January 7, 2011 - Government of Newfoundland and Labrador

SubmissiontotheIndustrial 

InquiryCommissionInvestigating 

theVoisey’sBayLabourDispute 

SubmittedbytheNewfoundlandandLabrador 

FederationofLabour(NLFL) 

January7,2011

TableofContents 

Whoweare...................................................................................................................................................1 

IntroductionandOverview...........................................................................................................................3 

TheIdentificationofLocal,Provincial,NationalandInternationalMattersThatMayBeContributing 

FactorsinThisDispute................................................................................................................................14 

InternationalFactorsGlobalizationandImpactonLabourRights.......................................................14 

NationalFactorsForeignInvestmentwithLittleNetBenefitforCanadians........................................20 

ProvincialFactors–AReminder:LabourRightsareHumanRights.......................................................33 

LocalFactors–TheRemoteWorkplace..................................................................................................41 

FactorswhichhaveLedtotheExistingLabourManagementRelationsClimate.......................................42 

ImpactsThisDisputeMayHaveOnOtherLabourManagementRelationships........................................44 

Ramificationsofdispute,coststotheprovinceandpartiesinvolved........................................................45 

Recommendations......................................................................................................................................49 

APPENDICES................................................................................................................................................51 

 

AppendixOne..........................................................................................................................................52 

AppendixTwo.........................................................................................................................................55 

AppendixThree.......................................................................................................................................59 

AppendixFour.........................................................................................................................................69 

AppendixFive..........................................................................................................................................70 

AppendixSix............................................................................................................................................73 

AppendixSeven.......................................................................................................................................74

Protecting the Labour Rights of Newfoundlanders and Labradorians in a Globalized World 

Whoweare 

 

The Newfoundland and Labrador Federation of Labour (NLFL) proudly 

represents 25 affiliated unions, over 500 locals and 65,000 working women and men in 

every sector of our economy, and in every community of our province. For 75 years, we 

have worked to advance the cause of working people and all citizens in our province by 

promoting and advocating for a more progressive civil society where no one gets left 

behind and a fair sharing of the wealth from our economy occurs. 

We advocate for improved worker rights and stronger laws in the areas of labour 

relations, workplace rights, and occupational, health and safety as well as Workers’ 

Compensation and Employment Insurance programs that are adequate, fair and there 

for people when they need them. 

We promote strong, accessible public services such as universal health care, 

education, worker training, elder/home care and child care and early learning. We 

stand up for the principles of equality, equity and social justice and we work with our 

affiliate unions and social partners to build a better world for all citizens. And while our 

Federation does not engage in collective bargaining, we are certainly interested in 

ensuring that collective bargaining and labour-management relationships in our 

province are as strong as possible and that workers and their unions have the best 

possible labour law regime under which to operate. 

The right to belong to a union or freedom of association, the right to collective 

bargaining, and the right to strike are fundamental labour rights – recognized 

internationally through bodies such as the International Labour Organization, a United 

Nations body, and through documents such as the Universal Declaration of Human 

Rights which has also been adopted by Canada and many nations throughout the 

world. 

In addition, labour rights, while seriously eroded in Canada over the last two 

decades, were recognized by the Supreme Court of Canada in a June 2007 decision re 

Newfoundland and Labrador Federation of Labour Page 1


 

B.C. Health Services which upheld the rights of freedom of association and collective 

bargaining. 

“Further, the right to collective bargaining is neither of recent origin nor 

merely a creature of statute. The history of collective bargaining in Canada 

reveals that long before the present statutory labour regimes were put in 

place, collective bargaining was recognized as a fundamental aspect of 

Canadian society, emerging as the most significant collective activity 

through which freedom of association is expressed in the labour context. 

Association for purposes of collective bargaining has long been 

recognized as a fundamental Canadian right which predated the Charter. 

The protection enshrined in s. 2(d) of the Charter may properly be seen as 

the culmination of a historical movement towards the recognition of a 

procedural right to collective bargaining. Canada’s adherence to 

international documents recognizing a right to collective bargaining also 

supports recognition of that right in s. 2(d). The Charter should be 

presumed to provide at least as great a level of protection as is found in 

the international human rights documents that Canada has ratified. 

Lastly, the protection of collective bargaining under s. 2(d) is consistent 

with and supportive of the values underlying the Charter and the purposes 

of the Charter as a whole. Recognizing that workers have the right to 

bargain collectively as part of their freedom to associate reaffirms the 

values of dignity, personal autonomy, equality and democracy that are 

inherent in the Charter.” 1 

 

1 Supreme Court of Canada. Health Services and Support – Facilities Subsector Bargaining Assn. v. British 

Columbia, [2007] 2 S.C.R. 391, 2007 SCC 27 



IntroductionandOverview 

 

Our Federation welcomes the opportunity to present our views to this Industrial 

Inquiry Commission called to investigate and report on the labour dispute at Voisey’s 

Bay mine site in Labrador involving Vale Newfoundland and Labrador Ltd. and the 

United Steelworkers Union, Local 9508. 

We appreciate the broad scope outlined in the terms of reference for this Inquiry 

as those terms recognize that this dispute does indeed have far-reaching implications 

on the broader labour relations climate and relationships in our province: no labour 

dispute can be viewed in isolation. In our experience, labour disputes and collective 

agreements are rarely isolated to the group of workers they cover. 

For example, consider the snowball impact of the employer-driven two-tiering of 

benefits and wages in collective bargaining. While unions have made tremendous 

efforts to fend off two-tiered wages and benefits, the fact remains that the pressure from 

employers in both the public and private sectors to attack union solidarity through 

divisive workplace practices is gaining steam at collective bargaining tables across the 

country and south of the border. A November 4, 2010 article in the New York Times 

(see appendix 1) notes that even profitable companies are using the recession as an 

excuse to demand concessions and to two-tier contracts for the long-term: 

“In years past, two-tiered systems were used to drive down costs in hard 

times, but mainly at companies already in trouble. And those 

arrangements, at the insistence of the unions, were designed, in most 

cases, to expire in a few years. Now, the managers of some marquee 

companies are aiming to make this concession permanent. If they 

are successful, their contracts could become blueprints for other 

companies in other cities, extending a wage system that would be a 

startling retreat for labor.” 2 

 

2 The New York Times. November 19, 2010. http://www.nytimes.com/2010/11/20/business/20wages.html) 



 

It is clearly understood, even in the mainstream media, that what happens at one 

bargaining table can have wide-spread impacts for other rounds of collective bargaining. 

Of course, the reverse is also true. Gains made by unions in collective agreements are 

often held up as a goal in other sets of collective bargaining, especially collective 

bargaining in the same sector. For example, the CAW negotiated groundbreaking 

collective agreement language concerning same-sex benefits, long before such benefits 

and rights were extended through our laws. Once these benefits were negotiated in one 

workplace, (Air Canada), the union made this a priority in other rounds of bargaining. In 

the 1980s, the Canadian Union of Postal Workers (CUPW) was the first union to 

negotiate paid top-up for maternity and parental benefits – something that has since 

been negotiated in many collective agreements across the country. 

Labour relations practitioners - whether they are on the employer or union side – 

will consider precedents for establishing collective bargaining priorities and standards. 

In addition, labour relations strategies and tactics are often shared among unions as 

well as among employers. An example of this is the increasing use of scab labour in a 

number of recent labour disputes in our province, including Labatt Breweries, Toromont 

Cat, ACAN Windows, and Vale. 

The business of busting unions is on the rise. The growth of companies like AFI 

International (http://www.afi-international.com) which was employed by Vale in its 

dispute with the USW at Sudbury and Voisey’s Bay and which specializes in providing 

scab labour during legal strikes is an indication of the changing dynamic of industrial 

relations in Canada brought about by large multinational corporations interested in 

suppressing and violating labour rights. 

Although the Vale workers are not covered by the Canada Labour Code, but by 

provincial statutes, the principles outlined in this code as a statement of Canada’s 

labour relations tradition is important to consider. 

The Preamble in the Canada Labour Code notes that “…there is a long tradition 

in Canada of labour legislation and policy designed for the promotion of the common 



 

well-being through the encouragement of free collective bargaining and the constructive 

settlement of disputes.” 

Clearly, this test of constructive settlement of disputes is not met when strikes 

can persist for a year or two. As a labour movement we would argue that free collective 

bargaining is impeded when employers employ scab labour and actively plan and 

engage in destructive strike-breaking tactics. 

The labour movement in our province continues to be extremely concerned with 

the prolonged and damaging Vale labour dispute and the impact it has had on the 

workers, their families and communities. Lost income, family stress, and community 

divisions are just some of the devastating human impacts. For the workers, their 

families and the union, recovery will not come easy. 

Our Federation is also extremely concerned with the very clear intention of this 

employer, Vale, to change the culture of labour relations in our country, to take unionbusting 

to a whole new level (not seen since the bad old days of the early 1900s when 

the police were used against strikers), and to use their power and economic might to 

fundamentally alter the role of the union in the workplace. 

This not only damages the tradition of industrial relations in Canada, but in our 

opinion will have long-term and damaging implications for labour rights in our nation and 

in our province unless we do something to ensure workers’ democratic rights to a union 

and to free collective bargaining are enshrined through a modernized set of labour laws. 

This strike has exposed just how vulnerable workers and their unions are when 

faced with the power and wealth of a truly global corporation – one more economically 

powerful than most of the nations on the planet. Indeed, this strike has shown just how 

ineffective our labour legislation is in protecting the rights of workers – the right to strike 

has become less effective in the face of a global giant like Vale. After all, where is the 

incentive for a company of Vale’s size and scope, with mines and production throughout 

the world, to bargain in good faith with a small group of workers from northern 

Labrador? 



 

The company has all the power in this relationship unless government acts to 

right the imbalance. The workers had two choices – capitulate to the company’s 

demands for concessions or try to fight back. They chose to fight back. The government 

should not try to remain “neutral,” but rather pro-actively support collective bargaining 

structures because of the broader social and economic benefits they generate 

(including, in resources industries, capturing a larger share of resource revenues for the 

local and provincial economics. 

Even the efforts by the Union to co-ordinate job action against VALE was 

countered with their multinational might, the use of scab labour, the filing of multiple and 

frivolous laws suits against the union and its elected representatives, coupled with the 

increased use of the courts against picketers. 

