In Canadian labour law, the Rand formula (also referred to as automatic check-off and compulsory checkoff) [1] is a workplace compromise arising from jurisprudence struck between organized labour (trade unions) and employers that guarantees employers industrial stability by requiring all workers affected by a collective agreement to pay dues to the union by mandatory deduction in exchange for the union agreement to "work now, grieve later."
Historically, in some workplaces, some workers refused to pay dues to the union even after benefiting from wage and benefit improvements negotiated by the union representatives, resulting in friction and violence as they were seen as "freeloaders"; at the same time, absence of a peaceful grievance settlement mechanism created industrial instability as union members often walked off the job. The Rand formula compromise was designed to ensure that no employee will opt out of the union simply to avoid dues yet reap the benefits of collective bargaining, such as higher wages or health insurance.
Supreme Court of Canada Justice Ivan Rand, the eponym of this law, introduced this formula in 1946 as an arbitration decision ending the Ford Strike of 1945 in Windsor, Ontario. [2] The Canada Labour Code and the labour relations laws of a majority of provinces contain provisions requiring the Rand formula when certain conditions are met. In those provinces where the labour relations laws do not make the Rand formula mandatory, the automatic check-off of union dues may become part of the collective bargaining agreement if both parties (i.e., the employer and the trade union) agree. If there are religious objections to paying dues the dues may be donated to a mutually agreed upon charity.
Union dues to be deducted
70. (1) Where a trade union that is the bargaining agent for employees in a bargaining unit so requests, there shall be included in the collective agreement between the trade union and the employer of the employees a provision requiring the employer to deduct from the wages of each employee in the unit affected by the collective agreement, whether or not the employee is a member of the union, the amount of the regular union dues and to remit the amount to the trade union forthwith.
Religious objections
(2) Where the Board is satisfied that an employee, because of their religious conviction or beliefs, objects to joining a trade union or to paying regular union dues to a trade union, the Board may order that the provision in a collective agreement requiring, as a condition of employment, membership in a trade union or requiring the payment of regular union dues to a trade union does not apply to that employee so long as an amount equal to the amount of the regular union dues is paid by the employee, either directly or by way of deduction from their wages, to a registered charity mutually agreed on by the employee and the trade union.
Designation by Board
(3) Where an employee and the trade union are unable to agree on a registered charity for the purposes of subsection (2), the Board may designate any such charity as the charity to which payment should be made. [3]
The Rand formula applies to all employees whether they are union members or not in those workplaces where the majority of the employees vote to form a union. The Supreme Court of Canada has found that the freedom of association is not undermined by the Rand formula. [4] In the 1991 Lavigne decision, the Justices of the Court held in various concurring reasons that if the Rand formula did violate section 2(d), it could be justified under section 1 of the Canadian Charter of Rights and Freedoms [4] as it fundamentally does no more than what is commonplace in a democratic society – the will of the majority prevails, as in the decisions of parliament, and those in the minority are bound by the decision of the majority.
I would suggest that a worker like Lavigne would have no chance of succeeding if his objection to his association with the Union was the extent that it addresses itself to the matters, the terms and conditions of employment for members of his bargaining unit, with respect to which he is "naturally" associated with his fellow employees. Few would think he should not be required to pay for the services the Union renders him in this context. Significantly, he does not object to these matters. With respect to these, the Union is simply viewed as a reasonable vehicle by which the necessary interconnections of Lavigne and his fellow workers is expressed.
When, however, the Union purports to express itself in respect to matters reflecting aspects of Lavigne's identity and membership in the community that go beyond his bargaining unit and its immediate concerns, his claim to the protection of the Charter cannot as easily be dismissed. In regard to these broader matters, his claim is not to absolute isolation but to be free to make his own choices, unfettered by the opinion of those he works with, as to what associations, if any, he will be associated with outside the workplace.
The Rand Formula has been implemented in a variety of legal contexts and although interpreted by its critics as binding businesses to violate the free choice of their employees, [5] and as having a negative effect in that it limits individual choice on whether or not to pay union dues in a manner incompatible with market economies it has been generally well received. [6] The positive reception of the Rand formula came mostly from unions and their allies [7] with conservative Canadians voicing the most opposition. [6] The rationale for the Rand formula being stated as “unions are service providers entitled to appropriate compensation for the services they provide” [6] demonstrating that the Rand formula was viewed by the judiciary as a reasonable limit on personal economic freedom in a free market economy such as Canada's. The Formula was largely perceived by businesses and individuals in Canada as a compromise between the extremes of mandatory union membership and universal non-unionism. [8]
Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong. A collective agreement reached by these negotiations functions as a labour contract between an employer and one or more unions, and typically establishes terms regarding wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs. Such agreements can also include 'productivity bargaining' in which workers agree to changes to working practices in return for higher pay or greater job security.
In labor law, a union shop, also known as a post-entry closed shop, is a form of a union security clause. Under this, the employer agrees to either only hire labor union members or to require that any new employees who are not already union members become members within a certain amount of time. Use of the union shop varies widely from nation to nation, depending on the level of protection given trade unions in general.
A union security agreement is a contractual agreement, usually part of a union collective bargaining agreement, in which an employer and a trade or labor union agree on the extent to which the union may compel employees to join the union, and/or whether the employer will collect dues, fees, and assessments on behalf of the union.
