A Formula for Security

Out of the Windsor Ford Strike of 1945 was borne a
formula now largely viewed as vital to the continued existence of unions in
this country.  This, of course, is the
Rand Formula, which was designed by Ivan Rand for the purpose of facilitating
more pacific labour relations in Canada. When Rand came up with the formula it
was amidst one of the most significant labour disputes in Canadian history.

During the dispute, the union had two key demands: (i)
union security via a dues check-off system whereby employers would be required
to collect union dues from all workers; and (ii) mandatory membership in the
union for all workers in the company. The employer was bitterly opposed to each
of these demands.

Rand approached the dispute with an even-hand and
came up with a compromise that could work for each side. The compromise Rand
set out sought to achieve balance between the positions of the unions and the
employer and was based on a conception of organized labour as a necessary
counterweight to the power of employers.

Rand was of the view that not only is organized
labour a vital part of Canada’s labour and economic system, the power of organized labour is crucial to
the proper functioning of the system:

power of organized labour, the necessary co-partner of capital, must be
available to redress the balance of what is called social justice; the just
protection of all interests in an activity which the social order approves and

Rand recognized that unions needed economic means in
order to fulfill their vital role of being a counterweight to the power of
employers and/or capital. For this reason, the dues check-off system was deemed
to be crucial. Further, Rand reasoned that since union activity is a benefit to
all workers, it is only right that all workers should contribute to the union:
would not then as a general proposition be inequitable to require of all
employees a contribution towards the expense of maintaining the administration
of employee interests, of administering the law of their employment[2].

At the same time that Rand advocated a dues
check-off system he rejected any notion that union membership should be
compulsory. Unions often represent an ideological stance and Rand protected a worker’s
individual right not to support this or that ideology by deciding that union
membership cannot be imposed. In Rand’s estimation, workers must be free to opt
out of union membership while still being required to pay union dues.

This was the subtle genius of the Rand Formula – it
protects the collective right of unions to security via a dues check-off while
simultaneously ensuring the individual right to freedom of thought and opinion
by refraining to require union membership.

In emphasizing and ensuring union security through
the dues check-off system, Rand made clear that with financial stability comes
responsibility. Unions must act responsibly and must function in a democratic

By most accounts Ivan Rand’s wisdom has been
time-tested and is as relevant today as it was nearly 70 years ago when he helped
to resolve the Ford Strike. Despite the success of the Formula in facilitating
peaceful labour relations, anti-union forces continue to challenge the Formula.

Critics often couch their opposition to the Formula
in benign language, positioning themselves as champions of individual freedom.
The argument from the individual freedom position is that along with the s.
2(d) Charter guarantee of freedom of association comes the freedom not to associate. Less than a decade
after the Charter was enacted the case of Lavigne
v OPSEU[3]

made its way to the Supreme Court, challenging the Rand Formula and arguing
that provincial legislation allowing for a dues check-off provision to be
incorporated into a collective agreement was unconstitutional. The court
challenge was financed by the National Citizen’s Coalition, a lobby group known
to vehemently oppose organized labour.

At issue in the case was not whether union dues
could be deducted for purposes of collective bargaining, but rather whether the
use of funds stemming from the dues check-off for purposes unrelated to
collective bargaining were constitutionally valid[4].
In other words, could employees legitimately opt out of paying union dues where
the money did not go explicitly to collective bargaining purposes, or where the
worker simply did not agree with how or where the money was being spent? In
these circumstances could a worker assert a Charter right to be free from association?

In a unanimous judgment, the Court rejected the idea
that s. 2(d) of the Charter included a negative right to not associate at all. The
Court ruled that it was sufficient that a worker could distance him or herself
from the union’s political actions by choosing not to be a member of the union.
In other words, the dues go to the democratically organized union and, just as
a citizen cannot opt out of paying taxes because of disagreement with the way
the government spends the money, so union members cannot simply decide not to
pay union dues because of disagreement with the union’s use of the money. Justice
McLachlin emphasized the democratic nature of unions, referring to the Rand
Formula as a “carefully crafted balance” between the majority of the members in
the union and individual workers who do not wish to be members of the union. Justice
McLachlin also stated that the separation of dues check-off from union
membership was entirely valid, and for the Court to consider that the objects
of association can found a claim that the dues do not need to be paid would be
for the Court to engage in “one-sided justice”[5].    

Despite this clear decision from the Supreme Court
that the dues check-off was valid and an employee could not opt out of paying
dues, the challenges to the Formula continue. In a recent policy paper, the
Ontario Conservative Government made a volley at the Rand Formula, stating:
all unionized employees must pay dues or be fired, the union doesn’t have to
respond to their wishes or needs. We think that should change.

Notice that the Conservatives completely ignore the democratic nature of
organized labour. Unions hold elections, take votes on matters of importance
and give their members a voice during union meetings. They are representative
democracies. Disgruntled union members can oust their leaders. The union
leaders, therefore, must respond to the wishes or needs of its members, lest
they be replaced. By the rationale contained in the policy paper,
democratically elected governments could be subject to the same criticism as
unions. One has to wonder if the Conservatives have a problem with unions or
with democracy altogether.

Typical of the strategy employed by anti-union actors, the Conservatives
also attack the dues check-off, clothing their criticism in apparent concern
for the rights of the individual:
That’s why we are proposing to give
workers an expanded choice when it comes to becoming and remaining a union
member, or not – and to ensure a worker’s individual choice to pay union dues,
or not. It will make unions more responsive to unionized employees, and to the
needs of employers.

The Supreme Court has already ruled that the dues
check-off is a constitutionally valid system that does not prejudice workers’
rights. It is therefore clear that far from swooping in to defend the rights of
workers, the Conservatives are merely trying to break the backs of unions by
bleeding them of their financial security. It’s an employer-centric criticism
of unions, advancing a right-to-work philosophy and hiding behind individual
freedom to destroy union security. The problems that would flow from
right-to-work laws are myriad and were succinctly summed up by one of the most
famous opponents of such laws over 50 years ago. In 1961, Martin Luther King
Jr. said:
our glorious fight for civil rights, we must guard against being fooled by
false slogans, such as ‘right to work.’ It is a law to rob us of our civil
rights and job rights. Its purpose is to destroy labor unions and the freedom
of collective bargaining by which unions have improved wages and working
conditions of everyone…Wherever these laws have been passed, wages are lower,
job opportunities are fewer and there are no civil rights. We do not intend to
let them do this to us. We demand this fraud be stopped. Our weapon is our

The Conservatives’ policy paper presents a choice.
On the one hand, there is the Rand Formula, which has been right for Canada and
has been providing a relatively calm labour relations system since 1945-46 or,
on the other end of the spectrum, right-to-work laws which lead to depressed
wages and poorer working conditions and have always been the wrong route for
working men and women. On second thought, perhaps it was overly generous to
call this a “choice”.

[1] Ford Motor Co v United Automobile, Aircraft
and Agricultural Implement Workers of America (UAW/CIO)
(1946) CLLR 18,001.
[2] Ford Motor Co v United Automobile, Aircraft
and Agricultural Implement Workers of America (UAW/CIO)
(1946) CLLR 18,001.
[3] Lavigne v Ontario Public Sector Employees
[1991] 2 SCR 211.
Debra Parkes, “The Rand Formula Revisited: Union Security in the Charter Era,” (2010) 34 Man LJ 1, 223 at
[5] Supra 4 at 233.
Martin Luther King, speaking about right-to-work laws in 1961

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