(See attached power point presentation in appendix 2 by lawyers with Hicks 

Morley, a Toronto law firm engaged by Vale in the Sudbury strike. The presentation by 

Stephen F. Gleave and Allyson M. Fischer – given at a Toronto conference sponsored 

by AFI International on November 3, 2010 - lays out tactics to be considered by 

employers during labour disputes. In their presentation, “Making the Law Work for You,” 

the Vale lawyers refer to a multi-prong approach including the launching of civil actions 

against the union and “individual picketers;” disciplining “individual picketers” and a host 

of other actions.) 

Also attached is a power point presentation by AFI (slide six refers to AFI’s 

involvement at Voisey’s Bay during the current strike) and a backgrounder from AFI 

International regarding its services and “victories” with respect to assisting employers 

with labour disputes or what we refer to in the labour movement as strike-breaking and 

union-busting actions – activities designed to intimate and instil fear. (Appendix 3 and 

4) 

While employers have become more powerful and willing to engage the unionbusting 

services of companies like AFI, unions across the country have been dealing 

with sliding union density, outdated and often anti-union labour law, and huge job losses 

in many highly unionized sectors such as steel, auto and manufacturing. These job 



 

losses were largely a result of the worst economic crisis since the Great Decession of 

the 1930s and the lack of an industrial strategy for Canada. 

Workers and their unions have been on the defensive just as corporations in 

Canada (especially in the resource sector) are being bought up by multinational 

corporations - totally changing the power dynamics at the collective bargaining table. 

It has been apparent to the labour movement in Canada and in our province that 

Vale is a corporation set on changing industrial relations and the role unions play in the 

workplace. And they are getting away with it – unless recommendations from an Inquiry 

such as this one attempt to right the imbalance. Obviously, this is about more than 

changing the relationship with its Canadians workers. This is about Vale sending a 

message to its global workforce, many of whom work in countries with fewer labour 

rights than Canada. After all, if Vale can beat back its Canadian workers, won’t that 

serve to temper the expectations of workers in other parts of the world? 

In July 2010, following the resolution of the Sudbury strike, Tito Martins, the 

President of CEO of Vale, in a Brazilian newspaper (a translated copy of the article was 

obtained by the Federation) assessed that the company had achieved everything it 

wanted from its confrontation with its workers in Canada. 

Concessions including attacking the workers’ defined benefit pension plan and a 

reduction in the nickel bonus formula that had been negotiated with INCO – the former 

owner of both Voisey’s Bay and Sudbury – were seen as victories by the employer. But 

for Vale the real win was changing the fundamental role of the union in the workplace. 

The Valor newspaper article (July 13, 2010) noted that for Mr. Martins, the real issue 

“was indeed a struggle for power.” The Vale CEO noted that the new agreement with 

Sudbury was about limiting the power of the union in the relationship between employer 

and employee. 

In other words, the company felt it was successful in eroding the democratic 

rights of employees in the workplace. 



According to the translated newspaper article, Mr. Martins reportedly said "the 

interference of the union in managing the company has been reduced. Formerly, any 

grievance against the company was taken directly to the union, rather than to the 

supervisor or manager….Breaking this paradigm was what led Vale to go for a 

confrontation with workers that lasted so long.” 

The question for all of us in examining the Voisey’s Bay dispute is to consider 

how as a society we protect the labour and human rights of citizens when faced with 

such overwhelming corporate power. How do we protect the rights of 200 workers, most 

of whom live in remote northern communities and work in an even more isolated and for 

the most part inaccessible workplace, against the very real power and wealth of their 

employer. How do we ensure a fair and level playing field and how do we correct the 

grossly lop-sided imbalance in power between workers and their multinational 

employers at the collective bargaining table? 

Vale is the second largest mining corporation on the planet with well over 

150,000 employees working on nearly every Continent and with profits exceeding $10 

billion in the first nine months of 2010. 

Our Federation believes this Inquiry has an incredible opportunity to put industrial 

relations back on the right track in our province and in doing so protect the labour rights 

of the citizens of Newfoundland and Labrador. We must ensure the actions of Vale are 

not replicated by others emboldened by their union-busting tactics for this will surely 

result in more labour unrest in Newfoundland and Labrador. 

We must instead collectively – labour, government and employers - work to 

restore and indeed build a strong and mature labour relations climate that respects the 

principles of labour relations as laid out in the Preamble to Canada’s Labour Code: 

WHEREAS there is a long tradition in Canada of labour legislation and policy 

designed for the promotion of the common well-being through the encouragement of 

free collective bargaining and the constructive settlement of disputes; 

AND WHEREAS Canadian workers, trade unions and employers recognize and 

support freedom of association and free collective bargaining as the bases of effective 

industrial relations for the determination of good working conditions and sound labourmanagement 

relations; 



AND WHEREAS the Government of Canada has ratified Convention No. 87 of the 

International Labour Organization concerning Freedom of Association and Protection of 

the Right to Organize and has assumed international reporting responsibilities in this 

regard; 

AND WHEREAS the Parliament of Canada desires to continue and extend its support 

to labour and management in their cooperative efforts to develop good relations and 

constructive collective bargaining practices, and deems the development of good 

industrial relations to be in the best interests of Canada in ensuring a just share of the 

fruits of progress to all; 3 

In examining the implications and ramifications of the Voisey`s Bay strike we 

urge you to consider the unfettered growth of corporate power, foreign investment rules 

that do very little to protect workers` interests and two decades of labour rights erosion. 

We will also be asking this Inquiry to make recommendations for improvements to our 

provincial Labour Relations Act and to consider how in cases of remote work sites extra 

effort must be made to ensure worker rights are protected. 

Indeed, the mission for this Industrial Inquiry is to confirm and affirm that these 

fundamental and core labour rights actually have meaning and can be exercised in our 

society rather than trampled on by the economically powerful or dismissed at the altar of 

globalization. 

Roy J. Adams, professor emeritus of Industrial Relations at the Degroote School of 

Business at McMaster University, notes in his book “Labour Left Out” (published 2006) 

that too often in cases of private sector labour disputes in Canada, “governments have 

remained on the sidelines while employers have become increasingly bold in 

their attempt to thwart their employees human right to organize and bargaining 

collectively.” 

While, the Newfoundland and Labrador Federation recognizes this Industrial 

Inquiry and its terms of reference as a bold step by the current provincial government, 

we must also consider that approximately 200 workers (from three bargaining units) 

have languished on a picket line for a year and a half (they were joined by 60 of their 

co-workers in June of 2010) with little intervention by the provincial government until the 

 

3 Canada Labour Code (R.S., 1985, c. L-2). http://laws.justice.gc.ca/eng/L-2/page-2.html 



 

appointment of an independent mediator and the appointment late last fall of this 

Industrial Inquiry. To be fair, there were very few levers for the government to use under 

the current legislation. Further action would have required legislative intervention. 

You can imagine how disheartened and discouraging this was for the workers 

who were taunted almost from day one with the company’s intention to use scab labour 

in order to continue operations during a legal strike. Because the “workplace” was only 

accessible by plane or boat, workers had no opportunity to establish a legitimate picket 

line. If an employer can continue operations throughout a strike (with personnel other 

than managers) where is the incentive to ever find a resolution with its striking 

employees? In remote communities, large employers have a “monopsony” power. 

Contrary to the theory of competitive markets (in which there are many buyers and 

sellers), in a monopsony situation there is ONE buyer and many sellers. Because the 

sellers (in this case, people “selling their labour” are sub-dependent on one employer, 

they operate from a disadvantaged bargaining position. In this regard, strong and 

effective collective bargaining structures actually help to level the playing field. 

If there was ever a case for why anti-scab legislation is required in our province, 

the actions by Vale in this strike at Voisey’s Bay are it. Professor Adams argues: 

“in Canada the right to organize and bargain collectively exists in theory 

for most employees, but it is a right whose exercise is hobbled by 

obstacles and dangers.” 

Our labour laws, eroded in the 1990s when the provincial government acted on 

recommendations from the last Industrial Inquiry (Barry’s Ltd and FFAW/CAW re 

certification), are in desperate need of modernizing to ensure labour rights as human 

rights have real meaning and to avoid what Prof. Adams refers to as a complacency by 

governments towards the decline in collective bargaining. 

“In remaining neutral, governments behave much differently than they do 

with respect to other human rights and, in doing so, deny the human rights 

character of the right to collective representation.” 



 

Why, Prof. Adams asks, are labour rights treated so differently from other human 

rights? Why do governments stand by idly as corporations actively work to dissuade 

employees from exercising a human right? Why are we all so tolerant of norms that 

permit the treatment of workers as commodities rather than as dignified human beings? 

As way of example, while the workers at Voisey’s Bay have had the right to 

bargain collectively – how meaningful is that right if their employer can impede, 

intimidate, or spin-doctor their way around real negotiations – or as is the case simply 

wait their employees out and resume operations without batting an eyelash. 

We have no provision within the Newfoundland and Labrador Labour Relations 

Act to settle prolonged disputes unless both parties agree to, for example, send the 

matter to binding arbitration. In this dispute, the Union after, a considerable amount of 

time on the picket line requested the matter be sent to binding arbitration. The employer 

refused. This is just not good enough – not when the imbalance in power between 

workers and their multinational employers is so lop-sided. 

We must find ways and means to resolve protracted labour disputes. The NL 

Federation of Labour recommends that our Labour Relations Act is changed to 

ensure there is a way to deal with long disputes. Allowing one of the parties to 

request binding arbitration or final offer selection after a certain amount of time has 

lapsed on a picket line (six months for example) is a reasonable alternative disputesettling 

mechanism in today’s world. It will serve to prevent multinationals from using 

their incredible economic power to merely “starve” workers out until they capitulate. The 

province of Manitoba has similar provisions in their labour code. 

Our province’s current labour law regime with respect to union certification rules 

arose from a dispute in the early 1990s when the employer, Barry’s Ltd., was found 

guilty of bad-faith bargaining and who repeatedly fought his employees’ right to organize 

and to bargain collectively, but in the end was rewarded for his bad behaviour when the 

government of the day (1994) changed the law by which workers could organize 

themselves into a union. 