Enterprise bargaining is an Australian term for a form of collective bargaining, in which wages and working conditions are negotiated at the level of the individual organisations, as distinct from sectoral collective bargaining across whole industries. Once established, they are legally binding on employers and employees that are covered by the Enterprise bargaining agreement. An Enterprise Agreement (EA) consists of a collective industrial agreement between either an employer and a trade union acting on behalf of employees or an employer and employees acting for themselves.
An open shop is a place of employment at which one is not required to join or financially support a union as a condition of hiring or continued employment.
The duty of fair representation is incumbent upon Canadian and U.S. labor unions that are the exclusive bargaining representative of workers in a particular group. It is the obligation to represent all employees fairly, in good faith, and without discrimination.
Section 2 of the Canadian Charter of Rights and Freedoms ("Charter") is the section of the Constitution of Canada that lists what the Charter calls "fundamental freedoms" theoretically applying to everyone in Canada, regardless of whether they are a Canadian citizen, or an individual or corporation. These freedoms can be held against actions of all levels of government and are enforceable by the courts. The fundamental freedoms are freedom of expression, freedom of religion, freedom of thought, freedom of belief, freedom of peaceful assembly and freedom of association.
Lavigne v Ontario Public Service Employees Union, [1991] 2 S.C.R. 211 is a leading Supreme Court of Canada decision on freedom of expression under section 2(b) of the Canadian Charter of Rights and Freedoms and freedom of association under section 2(d) of the Charter.
Canadian labour law is that body of law which regulates the rights, restrictions, and obligations of trade unions, workers, and employers in Canada.
Electrolux v The Australian Workers' Union was a 2004 decision by the High Court of Australia that held that a bargaining agent fee did not pertain to the relationship between employer and employee and so could not be included in an enterprise bargaining agreement.
Labor relations is a field of study that can have different meanings depending on the context in which it is used. In an international context, it is a subfield of labor history that studies the human relations with regard to work in its broadest sense and how this connects to questions of social inequality. It explicitly encompasses unregulated, historical, and non-Western forms of labor. Here, labor relations define "for or with whom one works and under what rules. These rules determine the type of work, type and amount of remuneration, working hours, degrees of physical and psychological strain, as well as the degree of freedom and autonomy associated with the work." More specifically in a North American and strictly modern context, labor relations is the study and practice of managing unionized employment situations. In academia, labor relations is frequently a sub-area within industrial relations, though scholars from many disciplines including economics, sociology, history, law, and political science also study labor unions and labor movements. In practice, labor relations is frequently a subarea within human resource management. Courses in labor relations typically cover labor history, labor law, union organizing, bargaining, contract administration, and important contemporary topics.
The Wartime Labour Relations Regulations, adopted under the War Measures Act on 17 February 1944, were introduced in Canada during World War II by the government of Prime Minister William Lyon Mackenzie King. Drafted loosely on the American Wagner Act, it was the first federal legislation in Canada to legally protect the formation of unions and to force employers to negotiate with organized workers. It was a foundational framework for legislation of union rights in Canada. The provisions of the order were later replicated by Acts of all the provincial legislatures.
A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company that regulates the terms and conditions of employees at work. This includes regulating the wages, benefits, and duties of the employees and the duties and responsibilities of the employer or employers and often includes rules for a dispute resolution process.
South African labour law regulates the relationship between employers, employees and trade unions in the Republic of South Africa.
Harris v. Quinn, 573 U.S. 616 (2014), is a US labor law case of the United States Supreme Court regarding provisions of Illinois state law that allowed a union security agreement. Since the Taft-Hartley Act of 1947 prohibited the closed shop, states could still choose whether to allow unions to collect fees from non-union members since the collective agreements with the employer would still benefit non-union members. The Court decided 5–4 that Illinois's Public Labor Relations Act, which permitted the union security agreements, violated the First Amendment. A similar case was decided by the Court in 2018, Janus v AFSCME, overturning the Court's unanimous decision in Abood v. Detroit Board of Education (1977) which the appeals court had upheld in Harris.
The Fair Work Act 2009(Cth) is an Act of the Parliament of Australia, passed by the Rudd government to reform the industrial relations system of Australia. It replaced the Howard government's WorkChoices legislation, it established Fair Work Australia, later renamed the Fair Work Commission.
Saskatchewan Federation of Labour v Saskatchewan [2015] 1 SCR 245 is a Canadian labour law case on the right to strike.
Janus v. American Federation of State, County, and Municipal Employees, Council 31, No. 16-1466, 585 U.S. ___ (2018), abbreviated Janus v. AFSCME, is a landmark decision of the US Supreme Court on US labor law, concerning the power of labor unions to collect fees from non-union members. Under the Taft–Hartley Act of 1947, which applies to the private sector, union security agreements can be allowed by state law. The Supreme Court ruled that such union fees in the public sector violate the First Amendment right to free speech, overruling the 1977 decision in Abood v. Detroit Board of Education that had previously allowed such fees.
Health Services and Support – Facilities Subsector Bargaining Assn. v British Columbia[2007] 2 SCR 391 is a Canadian labour law case concerning freedom of association under section 2(d) of the Canadian Charter of Rights and Freedoms. A majority of the Supreme Court of Canada determined that the Charter protects a meaningful process of collective bargaining.
R v Advance Cutting & Coring Ltd.[2001] 3 SCR 209 is a Canadian labour law case concerning compulsory trade union membership in the Quebec construction industry. The Supreme Court of Canada considered the application of section 2(d) of the Canadian Charter of Rights and Freedoms to the Quebec law in question. A divided Court affirmed the law's constitutionality.