindividuals with decision-making power in those areas.Clearly, semi-autonomous work teams exercise actual decision-making power in such areas. Their planning and evaluationauthority, together with their authority to implement what274they determine to be necessary changes in the productionprocesses, are manifestations of the autonomy they enjoy.Equally, they are manifestations of actual decision-making inareas of management policy that would attract the BritishColumbia and Ontario tests for exclusion on the policy-makingbasis.While the decision-making autonomy of such work teamswould also appear to attract exclusion under the Canada Boardtest, a degree of uncertainty remains in light of the CanadaBoard's stated commitment to keep the managerial exclusionnarrow. It is unclear how that commitment would play itselfout if the Canada Board was faced with semi-autonomous workteam members. At the end of the day, however, exclusion onthe policy-making basis would be likely since such broad teamauthority to commit the employer to change may raise the typeof conflict of interest problems the Canada Board identifiesas the ultimate litmus test.(2) Employer domination It is important at the outset of this discussion toappreciate the significant differences between the UnitedStates law and Canada's law regarding provisions in collectivebargaining legislation prohibiting employer domination ofbargaining agents. The difference is one that can fruitfullybe discussed before examining the details of the Canadian lawin this regard, since the difference centres around the275consequences in each country of a finding of employerdomination. And it is a difference that has significantramifications on the legality of industrial relationsinnovations and will show Canadian law as creating lessimpediments to such innovations under this heading.The United States law, as will be recalled, creates anoutright prohibition on employer domination of any "labororganization". Under the United States legislation, "labororganization" means "any organization of any kind ... whichexists for the purpose, in whole or in part, of dealing withemployers" on any terms or conditions of employment.78 Thisdefinition captures all organized means by which employeesdeal with their employer on any of the following matters:"grievances, labor disputes, wages, rates of pay, hours ofemployment, or conditions of work."79 The United StatesCourts have interpreted "labor organization" in such a mannerthat it includes "all employee-participation mechanisms, invirtually any form" .80 Further, a finding of employerdomination can result in an order requiring disestablishmentof the of the labour organization. Consequently, virtuallyevery industrial relations innovation is open to N.L.R.B.scrutiny and a possible disestablishment order. This is so78 National Labor Relations Act, 29 U.S.C. paras. 151-69(1989), Section 2(5).79 National Labor Relations Act, supra, note 78, s. 2(5).80 Sockell, supra, Chapter One, note 44 at 553.276whether the labour organization is a union, employeerepresentation plan, joint committee or semi-autonomous workteam.By contrast, Canadian labour relations tribunals are onlyconcerned with employer domination in limited circumstances,and certainly such tribunals do not purport to havejurisdiction ordering disestablishment of a body that isdominated by an employer. The two general circumstances whereemployer domination becomes an issue for Canadian labourrelations tribunals are:(1) when a body alleged to be employer-dominatedattempts to be certified as the exclusivebargaining agent for a group of employees. If thebody is employer dominated, it will not becertified, either because the domination takes itoutside the statutory definition of trade union, orbecause the relevant legislation prohibitscertification of employer dominated trade unions.Further, any purported collective agreement betweenthat body and the employer will be unenforceableunder the legislation;(2) when a body alleged to be employer-dominatedattempts to act as a bar to a trade union'sapplication for certification over the sameemployees represented by the dominated body. Whilevoluntary recognition of a trade union can operate277as a bar to certification by another union,recognition of an organization that is employerdominated will not do so.A finding of employer domination in these twocircumstances will not result in the relevant Labour Board orCouncil ordering disestablishment of the body. Instead, suchtribunals will simply, in the first case, refuse to certifythe body as bargaining agent or permit it to enforce thecollective agreement through legislative enforcementmechanisms. In the second case, the tribunal will prevent thebody from acting as a bar to a certification application by anon-dominated trade union.In summary, the fact that an employer dominates a labourorganization is of no immediate legal consequence in Canada,so long as that labour organization does not attempt to becertified by a labour relations tribunal, does not attempt tohave its collective agreement (if any) enforced throughcollective bargaining legislation, and does not attempt to actas a bar to a certification application by a trade union. Inother words, Canadian collective bargaining law is notconcerned with the nature of arrangements between employersand employees, so long as employees are free to pursuecollective bargaining through independent trade unions if theyso choose. It is only when those "arrangements" betweenemployers and employees purport to constitute a trade unionunder the relevant legislation that the law