 

Today, workers in our province face more onerous and stringent obstacles in 

order to merely exercise their right, guaranteed them by law, to freedom of association. 

It is the opinion of our Federation of Labour that the province’s current labour law 

regime with respect to union certification allows for and indeed is complicit in its support 

of establishing a confrontational labour-management relationship from the very 

beginning of that relationship. This will be examined later in our brief as part of our 

comments with respect to “factors which have led to the existing labour-management 

relations climate.” 

It is also the opinion of our Federation that Canada’s foreign investment 

legislation (Foreign Investment Act), and the sale of Voisey’s Bay Nickel (as a result of 

the sale of INCO to Brazilian-based Vale) is a “national matter” that affects our labour 

relations climate. Just as our inadequate labour laws and the actual workplace – a 

remote and isolated site - are provincial/local factors in the current dispute 

The growing concentration of corporate power and the globalization of the 

world’s economy which allows for the creation of truly global multinational corporations 

is having an enormous impact on the labour rights of citizens and their ability to exercise 

those rights. We urge the Inquiry to consider these factors during your deliberations. 

The terms of reference which seeks the identification of “local, provincial national 

or international matters that may be contributing factors in this dispute” provides the 

panel the opportunity to not just comment on this phenomena, but also to make 

recommendations with respect to how labour rights and the rights of working people in 

our province can be protected in this new world in which we live and work. 

There is little we can do in Newfoundland and Labrador to change the 

globalization of the world’s economy. However, we can and indeed we must ensure the 

rights of our citizens, including their labour rights, are protected. 

Labour/unions have lost considerable ground in the past two decades, as labour 

laws have been changed in nearly every jurisdiction in the country. Workers and their 

collective agreements have come under attack, especially during the latest recession. 



 

As a society, we must ensure the considerable wealth being generated by our 

economy is shared. History tells us that without strong, vibrant unions we are limited in 

how we can achieve this societal goal. 

Yet unions and their hard-fought collective agreement gains have been the 

subject of much attack in recent years. Policy-makers at the federal level have tried to 

blame unionized workers (in the auto industry and their own unionized employees) for 

the fiscal consequences of a recession they didn’t cause, trying to get them to accept 

belt-tightening concessions. This government stance set the tone for private sector 

employers to follow. 

This message filtered its way to many collective bargaining tables during and 

since the great recession of 2008-2009 and this was the climate faced by the United 

Steelworkers when it went to the bargaining table with Vale in the spring of 2009. 



The Identification of Local, Provincial, National and 

InternationalMattersThatMayBeContributingFactors 

inThisDispute 

International Factors Globalization and Impact on Labour 

Rights 

Trade unions throughout the world have decried and fought back against the 

erosion of workers’ rights under globalization, viewed as a race-to-the-bottom economic 

system that is arguably at the root of the latest planet-wide financial and economic 

crisis. 

This crisis – born out of the neoliberal policies of deregulation (especially of the 

banking and financial sectors), privatization, freer (rather than fair) trade, unprecedented 

corporate concentration, and an attack on trade union freedoms - has thrown millions of 

people around the globe out of work, worsened poverty and threatened the middle 

class. Arguably that middle class was in large part built from the efforts of the labour 

movement at the collective agreement table. Today workers all over the world are 

challenging the price they are being forced to pay as a result of globalization and 

financial deregulation – or more simply greed driven by free market ideology. 

While workers, their families and communities pay a steep price for the crisis, 

multinational corporations continue to expand. For many, especially those in resourcebased 

industries like mining, their profits have stunningly rebounded. Of course even at 

the worst of the crisis, nickel prices never sank to the levels they were in the 1990s, 

$5/lb in 2008 for a short time versus $3/lb. Prices are rapidly climbing back, averaging 

just over $11/lb in January 2011. 

Yet hard-fought gains made by working people and their unions are being 

threatened particularly at the collective bargaining table – the demand by Vale with 

respect to the nickel bonus is but one example. The attack by the corporation in 

Sudbury on the workers’ defined benefit pension plan is another. 



 

This past September, retired CAW President Buzz Hargrove and newly 

appointed director with Ryerson University’s Centre for Labour Management Relations 

had the following to say about workers’ rights, the recession, concessions, globalization 

and the attempt by foreign-controlled corporations now operating in Canada to 

restructure collective agreements and change the culture of labour relations: 

“Relentless concessionary demands and a general disdain for the collective 

bargaining process by aggressive employers has unfairly put unions on the defensive,” 

says Hargrove, who has bargained with some of the biggest multinationals in the world. 

Canada must reassert “the institution of collective bargaining as a means to 

positive, peaceful and productive ends. In some cases, the bargaining table has 

transformed from a space that fosters an exchange of ideas, alleviates conflict 

and builds relationships to one that simply fuels antagonism and distrust.” 4 

Arguably, it is very difficult to trust an employer that has engaged in the kinds of 

activities that Vale has in this strike. This round of bargaining was not about fending off 

demands from the union, it was about completely changing the way labour relations is 

conducted and the role of the union in the workplace – as explained by CEO and 

President Tito Martins in a July interview with a Brazilian newspaper (and referenced 

above.) 

Part of the challenge faced today by unions and their members, says Hargrove, 

is finding ways to forge new dialogues between workers and employers. Not only does 

this require all stakeholders within the industrial relations framework (government, 

employers and union) to “actively defend the principles of free collective bargaining, it 

must also include recognition of the constitutional rights of workers to unionize – free 

from intimidation, fear and employer reprisal – which is far from reality in Canada.” Our 

Federation would add that this is also far from the reality in Newfoundland and 

Labrador. 

 

4 “Bargaining on Higher Ground”, The Toronto Star, September 6, 2010. 

(http://www.thestar.com/opinion/editorialcartoon/article/856679--bargaining-on-higher-ground) 



 

The unprecedented surge in corporate power as a result of globalization, free 

trade agreements and policies such as deregulation, privatization and free market 

economics has had an enormously negative impact on working people and trade 

unions. 

Many of Canada’s labour and foreign investment laws have failed to protect 

working people from the downsides of globalization. Labour laws and regimes in many 

provinces across Canada underwent dramatic transformations in the late 1980s and 

1990s as the right to a union and to free collective bargaining were battered by 

governments rushing to implement neoliberal policies. 

The basic tenet of labour relations – that unions are part of correcting the huge 

imbalance in power between workers and their employers – has been undermined by 

governments who have failed to protect the rights of workers. At the same time, 

governments have eagerly granted not just investor rights, but the equivalent of human 

rights to corporations through trade agreements. 

Globalization is the result of several developments and processes that are 

generally linked together. These include: 

The growth and relative importance of foreign direct investment which provides a 

greater role for multinational enterprises, accompanied by the increasing 

importance of imports and exports for virtually all countries; 

The internationalization of financial markets; 

Deregulation and liberalisation; 

Privatization of the public sector; 

And the increased coordinating role of international financial institutions such as 

the World Bank, and the IMF. 

Up until the 1970s, international economic activity was mostly in the form of 

exchange of goods and services between countries – trade being the driving force. 

Since then, the movement of capital itself has transformed the global economy. Put 

simply, instead of having a system where products are made in one country and then 



 

transported to another, companies started to make things directly in the other country. A 

central role in this changing system is played, by definition, by multinational enterprises. 

In the case before this Inquiry, it is critically important to consider this new global 

world in which we live. It is just as important to consider the incredible size, scope, 

wealth and power of such a corporation and how Canada’s foreign investment rules do 

little to protect the interests of workers and citizens. These are all matters that can and 

should be part of the Inquiry’s examination and identification of “local, provincial, 

national and international matters that may be contributing factors in this 

dispute.” 

We may not be able to turn back the clock on globalization, and indeed we may 

not want to, but we can at the very least ensure the rights of citizen rights are protected 

through good law. 

International trade during the 1980s and 1990s (supported by trade agreements 

that created corporate rights –ie. NAFTA and its Chapter 11 which allows corporations 

to sue governments as Abitibi-Bowater did in the case of Newfoundland and Labrador) 

grew twice as fast as GDP and foreign direct investment grew twice as fast as 

international trade in the 1980s and by 1.5 times faster in the 1990s. (International 

Trade Union Congress – ITUC; source) 

At the beginning of this century, the combined sales of the top 200 multinational 

corporations exceeded combined GDP of all countries on the planet minus the largest 

10. More than 50 of the world’s leading 100 economies are multinational corporations, 

not countries. (ITUC) 

In its report Globalization and Solidarity, the ITUC explains it is important when 

dealing with multinational enterprises to identify the real decision makers in the 

company. For example on labour relations issues, the head office may say that all 

decisions are made by local management. Local management may say they have no 

control because decisions are made elsewhere. Although decision-making is not the 

same in every company, one must assume that there is some role for the parent 

company. “It may be necessary to establish that the ultimate responsibility is at 



 

the headquarters level, especially if corporate behaviour violates fundamental 

workers’ rights,” says the ITUC. 

According to the ITUC, which represents 176 million workers in 151 countries 

and territories and has 301 national affiliates, the challenge of globalization is not to 

make it go away or pretend it does not exist. “It is to manage change and regulate 

and structure globalization so that it is subject to the popular will, supports 

fundamental rights and brings prosperity to as many people as possible.” 

One of the most pressing tasks facing the international trade union movement is 

to address the power and influence of Multinational Enterprises (MNEs) as part of a 

trade union response to globalization. The combination of the growth of foreign direct 

investment, technological changes, international financial markets and a wide range of 

deregulation and privatization measures have made it possible for MNEs to be in the 

drivers' seat of the global economy. 

The challenge for the international trade union movement, according to the ITUC, 

is to ensure that companies respect workers' rights in every part of the world where their 

influence is felt and to establish a genuine global dialogue between unions and MNEs. 

This is, indeed, a daunting task as trade union density and power in many parts 

of the world have been undermined by so-called neoliberal policies and labour 

legislation that favours employers. 

It is the responsibility of national and provincial governments to protect the rights 

of its citizens, including fundamental labour rights. Only then can unions hope to have 

genuine dialogue with multinationals and only then will unions be in a position to push 

for real social dialogue and partnership as promoted by the International Labour 

Organization (ILO). 

