July 2, 2009

Market Recovery Funds

British Columbia union amends its bylaws after judge’s ruling on dues

RICHARD GILBERT

staff writer

B.C.’s open shop construction association and an electrical workers union can’t agree on what a B.C. Supreme Court ruling on market recovery dues really means.

“This judgment calls into question the whole purpose of this fund,” said Philip Hochstein, president of the Independent Contractors and Businesses Association (ICBA).

“It is ridiculous to have union members subsidize the bids of union contractors. I would hope now that the membership will finally get rid of this fund.”

Madam Justice Gill ordered the International Brotherhood of Electrical Workers (IBEW) Local 213 to repay more than $800,000 in market recovery dues.

“The court decision said the union unlawfully deducted money to put in the fund (Electrical Industry Advancement Fund) and they have to pay it back,” Hochstein said.

The dues were deducted from the pay of electricians, who were working on Skytrain and Columbia Hydro construction projects earlier this decade.

The fund subsidizes labour costs when unionized companies bid against open shop contractors.

However, a union rep disagreed with Hochstein’s interpretation of the ruling.

“It’s not illegal,” said IBEW business manager & financial secretary Rick Dowling. “The judge never said it was unlawful or crooked. It was an honest mistake.”

The judge said the dues were improperly collected from about 430 unionized electricians employed by Hydro Constructors Ltd, Columbia Hydro Constructors, or both.

According to Dowling, the judge said dues shouldn’t have been collected on these two projects because the electricians were employed under project labour agreements.

However, the union and the employer mistakenly thought the project was an extension of the standard collective agreement.

The class action case was led by IBEW member Richard Frick, a certified electrical journeyman and member since 1988.

He began the action against the union in 2003.

“It was an important principle for me and I was subject to a lot of character assassination from my union’s leadership, but I’m glad the court has ordered them to stick to our constitution and repay the unauthorized dues,” he said.

He was awarded less than $1,600 in the judgement.

The union lost the case because it was operating under the assumption that its bylaws allowed dues to be applied to project labour agreements.

“Project labour agreements were not referred to in our bylaws, that gives us the right to collect these dues,” said Dowling.

“We changed our bylaws to reflect what the market recovery fund is meant to do, so this doesn’t happen again.”

The union maintains the practice of subsidizing union contractors by collecting dues is democratic and legal.

“Creating work is part of the union directive,” said Dowling.

“It’s part of our principle of brotherhood that we help each other.”

IBEW members subsequently voted on a new bylaw that would allow the union to collect market recovery fees on project agreements.

They voted 80 per cent in favour of the new bylaw.

The union began collecting five per cent of members’ wages, for the Electrical Industry Advancement Fund in 1992.

This was in addition to their regular monthly union dues.

“Through the 1990’s, when things were bad, we had a lot of unemployment,” explained Dowling.

“Our contractors were losing bids by a small margin to non-union contractors. The margin didn’t reflect the true cost of the contract because the non-union contractors knew exactly what wages and benefits we were paying from union contracts.”

The fund allowed union contractors to submit more competitive tenders.

“The reason he (Hochstein) doesn’t like it is because it works for us,” said Dowling.

“He wants open shop contractors to get the work. If it didn’t work, he wouldn’t touch it. He is not interested in union democracy.”

Hochstein maintained that the union should reduce its wages if it wants to be more competitive with non-union contractors, instead of artificially reducing wages using a subsidy.

Not surprisingly, the union doesn’t agree with his assessment.

“If we reduce our wages, then the non-union contractor would reduce their wages,” said Dowling. “So, it would be a drive to the bottom. We don’t feel it is right for electricians to be paid peanuts. They deserve a livable wage that can support a family.”

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