becomes concerned278about employer domination or interference.While it is not uncommon for home-grown employeeassociations to purport to be trade unions under collectivebargaining legislation, and thereby attempt to be certified oract as a bar to certification efforts of an independent tradeunion, it would be highly unusual for a true semi-autonomouswork group, as a discrete entity, to ever attempt to holditself out as a trade union under the relevant legislation.This is because work groups are primarily methods of workorganization rather than a means to represent employeeinterests to the employer. While the autonomy of such workgroups enable them establish many of the matters that wouldtraditionally appear in a collective agreement, such as hoursof work, overtime entitlements, vacation rights andscheduling, skills and abilities criteria for promotion,training periods, and discipline, work groups have none of theclassic characteristics of a trade union such as aconstitution, funding through dues submitted by members or anyovert purpose of bargaining collectively with the employer.For such reasons, semi-autonomous work groups would not likelymeet the statutory definition of a "trade union" under theBritish Columbia, Ontario or Canadian legislation.m Thus,it is extremely unlikely, and therefore not a concern that81 See, for instance: Bullmoose Operating Corp. (1983),4 C.L.R.B.R. (N.S.) 51 (B.C.); Service EmployeesInternational Union, Local 204 Staff Assoc., [1991] 0.L.R.B.R.Feb. 267; Air West Airlines Ltd., [1980] 2 C.L.R.B.R. 197(Can.).279need be addressed in this thesis, that we would ever have toconsider whether work groups are themselves trade unions.The more likely scenario would be that members of suchwork groups in an enterprise would create an association,separate and apart from the work groups, to deal with theemployer on matters such as wage rates that are notestablished through the autonomous workings of the groups.This association might then purport to be a trade union withwhich a labour relations tribunal would have to contend if theassociation sought certification or to bar a certificationapplication from an outside union.Thus, the issue to address is whether an association ofmembers of semi-autonomous work groups would be considereddominated by the employer so as to prevent certification ofthat association, or prevent that association from standing inthe way of another certification applicant.The law of the Ontario Board and British Columbia Councilare very similar on issues of domination and interference.And while the Canada Board's legislation concerning dominationprovide for a different test than in the other jurisdictions,the practical consequences of the Canada Board's law tend tomake the difference insignificant. Consequently, the law ofall three jurisdictions will be considered together.All three jurisdictions contain similar provisionsregarding employer-dominated labour organizations.280The Ontario Labour Relations Act provides:Section 13The Board shall not certify a trade union if anyemployer or any employers' organization hasparticipated in its formation or administration orhas contributed financial or other support to it...Section 48• An agreement between an employer...and a tradeunion shall be deemed not to be a collectiveagreement for the purposes of this Act,(a) if the employer...participated in theformation or administration of the trade unionor if an employer...contributed financial orother support to the trade union;...The British Columbia Industrial Relations Act provides:Section 1(1)In this Act"trade union" means^... but not anorganization or association of employees thatis dominated or influenced by an employer;Section 50An organization or association of employees(a) the formation, administration, managementor policy of which is, in the council'sopinion, dominated or influenced by anemployer or a person acting on hisbehalf; ...shall not be certified for the employees, and anagreement entered into between that organization orassociation of employees and the employer shall bedeemed not to be a collective agreement.The Canada Labour Code provides:Section 25(1)[W]here the Board is satisfied that a trade unionis so dominated or influenced by an employer thatthe fitness of the trade union to representemployees of the employer for the purposes ofcollective bargaining is impaired, the board shall281not certify the trade union as bargaining agent forany unit comprised of employees of the employer andany collective agreement between the trade unionand the employer that applies to any such employeesshall be deemed not to be a collective agreementfor the purposes of this Part.The Ontario, British Columbia and Canada provisions aresimilar in that they prevent certification of employer-dominated labour organizations. The British Columbia andCanada provisions go further in that they prevent anyagreement between the labour organization and the employerfrom being considered a collective agreement under theirrespective legislation.The jurisprudence of the three jurisdictions haveidentified two primary purposes for preventing certificationof an employer-dominated labour organization.First, the legislation is premised on the need foremployees to be represented by an organization which holds theemployees' interests uppermost in its mind and strives toadvance those interests in dealings with the employer.Consequently, an organization that is dominated by theemployer cannot properly represent the employees. Devotion tothe employees will be weakened to the extent the employerdomination manifests itself