Prof. John Peters, political scientist at York University specializing in labour 

relations, in his book A Fine Balance (2002) explains that intensified globalization 

including the expansion of freer and greater international trade, transnational production 



 

and investment (like VALE’s expansion into mining throughout the planet) as well as 

financial globalization have had a negative impact on labour around the world. 5 

In an article entitled “Down in the Vale: Corporate Globalization, Unions on the 

Defensive” for the November 2010 edition of Labour/Le Travail, Dr. Peters explains that 

the strike against Vale in Canada showed that as in the rest of the world, corporations 

are readily gaining the upper hand, while unions are in trouble and falling ever further 

behind. “Over the past 30 years, globalization and neoliberalism have put union 

movements on the defensive. Across advanced industrial countries, unions are opposed 

by the increasingly antagonistic employers and governments.” 

So-called economic freedom, the freedom to make money, was at the heart of 

neoliberal economics. Its promise -- free the market, free trade and capital, and the 

economy will prosper with the benefits trickling down to everybody -- turned out to be a 

false promise. 

Worse, it was a perversion of the rights and freedoms enshrined in the UN 

Declaration of Human Rights. To the extent that benefits did trickle down, as John 

Kenneth Galbraith quipped, they were akin to the old saying that, “if you feed the horse 

enough oats, some will pass through to the road for the sparrows.” 

And in this era of growing corporate power, a mining company from Brazil began 

its global entrance into Canada and into Newfoundland and Labrador. 

 

5 John Peters, A Fine Balance: Canadian Unions Confront Globalization, 

http://www.policyalternatives.ca/sites/default/files/uploads/publications/National_Office_Pubs/fine_balance.pdf 



NationalFactorsForeignInvestmentwithLittleNetBenefitfor 

Canadians 

 

The rules governing foreign investment in Canada is another factor that should 

be considered by this Inquiry. A statement by this Inquiry as to how little the Investment 

Canada Act protects working people, their jobs and communities would be a worthwhile 

commentary. 

Ken Neumann, USW’s National Director for Canada, noted in a December 2010 

submission to the federal government proposing changes to the Investment Canada Act 

that “provisions and processes fall far short of what is needed to ensure that foreign 

investment in Canada is beneficial for our members and all Canadians. Our recent 

experience with Vale, U.S. Steel and other high-profit foreign investors has made this 

an urgent issue.” 

Ken Lewenza, President of the Canadian Auto Workers – Canada’s largest 

private sector union and one which represents members, like USW, who have felt the 

sting of foreign control at many collective bargaining tables - noted in a recent 

newspaper commentary that one of the key consequences of takeovers is they 

reposition productive Canadian assets, reducing them to mere cogs in a bigger global 

machine. “Key jewels like Stelco and Inco, which once stood on their own feet, are 

suddenly vulnerable to the bean-counting of foreign financial engineers.” 6 

And in the face of rampant globalization, Canada, many have argued, needs 

more tools to regulate foreign investment, to make sure that it helps our economy rather 

than hollowing it out. The current Investment Canada Act does not do this. It’s been 

mostly a rubber stamp since it was implemented in 1985. and should be replaced with 

more powerful measures, argue many economists, politicians, labour leaders and even 

some business leaders. 

 

6 “The High Price of Foreign Control”, The Spec.com, December 9, 2010. 

http://www.thespec.com/opinion/article/299278--the-high-price-of-foreign-control) 



 

Official data on the Industry Canada website shows it has approved 1,637 

acquisitions from 1985 through the 3 rd quarter of 2010 – and turned down only 1 (MDA). 

(The 2 nd one turned down, Potash Corp., was in the 4 th quarter and hence isn’t included 

in those stats.) This doesn’t include the 12,204 takeovers that weren’t even renewed 

since they didn’t meet the ICA size thresholds. 7 

The recent refusal to allow Australian-based BHP to takeover Saskatchewan 

Potash Corp. because it did not, according to Industry Minister Tony Clement, provide a 

“net benefit” to Canada is only the second foreign takeover ever turned down under the 

Investment Canada Act. The only other case was Ottawa’s refusal to allow the sell-off of 

the space assets of MDA to a U.S. armaments giant in 2008. Ironically, it has been the 

Stephen Harper Conservative government, arguably the most pro-business government 

in our history, that blocked both takeover bids. 

The Investment Canada Act is supposed to ensure that each takeover provides 

net benefits to Canada, but in practice the test has been applied so loosely it has 

become meaningless. Most takeovers aren’t even reviewed because they do not meet 

thresholds under the Act. When reviews do occur, as was the case when Vale 

announced it intentions to take over Inco in 2006 (approved by shareholders in 2007), 

they are perfunctory, secretive and unenforceable. 

Neumann of the USW says “our greatest single challenge in holding companies 

to their commitments under the Act is that we do not know what these commitments 

are. We have frequently demanded that they be made public and propose amending the 

Act to require such transparency.” 

The philosophical presumption behind the Investment Canada Act is that foreign 

investment is generally a good thing and Canada wants as much of it as we can get. 

The labour movement is not opposed to foreign investment on principle. After all, 

our entire auto sector is foreign-owed as are many other high-value sectors from 

 

7 Industry Canada, http://www.ic.gc.ca/eic/site/ica-lic.nsf/eng/lk-51030.html 



 

computers to aerospace. Foreign investment can bring something to Canada we don’t 

have (such as technology or engineering and design capabilities). A company which 

actually builds a business here rather than just taking over one that Canadians built is 

the kind of foreign investment which is beneficial. Better still would be foreign 

investment which did not simply remove the natural resources of our country for 

processing and manufacture elsewhere. 

But clearly investment has its drawbacks. It results in an outflow of profits and 

interest to foreign owners, dragging down Canada’s national balance of payments to the 

tune of about $40 billion per year, according to Statistics Canada. 8 

Of course crucial decisions about the future of Canadian operations, expansion 

or closure of those operations, are made somewhere else. It has been clear from the 

kind of takeovers that have occurred that foreign investors are more interested in our 

natural resources than anything else, reinforcing our backwards evolution as a resource 

supplier to the rest of the world. 

We have learned the hard way from the huge takeovers that Investment Canada 

rubberstamped during the last commodities upswing (including Inco, Falconbridge, 

Stelco and Alcan) that Canadian facilities and Canadian jobs will be jettisoned by 

foreign executives the minute they need to cut capacity or reduce debt. All of these 

takeovers supposedly promised a “net benefit” to Canada. Yet they have all hurt us. 

In the case of the Vale takeover of Inco, hundreds of jobs at its Sudbury 

operation have been lost since the deal was approved by Investment Canada. Indeed 

an investigation by The Globe and Mail showed that “the record of global mining 

companies in keeping their promises, however, might give the government second 

thoughts. The newspaper reported that commitments made under the Investment 

Canada Act are not only difficult to enforce but also provide ample room to be breached, 

amended or even rescinded. “Most foreign companies that have taken over major 

Canadian metals and mining firms in the past decade have been able to avoid living up 

 

8 Statistics Canada, http://www40.statcan.ca/l01/cst01/econ01a-eng.htm 



 

to at least some of the undertakings that were made to the government. And in most 

cases, the undertakings, which are confidential and not accessible to the public even 

under freedom of information requests, were contravened with Ottawa's blessing.” 9 

The Globe investigation noted that foreign mining firms including Vale SA of 

Brazil, Anglo-Swiss miner Xstrata PLC and London-based Rio Tinto PLC have all been 

able to eliminate Canadian jobs and, in some cases, reduce spending in Canada, less 

than three years after purchasing the assets of Inco, Falconbridge and Alcan 

respectively. This was done despite undertakings made to Investment Canada to 

maintain staffing and spending. 

The Brazil-based mining giant Vale spent $19 billion to purchase Canadian 

mining company Inco. At the time, it was one of the largest foreign takeovers in 

Canadian history. 

Voisey’s Bay Nickel was discovered by two prospectors in 1993, freelancing for 

Diamond Field Resources. It was considered one of richest nickel discoveries in 

Canadian history. Soon two of Canada’s largest mining corporations entered a bidding 

war for the Voisey’s Bay resource. In the end, Inco won the war against Falconbridge 

and spent a whopping $4.3 billion for the discovery. Development of the mine was held 

up as the province of Newfoundland and Labrador insisted that the ore from the mine be 

processed in this province rather than shipped out, providing long-term jobs for 

Newfoundlanders and Labradorians. 

These are exactly the kind of demands governments need to be making of 

multinationals as part of the condition of reaping the benefits of the province’s rich 

resources. Indeed, the current government has played extremely tough with 

multinationals wishing to cash in on the province’s rich natural resources. And that 

stance has resulted in not just increased royalties for the province, but equity shares in 

several oil and gas developments. 

 

9 “Broken Promises Mark Foreign Mining Deals”, The Globe and Mail, October 5 th , 2010, 

http://www.globeadvisor.com/servlet/ArticleNews/story/gam/20101005/RPOTASHINVESTMENTCANADA 

HOFFMAN1005ATL# 



 

Arguably, the province’s “no more giveaways” philosophy has turned 

conventional wisdom in Canada on its ear. After all, if a little province like Newfoundland 

and Labrador can go to the bargaining table with big oil and big mining and win 

considerable gains, why couldn’t a province Alberta or Ontario? 

The NL Federation of Labour has supported the province’s tough stand in dealing 

with multinationals and in protecting our natural resources. But we have also been very 

clear that no more giveaways must also apply to fundamental and core labour rights. 

In May 2010, Vale Inco became Vale viewed as a bold step for the company onto 

the global stage. Since then the company’s growth has continued unabated as it 

expands throughout the world. 

According to Prof. John Peters, Vale financed numerous mergers and 

acquisitions over the course of the past decade that allowed it to quickly outpace far 

larger mining companies. In the early 2000s, mining’s global capital market was 

about$180 billion and the largest firms BHP Billiton and Rio Tinto had market 

capitalization rates under $30 billion. Inco and Falconbridge – the two largest 

Canadians companies – were one-fifth the size of the largest firms. 

By 2010, according to research by Prof. Peters, mining had been completely 

transformed. Inco and Falconbridge, along with hundreds of other small and medium 

sized mining operations had completely disappeared – swallowed up by the big mining 

giants. Market capitalization rates of the mining giants expanded more than four-fold in 

a decade to capture more than 55% of the global market capitalization of $1.3 trillion 

and close to 50% of all revenues. Over this time BHP and Xstrata grew to more than ten 

times their original size. Vale expanded more than twenty-fold and climbed the ladder 

of globally diversified mining giants. 

