Legal Challenges to Interest Arbitration: Evidence From Canada

Source: Joseph B. Rose, Labor Law Journal, Vol. 66 no. 3, Fall 2015
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Although interest arbitration in Canada is used in a variety of contexts, its widest application involves the settlement of disputes in essential services. For groups such as police, firefighters and hospital workers compulsory interest arbitration is a substitute for the right to strike. In some sectors of the economy where strikes are permitted, but could potentially pose a hardship or significant inconvenience, senior governments have intervened or threatened to intervene to preempt strike action or order striking workers back to work. In these circumstances, the disputes are usually referred to binding arbitration.

As in the United States, economic and political pressures have posed a threat to the efficacy of interest arbitration and contributed to calls to reform interest arbitration schemes in Canada. This paper examines recent legal developments involving the regulation of interest arbitration and assesses the relative strengths and weaknesses of these approaches to dispute resolution. The first section examines some attributes of an effective interest arbitration system and briefly reviews several controversies surrounding interest arbitration. Next, we assess the impact of recent legislation on interest arbitration. The ascendancy of government austerity policies following the global economic crisis has led to restrictive labor laws regulating public sector bargaining and limitations on the right to strike in the private sector. The impact of government intervention focuses first on temporal limits (wage restraint laws and policies) and permanent changes to interest arbitration statutes. This is followed by referrals to interest arbitration associated with ad hoc, back-to-work laws. Changes affecting interest arbitration have included format (conventional arbitration or final offer selection), the selection process for arbitrators and arbitral criteria. In the final section, we consider both the potential and future of interest arbitration….