Prof. Peters, quoting a PricewaterhouseCoopers report, notes that the top 40 

mining companies in the world over the 8-year period 2001-2009 saw annual net profits 

grow by twelve-fold to $50 billion. It was in this context of rapid global growth and overexpanding 

profits that Vale entered Canada. 



According to labour economist Andrew Jackson, 54% of Canada’s largest 

corporations are now foreign owed. The sell-off of corporate Canada includes the entire 

steel industry – Stelco, Dofasco, Algoma, IPSCO – which was sold off between 2005 

and 2007 to foreign conglomerates. Other notable sell offs include Alcan, Inco, a huge 

chunk of BCE, Four Seasons Hotels, Falconbridge, Vincor International, Hudson’s Bay 

Co., ATI Technologies, Intrawest, Western Oil Sands, Labatt, MacMillan Bloedel, JDS 

Fitel, Seagram’s, Eaton’s, Corel, CP Ships Ltd., Molson’s, Canadian Pacific hotels, and 

Noranda. Even Tim Hortons and hockey equipment maker Bauer are no longer 

Canadian-owned. 

Even some Canadian business leaders are beginning to raise the alarm over this 

unfettered sell-off. Thomas Caldwell, chairman of Caldwell Securities, a Bay-Street 

Investment firm, took out a full page ad in both The Globe and Mail and the National 

Post decrying the selling off of so many Canadian corporations. There is growing 

concern that the entire round of recent mining take-overs represents a disaster for 

national economic development. 

In the weeks since the Potash deal was thwarted, two other foreign corporations 

have demonstrated through their actions exactly why Canada needs a very different 

approach to regulating foreign investment. U.S. Steel locked out its workers in Hamilton 

continuing its ruthless drive to suppress compensation and pensions here in Canada, 

and Vale announced that it would be closing its Thomson, Manitoba smelter, destroying 

the lives of hundreds of families. 

According to labour economist Jim Stanford incoming foreign direct investment 

has grown dramatically in Canada in recent years, rising from 20% of our GDP in 1994 

to 36% today. That’s the highest level of foreign control since WWII. “Some $300 billion 

in foreign investment surged into Canada in the last decade – like an economic 

tsunami.” 10 

Over half of that investment was concentrated in the mining, oil and gas, and 

primary metals sectors – sectors that also dominate the Newfoundland and Labrador 

 

10 Jim Stanford, “The Ins and Outs of Foreign Investment” November 12 th 2010, http://www.caw.ca/en/9619.htm 



 

economy. Takeovers have also contributed to Canada’s visible deindustrialization, since 

foreign owners are mostly interested in our resources and bulk commodities, not in 

developing Canada as a diversified, sophisticated nation. It is important to note that the 

considerable investment in the secondary processing facility at Long Harbour was the 

direct result of government insistence in its negotiations for the 2002 Development 

Agreement with the previous Canadian owner, Inco. 

As Premier Danny Williams showed with AbitibiBowater a government has both 

the responsibility and ability to stand up to corporations that disrespect their 

responsibility to the communities where they do business. 

Canada’s policy with respect to foreign investment is not something the province 

of Newfoundland and Labrador can change – at least not on our own, although our 

province could certainly mount considerable pressure on the federal government to do 

so. 

What we can do as a province and what, we should do, is ensure citizens rights, 

including labour rights, are protected and even enhanced as a result of the growing 

presence of multinationals in our province; that we ensure we are getting a fair piece of 

the economic pie and that this pie is shared among the citizens of our province, 

including the people who work for these multi-nationals. The province can also alter the 

economics and net benefits of incoming foreign investments through the development 

approval process, environmental regulations, labour law, taxation and royalties. 

There is little doubt that Vale is making money in this province. According to data 

from the Newfoundland and Labrador government (Natural Resources and Finance 

Departments), Vale’s Voisey’s Bay had production valued at $1.2 billion in 2008, $580 

million in 2009 (workers went on strike in August of that year and the operation 

experienced a shutdown in July) and $700 million in 2010 – a time in which the 

workforce was on strike for the full year. The below chart is an indication that Vale has 

continued with its production at Voisey’s Bay despite a legal strike by its workforce. In 

addition, indications are the company dramatically increased its production in the fourth 



 

quarter of 2010 bringing output closer to its 2008 levels. What this tells us is Vale 

achieved what it appears it has wanted – a non-union shop in a certified workplace. 

Vale 

Production/Voisey’s 

Bay 

UptoQ32010 2009 2008 2007 

(000metrictons) 

Nickel 17 40 78 59 

Copper 17 24 55 42 

Cobalt .235 .971 1.695 1.239 

Source:ValeProductionReportavailableatVale.com 

Profits Surge as NL Workers’ Share Falls 

In his book Economics for Everyone, Jim Stanford notes that “the employment 

relationship reflects an inherent asymmetry between workers and employers. Individual 

workers need a job to support themselves and their families. Their work choices may be 

limited by unemployment, labour market segmentation, or a shortage of alternative 

employers (especially in smaller communities). An employer, on the other hand, can 

easily replace any individual worker (unless they possess some very special skill). So at 

the individual level, workers need their employer a lot more than their employer needs 

them.” 

In other words, the imbalance in power between workers and their employers is a 

byproduct of this fundamental and inherent employment relationship. 

But as Stanford explains collectively employers depend on their workforce to 

perform all or most of the work required for a private company to operate and generate 

profits. Workers realized very early in the history of capitalism that they could make 

gains by combining forces to take advantage of this bargaining power, and negotiate 

collectively for better wages and working conditions. It is difficult (although not 

impossible as Vale proved throughout the Voisey’s Bay strike) for an employer to 



 

replace their whole workforce at once. Therefore, workers have much more clout 

dealing with their employer collectively rather than one at a time. 

And while early efforts to organize unions met with often ruthless opposition, by 

the mid 20 th century unions had won broad appeal and acceptance 

This started to change with neoliberalism. “Business has returned to a more 

confrontational attitude, and has been working hard to undermine the power of unions 

ever since,” says Stanford. “The legal, economic, and cultural environment facing 

unions has become hostile in most capitalist countries. The experience has been worse 

in the US, where unionization has been slipping steadily; unions there now represent 

barely one-tenth of the workforce, largely explaining why America’s economy has 

become the most lopsided toward business of all the developed countries.” 

Stanford goes on to argue that globalization and the rise of MNCs has meant that 

this imbalance or asymmetry in power is even greater than before, thanks to the extra 

flexibility, diversification, and mobility which is accorded to corporations. 

In the past, when a company depended on the revenue and/or output from one 

particular facility, the workers could try to level the bargaining field by unionizing. 

Today, a company like Vale can survive for long periods of time without revenue or 

output from any particular plant – and there’s no realistic hope that workers can band 

together across borders to impose a larger cost of disagreement on the employer and 

thus correct somewhat this imbalance in power. 

That’s why we get very long strikes/lockouts like this one, where the employer is 

clearly on the offensive, and willing and able to wait out the workers for very long 

periods of time. This imposes large costs not just on the workers, but on the whole 

community and the regional and provincial economies. In addition, it creates huge 

divisions in communities when neighbours are sought out and used as replacement 

workers against neighbours. We must all understand the incredible potential for volatility 

that such circumstances can perpetuate. 



 

As Stanford points out in his book Economics for Everyone: the ability of 

unions to organize and bargain effectively depends on several factors: 

• The legal climate Specific laws regulating union organizing, bargaining rights, the 

right to strike, and other aspects of bargaining can alter union success in subtle but 

powerful ways. 

• The attitudes of workers Do workers demand better treatment from their employers, 

or have they been conditioned to accept their lot in life? Can they stick together in order 

to win things collectively? (Trade unionists call this solidarity.) 

• The cost of job loss The same factors that enforce higher labour discipline in the 

workplace also make it harder to organize unions. Higher unemployment, reduced 

social programs, and sharper labour market segmentation all undermine union activity – 

not least because union activists may fear being fired for their activities. 

• Productivity If total productivity is growing rapidly, then workers can win higher 

compensation without harming profits or threatening their company’s future. On the 

other hand, if higher productivity comes about mostly through greater labour intensity, 

then union activity may be undermined in highly disciplined workplaces. 

• Competition If competition between companies is very intense, then it is difficult for a 

union to make gains with one employer – since it may then experience higher costs, 

lower profits, and lower sales than its competitors. Competitive pressures have 

definitely become more intense in recent decades in most industries, and this has 

undermined union power. The alternative for unions is to organize and bargain for all 

workers in an industry at once (using sectoral or pattern bargaining techniques); this is 

more effective, but harder to attain. 

Market forces will never guarantee workers a decent share of the wealth they 

produce – even under vibrant economic and productivity conditions. In the case of Vale 

and its Voisey’s Bay employees, the challenge has been for the union and its members 

to make gains through collective bargaining so that over time wages, benefits and 

working conditions are comparable to the norm in the Canadian mining sector. This is 



 

certainly difficult to do in just two rounds of collective bargaining, but it is even more 

challenging when you consider the huge and growing imbalance in power between the 

workers, their union, and Vale. Efforts to reach a first collective agreement in 2006 

resulted in a 9-week strike. And today, 17 months and counting on a picket line, the 

workers still do not have their second collective agreement. 

Stanford argues that no society without strong and effective unions has ever 

achieved truly mass prosperity. The degree of unionization is one of the most important 

factors determining wage levels, the incidence of poverty, and hours of work. “In my 

view, the ability of workers to protect and strengthen their unions will be essential if they 

are to limit and eventually reverse the negative economic and social consequences of 

neoliberalism,” writes Stanford. 

We merely have to examine Newfoundland and Labrador society to see the 

positive benefits unions have made to the economic and social well-being of tens of 

thousands of working people. Indeed unions are in large part responsible for the 

creation of a middle class in our province. This has been achieved at the bargaining 

table and because unions are one of the driving forces behind progressive social 

legislation such as higher minimum wages, early learning and child care supports for 

working parents, and a fairer taxation system to allow for a better sharing of the wealth 

generated by our economy. 

Unions and collective bargaining are critically important and more necessary than 

ever before in our province as we seek to ensure the wealth from our natural resource 

extraction is shared with workers, families and all society. In other words, governments 

need to support unions’ efforts through collective bargaining to share the wealth. 

It is important to note that the share of our province’s GDP going to corporate 

profits is much higher than any other province – more than 2.5 times higher than the 

national average – standing at a whopping 36.69% in 2008 compared to the Canadian 

average of 13.56%. 

Since 1999, the share of our GDP going to corporate profits has been rising 

dramatically in line with the expansion of the oil and mining sectors and the incredible 



 

surge in commodity prices. Conversely, and quite worrisome is the share of wages and 

salaries as a percentage of the province’s GDP. This share is lower than other province 

in Canada and has fallen just as dramatically as corporate profits have surged – an 

18.6% decline between 1999 and 2008. 

Less than 30% of our GDP goes to wages and salaries for working people, 

compared to the Canadian average of over 51%. Newfoundland and Labrador has the 

lowest percentage of its GDP going into wages and salaries of any province and the 

highest percentage going to corporate profits (See Appendix 5). 

Newfoundland and Labrador is the only province where (in 2008) corporate 

profits exceeded total wages and salaries. This, according to Stanford, is extraordinary. 

The pie is divided very differently in Newfoundland, compared to the rest of Canada. 

One can argue that because so much income goes to corporate profits, 

Newfoundland and Labrador still has below-average personal income (9 th out of the 10 

provinces) despite having above-average GDP per capita (3 rd in Canada). 

The inability of Newfoundland and Labrador workers to attain a reasonable and 

normal share of the new wealth they produce in personal income (ie. wages and 

salaries) is thus holding back the whole provincial economy. That’s why government 

must be an active player, on the side of Newfoundland and Labrador workers, in helping 

them win and defend a fair share of income in high-value industries like oil and gas and 

mining. 

Outside the multi-year $2.8 billion investment in the Long Harbour project, once 

again a result of government intervention and policy, what is extracted for the most part 

in profit by global companies like Vale never “touches down” in Newfoundland and 

Labrador’s economy. It flows back to corporate headquarters and is reinvested in 

ventures and takeovers in other parts of the world or divided up among shareholders. 



 

Newfoundlanders and Labradorians have a long history of seeking to remedy the 

lop-sided benefits that flow from our rich resources. While that is beginning to happen 

as a result of some hard-nosed bargaining, much more needs to be done to ensure not 

just that we get a fair return on resources to provincial coffers through taxes and 

royalties, but that workers employed by these multinationals have an opportunity to 

prosper. 

One way of giving working people a fighting change at the bargaining table and 

continue to expand the province’s middle class is for our government to put in place a 

set of labour laws that protect rights in these new times in which we live. And we would 

strongly encourage this Inquiry to made recommendations in this regard. 



ProvincialFactors–AReminder:LabourRightsareHuman 

Rights 

 

Protecting rights while fixing the inherent imbalance in power – labour laws for 

the times 

For the past two decades, Canadians, including Newfoundlanders and 

Labradorians, have seen a serious erosion of our fundamental labour rights – the right 

to a union (freedom of association), the right to free collective bargaining and the right to 

strike. In that period, governments in Canada have passed nearly 190 pieces of 

restrictive and regressive labour legislation 11 . These changes in labour laws have 

made it more difficult for workers to organize and tougher for unions to make progress 

in collective bargaining. 

Newfoundland and Labrador governments have passed their share of regressive 

and anti-union labour legislation, including the changes to the province’s union 

certification rules under Premier Clyde Wells. These changes came out of the Industrial 

Inquiry called to investigate the situation at the fish plant in Curling Newfoundland, 

owned by Barry’s Ltd. Recommendations in a majority report of that Commission of 

Inquiry resulted in government action to change the province’s Labour Relations Act 

with respect to union certification. 

In 1994, the right of automatic union certification when a clear majority of workers 

agreed to join a union by signing a card was lost. In effect Newfoundlanders and 

Labradorians who now wish to exercise their constitutional right to join a union must not 

just sign a union card as an expression of their wishes, they must also participate in a 

second vote (secret-ballot vote), held by the Labour Relations Board. In addition 70% of 

those in the bargaining unit must take part in the secret ballot vote or those who do not 

participate are counted as no votes for the union. Imagine if such a test had to be met in 

general elections!!! 

 

11 www.labourrights.ca 



 

While the Labour Relations Board could order a certification vote previous to this 

change in legislation even if the union had a clear majority of 50% +1 of the workers in a 

particular workplace “signed up”, many certifications were successful without boardordered 

votes based on union card evidence. 

The erosion of this right to join a union has resulted in fewer certifications in the 

province. In addition, there is little doubt that the requirement of a vote has allowed for 

considerable employer interference in the certification process. And this often results in 

many labour-management relationships getting off to a very bad start. Our Federation 

contends that this was exactly the case in Voisey’s Bay. 

Ironically, when we elect governments we only have to vote once. A single vote 

in an election and our choice is made. But when it comes to exercising the right to have 

union representation in your workplace, workers in our province are required to vote 

twice before their views are accepted, once when they sign a union card and again in a 

representation vote. Indeed, this is considerably more onerous and stringent than voting 

in current municipal elections. In the past two elections, citizens of St. John’s have been 

able to elect their municipal government through a mail-in ballot – not unlike the 

requirement to sign a union card except in the case of a union card it requires the 

signature of the new member and the signature of a witness. No such requirement is 

needed in the mail-in ballot used to determine the election of our municipal government 

or even in general elections when voters participate in mail-in ballots. Instead the 

success of such voting systems is largely left up to the honour system. 

Representation votes are now required in about half the jurisdictions across the 

country. The other jurisdictions, including federally, recognize the signing of cards as a 

legitimate vote for a union. 

The labour movement believes having to declare your choice twice is really about 

giving employers the opportunity to change workers’ minds. This is often achieved 

through threats and intimidation. 



 

Can you imagine the difficulty workers faced in trying to exercise their right to a 

union and the USW faced in trying to organize workers at Voisey’s Bay – a remote mine 

site where the Union because of our labour legislation is not permitted to sign union 

cards in the workplace? Added to the challenge was the multitude of contractors and 

joint venture companies acting as employers at the mining site. Each individual 

contractor and group of workers represented a separate certification organizing drive 

and those workers lived in dozens of communities throughout Newfoundland and 

Labrador. After going through considerable lengths just to exercise their constitutional 

right to belong to a union, the Voisey’s Bay workers were then forced into a long, drawnout 

battle just to get a first collective agreement. While on strike, word leaked out that 

the company they worked for Inco was being bought out by Vale, adding even more 

uncertainty to the mix for the workers. 

Our labour laws require workers to wage a major campaign to establish collective 

bargaining rights in their workplaces – even though such rights are guaranteed, as part 

of our Charter of Rights and Freedoms, as confirmed by the Supreme Court of Canada, 

as part of provincial statutes and as stated in international laws that have been 

supported by Canada, including the Universal Declaration of Human Rights. 

Yet workers have to win their basic rights of freedom of association and the right 

to bargaining collectively. Individuals are told they have human rights, but not as 

workers. We believe that workers’ rights are human rights. As Prof. Roy J. Adams 

points out in his 2006 book Labour Left Out: 

Respect for human rights is an essential element of democratic society. In 1998, 

the ILO reaffirmed solemnly, and with Canada’s strong support, that a set of core 

labour rights are human rights. Among them are freedom from child labour, 

discrimination and forced labour, freedom of association, and “effective 

recognition of the right to organize and bargain collectively.” 

With respect to some human rights, we have made considerable progress in 

recent years. A few generations ago, women had no right to vote and few legal 

rights. They were treated in law as appendages of their male spouses. Not long 

ago, Japanese-Canadian citizens were rounded up and put into compounds--not 

because they committed any crime, but simply because of their ethnicity. Even 

more recently, our Aboriginal peoples were basically treated as wards of the 



state with rights and freedoms much inferior to those of fully-fledged Canadian 

citizens. Until even more recently, if you were disabled, you were shunted aside 

and prevented from participating fully in Canadian life. 

For these human rights, we have experienced a revolution in Canada. In every 

province and territory, there are now Human Rights Commissions mandated and 

equipped to protect and promote the rights of these groups. 12 

But labour has been left out of the human rights revolution. Instead of 

being effectively protected and promoted, the rights of labour have been 

going in reverse. 

Not surprisingly, at the same time, as these union rights have been eroded, 

governments have refused, in the face of growing corporate power, to introduce new 

laws that protect labour rights and the collective bargaining process such as banning 

the use of scab (replacement) labour during legal strikes. Scab labour erodes labour’s 

right to free collective bargaining and the right to strike. 

As noted in our overview section, at a recent AFI International conference in 

Toronto, the test case used during one panel discussion was the strike by USW at its 

Vale operations in Sudbury and Voisey’s Bay. 

According to its website, AFI International helps clients manage work stoppages 

due to strikes, lockouts or plant closures safely and securely. In addition to providing 

advice, security, and surveillance, AFI supplies scab labour during legal strikes. 

The Vale-strike panel discussion included lawyers from the firm Hicks Morley, 

Vale’s security expert and a representative from AFI. Vale had engaged the services of 

AFI in its dispute with the USW at Sudbury and Voisey’s Bay (see appendix three). 

The company’s lawyers, Hicks Morley, in the Sudbury strike referred to the plan 

to bring civil actions against representatives and union members to sue them for lost 

profits. Similar tactics have been used against local union representatives with USW in 

Newfoundland and Labrador. 

 

12 Roy J. Adams, Labour Left Out Canada’s Failure to Protect and Promote Collective Bargaining as a Human 

Right, Toronto, Canadian Centre for Policy Alternatives. 



 

This was also outlined in the journal article for the November 2010 edition 

Labour/ Le Travail by Dr. John Peters. (Down in the Vale: Corporate Globalization, 

Unions on the Defensive, and the USW Local 6500 Strike in Sudbury, 2009–2010) 

The York University Political Scientist explains that “Vale had Hicks Morley use 

every legal option to tie up union resources in the courts and at the labour board. It fined 

nine workers and sued them for damages ranging from $75,000 to $120,000 because of 

alleged incidents on picket lines. Twice it levied law suits of $25 million against the 

union for not following picket line protocol…In these and other ways, the company and 

its legal counsel carried out a systematic campaign to discredit and intimidate striking 

workers.” Peters notes that while long strikes were well-known to the miners of Sudbury 

– as they are to the miners of Newfoundland and Labrador including a lengthy strike by 

workers at IOC in the 1980s over health and safety – “right from the beginning of the 

2009 strike, observers agreed the conflict was unique. Most notably, Vale continued to 

run and upgrade its operations both during the shutdown prior to the strike and over the 

subsequent 12 months.” Estimates are that Vale was able to reach 30% operational 

capacity during the Sudbury strike. 

In Newfoundland and Labrador, we expect at least that level of operational 

capacity was obtained during the strike by Local 9508 when you consider the more 

favourable conditions a remote mining site like Voisey’s Bay provided the company and 

as highlighted by the Voisey’s Bay production numbers reported above. (Example: 

35,000 tonnes of nickel, copper and cobalt in the first nine months of 2010 and 

production value of over $700 million for the entire year). 

Vale also engaged in similar tactics of using contract staff to do maintenance, 

upgrading work and replacement workers to do the jobs of striking employees. Indeed, 

on numerous occasions, Vale representatives were quoted in local media about the 

company’s intention to “ramp up” production. In fact just hours before heading back to 

the bargaining table in July 2010, the company said the following in an interview with 

Dow Jones Newswire (see appendix 6): 



Negotiations to end a year-long strike at Brazilian mining company Vale 

SA's ( VALE | PowerRating) Voisey's Bay operation in eastern Canada will 

resume Monday, although the miner is currently working on plans to ramp 

back up to full production regardless of a deal being signed, it said Friday. 

The facility is operating at 35% capacity after union members took strike 

action 12 months ago alongside workers at Vale's Sudbury operation in 

Ontario, who last week ratified new five-year collective bargaining 

agreements with Vale and will be returning to work over the coming 

month. 

Vale spokesman Cory McPhee told Dow Jones Newswires that while talks 

are scheduled to resume Monday, the company has a plan to "ramp up 

production regardless of a settlement.” 

"That is not meant to be threatening," he said. "It is just what the business 

demands." 13 

These are not the statements of an employer interested in engaging in real 

collective bargaining or in reaching an agreement with its employees. These kind of 

inflammatory remarks only add to an already volatile and damaged labour-management 

relationship. 

Also contributing to the anger and discontent of the workers was the well-known 

fact that scabs/replacements in the mining site were being used to break their strike and 

being paid handsomely and substantially more than the striking employees had been or 

would be under the proposals from the company. A pay stub obtained by the Union 

indicated that the regular hourly rate of pay for a replacement worker in July 2010 was 

$40 a hour for 64 “regular hours of work” for a total of $2560.00 in gross pay, plus an 

additional $2,640.00 for 44 hours of overtime hours in the same week, plus another 

$2240.00 in misc pay and $297.60 in vacation pay for a total of $7737.60 gross pay in a 

single week. Ironically, the issue of overtime pay was one of the unresolved items at the 

bargaining table. 

 

13 DJ Vale: Voisey's Bay Production To Ramp Up, Strike Talks Resume, Trading Markets.Com, July 16 th 2010, 

http://www.tradingmarkets.com/news/stock-alert/vale_dj-vale-voisey-s-bay-production-to-ramp-up-strike-talksresume-1045965.html 



 

At the AFI conference this past November in Toronto, Peter Kavanagh, the 

director of emergency management and security for Vale, explained in his panel 

presentation that the Brazilian company had a different attitude towards labour relations 

and was more than willing to operate through a strike. Inco had not done this in the 

past. This was also confirmed in the journal article by Dr. Peters. 

According to reports regarding the AFI panel discussion (obtained by the 

Federation from a participant at the conference), the company representative noted that 

Vale started working on its strike contingency plan 12 months prior to the end of the 

collective agreement. The company spent considerable time researching “labour 

disruption specialists” and settled on AFI. 

There is only one reason a company uses scab labour. It is to break the strike 

and if possible the union. Employers can sugar coat their actions, but ultimately the 

decision to do so is an attack on the union. Banning replacement workers is merely one 

way in which workers and their unions can challenge corporate power. Otherwise, 

where is the incentive for employers – especially large employers such as Vale to 

settle? Ironically, it is usually the bigger employers who use replacement workers 

creating a damaging labour relations climate for everyone when they do. This is 

fundamentally unfair to those employers who respect – maybe grudgingly in some 

cases, but respect nonetheless – unions and the rights of their employees to bargain 

collectively. 

Obviously, anti-scab laws do give some power to workers, but by no means do 

they tip the balance in their favour. Imagine trying to argue – with a straight face - that 

Vale needed the ability to use scab labour against its 200 workers in Voisey’s Bay in 

order to be on a level playing field with those workers. 

This is outrageous and yet these are the kinds of arguments made by those who 

oppose a ban on replacement workers. Two jurisdictions in Canada have such 

legislation - Quebec and British Columbia – and those laws withstood the change of 

governments from progressive to more pro-business or right-wing administrations. 

Certainly if the law was bad for business, B.C. Premier Gordon Campbell, one of 



 

Canada’s more pro-business premiers in recent times – would have eliminated the 

provisions during his term. 

Our Federation believes that the underlying sources of conflict that form the basis 

of the employment relationship are at the heart of anti-scab laws. Fundamentally this is 

a discussion about power and who wields it. It is why a law banning the use of scabs 

should not only matter to workers and their unions, but to anyone concerned about the 

growth of corporate power in our world and its consequences for democracy. 

The use of scab labour in the Voisey’s Bay strike has been a factor that has 

contributed to the length of the industrial dispute. It has undermined the right of these 

workers to free collective bargaining; it has allowed the company to prolong the strike 

and continue production and it has minimized the economic pressure the workers could 

hope to bring to bear on this multinational. In addition, it will cause long-term discord 

between workers and their employer when they return to the workplace. 

But perhaps just as importantly as the impact on the labour rights of the workers, 

is the long-term discord and divisions this will have on northern communities where 

some of the replacement workers were recruited. 

This is a shameful indictment of just how far a corporate giant will go to achieve 

its end goal of concessions, a weakened union and reduced workplace democracy. 



LocalFactors–TheRemoteWorkplace 

 

It is the view of our Federation that the location of Voisey’s Bay, a remote 

workplace, accessible by air or sea, just south of Nain and north of Happy-Valley Goose 

Bay, has been a contributing factor in this dispute. 

The fact that the mining corporation could easily transport replacement workers 

into the remote site without having to physically cross the USW’s picket line, set up in 

the community of Happy Valley-Goose Bay was just another card stacked in favour of 

the company. It rendered the workers’ picket line ineffective. 

It is important for this Inquiry to consider a scenario with this same company 

attempting similar actions at its Long Harbour operations in which case replacement 

workers would have been forced to cross a “real picket line” and where the scrutiny of 

the media and therefore the public would be much more intense. 

Knowing how volatile these situations can become, there is a strong likelihood 

the story of this dispute would be quite different than the one that has evolved in the 

past 17 months. 



FactorswhichhaveLedtotheExistingLabour 

ManagementRelationsClimate 

 

While the Federation is not party to the labour-management relationship at the 

Voisey’s Bay workplace, we do have a number of comments to make with respect to 

this dispute and how certain conditions and actions once taken will result in an 

acrimonious and damaged labour-management relationship. 

The Federation has already addressed some of these factors throughout our 

submission including our contention that a difficult and acrimonious relationship 

between the employer and the union arose from the get go – during the organizing drive 

in the workplace - and from all appearances it seems this relationship never improved. 

Indeed, it is evident that it has only worsened. 

Negotiations for a first contract ended in a 16-week strike in 2006. As in is the 

case in this strike, the employer used replacement workers. This did not bode well for 

building a respectful labour-management relationship. 

The fact that the employer, quite a profitable employer, went to the bargaining 

table in 2009 demanding such concessions has also contributed to this current labourmanagement 

relations climate. 

The tactics engaged by the employer as outlined above in the most current 

labour dispute including frivolous and intimidating law suits against workers and locally 

elected union representatives and the use of scab labour (pitting worker against worker 

and neighbour against neighbour) have contributed to what can, at best, be described 

as a severely damaged labour-management relationship. The fact that the strike 

lingered past the one-year mark before the provincial government acted to appoint an 

outside mediator allowed for the dysfunctional relationship to worsen. The fact the 

government did not act sooner, that it refused to ban scab labour, was viewed by many 

workers as a government that was siding with the corporation. 



 

The corporation continued production and to rake in obscene profits while the 

workers languished on the picket line. This is more than most could stomach as so 

many of the workers felt powerless as their labour rights were meaningless in the face 

of such unfettered corporate power. 

The fact that our province’s Labour Relations Act provides no recourse (outside 

the extraordinary measure of appointing this Industrial Inquiry Commission) in which 

unions and/or employers can get long strikes resolved (unless both parties agree) has 

certainly contributed to the length of this strike. For example, had the union even without 

the employer’s consent been able to request that this matter be sent to binding 

arbitration, this strike would never had reached its one-year mark. 

In fact, the NL Federation of Labour, in a letter to Premier Danny Williams in July 

2010, requested the government send the matter to binding arbitration. (Appendix 6) 

The Federation and leaders of our affiliated unions reiterated that request in a 

September 2010 letter to the Premier (see Appendix 7). 

At that time, we requested that at the very least, the province appoint an outside 

mediator. Once the collective bargaining relationship has failed and failed so miserably, 

there must be legislative provisions to ensure a settlement can be reached. 



ImpactsThisDisputeMayHaveOnOtherLabour 

ManagementRelationships 

 

In the Introduction and Overview section of this submission, we outlined how the 

practice of labour relations and collective bargaining outcomes are rarely isolated to the 

group of workers or workplace covered by a particular set of contract negotiations. 

Demands for two-tired benefits and wages, attacks on defined benefit pension plans 

and other concessions have spread like wildfire since the economic recession of late 

2008 and 2009. 

In the past number of years, in Newfoundland and Labrador we have also seen 

an increased use and a greater willingness by larger corporations to use replacement 

workers during legal labour disputes. Just as unions are emboldened when new ground 

is broke at a collective bargaining table, employers are emboldened when the reverse 

occurs. 

Workers at other mines in Newfoundland and Labrador, indeed throughout the 

country, are worried that their employers will copy Vale’s actions and tactics and also try 

to seek concessions. The potential for future labour unrest is great if this were to occur. 



Ramificationsofdispute,coststotheprovinceand 

partiesinvolved 

 

The Federation of Labour does not have access to data which would provide a 

clearer picture or estimate on the loss in income to workers and families, or in mining 

taxes and personal income taxes to the provincial treasury. What is clear is that the 

provincial treasury has collected mining taxes on the production that has occurred 

during this strike. 

We can without question say that the strikers and their families have experienced 

incredible financial hardship. While some workers have had no choice but to seek work 

elsewhere, others did not or could not. 

A simple guesstimate: If the average salary for the 200 workers who have been 

on strike since August is $60,000 – that represents about $7.8 million in wages per year 

or $11.6 million in 18 months. 

We know that financial stress causes family stress and we should never 

underestimate the tremendous pressure families have been under during this dispute, 

including the children in those families. 

Our Federation also believes our northern communities will pay a steep price as 

well. In addition to the financial impact, the division and discord created when scab 

labour is employed and when neighbour is pitted against neighbour will be difficult to 

overcome. In that regard our Federation will become a willing participant in any 

discussions or dialogue if we are so asked to do so. 

 

 



Conclusion 

Workers in Canada haven’t had legal rights in the workplace for very long. It took 

us until the 1940s to win recognition rights and the right to negotiate with employers. It 

wasn’t until the 1960s that public sector workers achieved collective bargaining rights. 

None of these rights were given. It took perseverance, militancy and years of 

struggle. And no sooner had the labour movement won them than these rights were 

being challenged and even denied. 

Every generation of workers comes to the sobering realization that our rights 

exist only to the extent that they are struggled for, won and preserved. It is generally 

accepted that the right to organize, the right to representation and the right to bargain 

collectively are basic human rights. The right to form and join unions is a foundation of 

democracy. It is in the exercise of those rights that workers make progress. 

Workers’ rights get expressed or denied in a number of ways. There is Canada’s 

constitution, our governments’ obligations and commitments to international standards 

and there are labour codes and labour laws. 

Throughout our history, trade unions in Newfoundland and Labrador have fought 

for gains not just for themselves, but all citizens. It is because what we desire for 

ourselves we wish for all. Whether it is labour standards, minimum wages, workers’ 

compensation, stronger occupational, health and safety laws, it has been unions and 

the labour movement out front pushing for progressive change. Our efforts have made 

our province a better place to live and work and raise a family. 

For the most part, the people of our province have seen unions as the path to 

prosperity. It’s also part of our culture of supporting the collective, of caring and sharing. 

It is because we have a history of militancy, of fightback and resistance. However our 

unionization rate has not been growing. 

In 2005, 11 Nobel Peace Prize recipients, including Polish Labour Leader Lech 

Walesa and Reverend Desmond Tutu recognized the importance of workers’ rights, the 



right to join a union and the role unions play in creating a better society by taking out 

advertisements in major U.S. Newspapers: 

“Protecting the right to a form union…is vital to promoting broadly shared 

economic prosperity, social justice and strong democracies.” 14 

Labour laws and labour legislation should be about fairness, equity, balance and 

advancing the social and economic well being of its citizens. In Newfoundland and 

Labrador, there is much work to be done before our labour laws achieve those goals. 

The time has come to right the imbalance. This Inquiry has an incredible 

opportunity to make a difference in the lives of tens of thousands of working people in 

our province. 

We urge this Inquiry to be bold and consider how changes in our province’s 

labour legislation can ensure a more level playing field for the workers of Voisey’s Bay 

and for all those workers who still seek a union to represent them. 

Workers need access to an alternative dispute-setting mechanism in prolonged 

labour disputes. Rather than having to use the legislature to impose collective 

agreements in long disputes - although we sadly recognize that in this extraordinary 

circumstance may be necessary - the Federation advocates an alternative. 

There should be an ability for either side (rather than only by agreement by both 

parties) to send unresolved matters to binding arbitration after a period of time on strike 

and after both sides have bargained in good faith, but failed to reach a settlement. 

Binding arbitration in the private sector will unlikely result in substantial gains for 

working people, but it will at least help prevent long disputes and may “encourage” a 

multinational corporation the size of Vale to actually bargain with its employees, rather 

than “starve them out” on a picket line. 

As a labour movement we are extremely concerned about the growing use of 

scab/replacement labour by large multinational employers in our province. 

 

14 Accessed from: http://www.aflcio.org/joinaunion/voiceatwork/upload/d10_washpost.pdf 



 

The last three labour disputes where scab labour was used in our province 

involved large international firms. Other employers, certainly not all, see these actions 

(and government’s inaction in dealing with it) and they are emboldened. This makes for 

a very volatile labour relations climate, prolonged strikes and confrontational picket 

lines. It damages the collective bargaining process and poisons the workplace. Just as 

importantly it undermines workers’ right to good faith collective bargaining. Perhaps 

having an alternative dispute setting mechanism in place would also discourage big 

employers from taking such extreme strike-breaking tactics. 

We need labour laws that fit the times - that fit the economic realities faced by 

working people struggling to make gains or as is the case in recent times to hang on to 

what they have. 

The introduction of the formal regime of collective bargaining, the right to strike, 

minimum wages and occupational, health and safety laws were all accomplished 

because of the struggles of the labour movement in a move towards righting the 

imbalance between workers and their employers. Today that challenge is made greater 

because of the role multinationals play in our communities. Simply, globalization has 

fundamentally changed labour/industrial relations. 

If we are to build a more inclusive and equitable society, progressive labour 

legislation is an essential ingredient. If we are to share the wealth from our resources so 

citizens truly benefit, then unions need to be able to do what we do best – lift people out 

of poverty, enhance economic and social well-being and act as an agent of wealth 

sharing. Unions can’t do this, we can not push back against all that corporate power, 

without a strong and effective set of laws that ensure labour rights truly are human 

rights. 



Recommendations 

 

1. At the writing of these recommendations, talks between the two parties had 

broken off (January 6, 2011). In consideration of the extraordinary 

circumstances and length of this dispute and the unlikelihood of a negotiated 

settlement, the NL Federation of Labour recommends the mandate of this 

Industrial Inquiry be expanded to include the ability of the inquiry to arbitrate the 

dispute. In other words, convert the recommended terms of settlement outlined in 

Phase 1 of the Inquiry’s Report into an arbitrated settlement. 

2. Newfoundland and Labrador needs a law that bans the use of replacement 

workers during legal strikes. The fact that Vale was able to operate throughout 

this strike including production value of over $700 million from its Voisey’s Bay 

operation in 2010 is a shaming indictment of just how ineffective our labour laws 

are in correcting or affording a level playing field for working people at the 

bargaining table. 

3. Newfoundland and Labrador workers deserve to be able to exercise their right to 

a union, to freedom of association. Currently that right is curtailed by certification 

rules that make it more difficult to get a union than to vote for mayor or prime 

minister. These rules often result in labour-management relations getting off to a 

bad start. We recommend that the signing of a union card be counted as a vote 

and that members be certified into the union of their choice based on a clear 50% 

+1 majority through card evidence – such as is the case in Prince Edward Island 

and Quebec and in the federal sector. A compromise between what is currently 

in place in NL and these other jurisdictions is the New Brunswick model whereby 

a 40% card threshold results in a vote, between 50% +1 and 59%, it is up to the 

discretion of the Labour Board, 60% cards results in certification without a vote. 



4. And lastly, Newfoundland and Labrador workers, as exposed by the Vale strike, 

need the ability to get a collective agreement without having to walk a picket line 

for 17 months. The NL Federation of Labour recommends this Industrial Inquiry 

recommend a new provision for our Labour Relations Act, similar to the one in 

Manitoba that allows for long disputes to be settled through binding arbitration. 

We recommend that after considerable time (example: six months as a possible 

threshold), the parties be brought to the table with the assistance of a mediator. If 

this fails, one of the parties should be able to request sending the matter to 

binding arbitration. 



 

APPENDICES 

 



AppendixOne 

 



 



 

 

 



AppendixTwo 

 

 

 



 



 

 

 



 

 

 



AppendixThree 

 



 



 



 



 



 



 



 



 



 



AppendixFour 

 

 

 



AppendixFive 

 

Corporate Profits as Share Provincial GDP 

2008 

Change Since 

1999 

Newfoundland & 

Labrador 

36.69% 26.19% 

Saskatchewan 27.40% 14.63% 

Alberta 22.81% 8.94% 

Manitoba 13.33% 5.20% 

B.C. 11.73% 4.04% 

P.E.I. 10.19% -0.70% 

Ontario 10.14% -2.02% 

Nova Scotia 8.42% 0.48% 

Quebec 8.11% -2.84% 

New Brunswick 8.05% -1.24% 

Canada Average 13.56% 2.29% 

Source: Statistics Canada CANSIM Table 3840001. 

 

 

 



 

Wages and Salaries as Share Provincial GDP 

2008 

Change Since 

1999 

Ontario 55.98% 3.53% 

New Brunswick 54.65% 2.15% 

Quebec 54.10% 2.79% 

Nova Scotia 53.88% 0.04% 

P.E.I. 53.38% 2.35% 

B.C. 51.82% -1.14% 

Manitoba 49.83% -1.09% 

Alberta 43.90% -2.76% 

Saskatchewan 33.79% -7.88% 

 

 

 

 

 

 

 

 

 

 

 

Newfoundland & 

Labrador 

29.47% -18.60% 

 

 

Canada Average 51.18% 0.00% 

Source: Statistics Canada CANSIM Table 3840001. 

 

 

 

 

 



Division of GDP: Canada, 2008 

Labour 

51% 

Corporations 

14% 

Other 

35% 

 

Division of GDP: Nfld., 2008 

Corporations 

37% 

Other 

34% 

Labour 

29% 

 

 

 



AppendixSix 

 



AppendixSeven

January 7, 2011 - Government of Newfoundland and Labrador

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