Collective Bargaining Rights and Rural Letter Carrier Compensation

UNION NETWORK INTERNATIONAL

Continental Divide: Collective Bargaining Rights and Rural Letter Carrier Compensation in the United States and Canada

A report prepared by Union Network International for the NAALC Workshop on the Right to Organize and Bargain Collectively in Canada and the United States Toronto, Ontario, Canada February 1-2, 2001

Union Network International (www.union-network.org) is a Global Union which represents more than 15.5 million workers worldwide who are organized by more than 900 affiliated unions in some 120 countries. UNI represents workers in a broad range of service and communication oriented industries, including postal, graphical telecommunications, media, and banking and commerce workers.

Contact info: Head Office: Union Network International, Avenue Reverdil 8-10, Box CH- 1260 NYON 2, SWITZERLAND. Philip Jennings, General Secretary, Tel: 41 22 365 2100 Fax: 41 22 365 2121 Regional Office: UNI-Americas, Torre Frontenac, Piso 5 oficina 6b)-6c), Panama City, PANAMA, rodolfo Benitez and Raul Requena, Joint Regional secretaries, Tel: 507 269 7164 Fax: 507 269 7294

For information on this report, contact [email protected] COLLECTIVE BARGAINING RIGHTS AND RURAL LETTER CARRIER COMPENSATION

IN THE UNITED STATES AND CANADA

Introduction

In 1998, postal worker unions affiliated to Union Network International (then known as Communications International) in Canada, Mexico and the United States filed a petition under the North American Agreement on Labor Cooperation (NMLC) concerning the mistreatment of Rural Route Mail Couriers employed by the government-owned Canada Post Corporation (CPC). Under the statute that created CPC such workers are specifically exempted from coverage under the Canada Labour Code and therefore denied collective bargaining rights. That petition helped lead to the holding of this workshop on the issue of collective bargaining rights in Canada and the United States. UNI prepared this briefing paper for the workshop to highlight the negative consequences of the law concerning rural letter carriers in Canada.

This brief compares the compensation of rural letter carriers in Canada and the United States, where such carriers have the right to organize and bargain collectively, and demonstrates the adverse impact on Rural Route Mail Couriers in Canada that results from the denial of their rights. It also demonstrates that the Canadian government (through Canada Post can certainly afford to grant rural workers the same rights it affords all other Canadian postal employees and virtually every other Canadian worker as well.

Rural Carrier Pay and Benefits in Canada and the United States

As employers, the Canada Post Corporation (CPC) and the United States Postal Service (USPS) share many similarities. Both are state-owned enterprises that operate under limited monopolies that permit universal postal services at uniform, affordable rates. Both are national in scope and serve huge geographical countries. Both rank among the largest employers in their countries, with heavily unionized work forces. Among the most striking differences between CPC and USPS as employers, however, is their varying treatment of letter carriers who serve rural areas of the two countries.

Collective bargaining rights for rural letter carriers Rural letter carriers employed by the USPS are represented by a union, the National Rural Letter Carriers Association (www.nrica.orq), and are covered by a collective bargaining agreement. All U.S. postal employees are free to organize unions and enjoy collective bargaining rights, as provided by the National Labor Relations Act or NLRA, the same law that applies to most private sector workers in the United States. Coverage by the NLRA, with certain modifications, was included in the Postal Reorganization Act of 1970, the law that created the USPS in its current form1.

Rural letter carriers in Canada (Rural Route Mail Couriers or RRMCs), on the other hand, are considered independent contractors-and do not have the right enjoyed by other Canadian postal workers to belong to a union that represents them in collective bargaining. Section 13(5) of the Canada Post Act specifically excludes RRMCs from coverage under the Canada Labour Code, even though the Canadian Labour Relations Board has ruled that RRMCs are "employees" as defined under the Code2. As "independent contractors," RRMCs do not negotiate their wages and benefits, but must periodically bid to secure or retain their jobs.

In short, rural letter carriers in the U.S. are afforded the basic human right to form a union and negotiate as a group to improve their compensation and working conditions. Those in Canada are denied that right and must compete with other workers who might be willing to do the work for less. The unsurprising result of this difference is that rural letter carriers in the U.S. enjoy a decent standard of living while those in Canada struggle to make ends meet. A comparison of their pay and benefits demonstrates this disparity.

The effects of discrimination

Comparing wages rates across international borders is necessarily complicated by labor market differences, exchange rate fluctuations and other factors. For example, over the past decade, the average wage of Canadian manufacturing workers has varied from a high of 107 percent of the average wage of similar U.S. workers in 1990 to a low of 81 percent in 19993. But there is little doubt that most of the

1 The key modification to NLRA coverage involved dispute settlement procedures. Under the Postal Reorganization Act, postal employees in the United States are denied the right to strike. An alternative dispute resolution system involving mediation and binding interest arbitration is provided for instead. Thus, Canadian postal workers, with the notable exception of Rural Route Mail Couriers, typically enjoy broader trade union rights than their American counterparts. 2 Canada Post Corporation vs. various unions, C.L.R.B. decision dated April 29, 1987, 69 di 173. 3 Bureau of Labor Statistics, International Comparisons of Hourly Compensation Costs for Production Workers in Manufacturing, 1999. Internet address: http://stats.bls.gov/flshome.tltul. wide difference in the compensation paid to rural letter carriers in the two countries stems from the lack of collective bargaining rights for such workers in Canada.

The table on the next page compares the compensation of full-time rural letter carriers in the U.S. to that of Rural Route Mail Couriers in Canada.

It indicates that in virtually every category the compensation of rural letter carriers in the U.S. is significantly greater than it is in Canada.

Rural carrier wages in the U.S. are approximately 3-4 times the U.S. minimum wage while RRMC wages can fall below the minimum wage in Canada, depending on each courier's expenses and the terms of his or her individual contract. The collective bargaining agreement between the USPS and the NRLCA provides an allowance for vehicle expenses, while RRMCs must pay their own expenses. The USPS-NRLCA contract also includes provisions for a long list of benefits and social protections that are standard in union contracts on both sides of the border and which many non-union companies in North America routinely provide. RRMCs have no vacation or sick leave benefits, no paid holidays, no life insurance or workers compensation coverage.

Certainly a part of the difference in compensation levels stems from the difference in general wage rates that exists between the two countries. And certainly one might expect the much larger USPS to be able to pay higher wages than Canada Post - USPS annual revenues are nearly 10 times those of Canada Post. But the most important reason American rural letter carriers earn middle-class wages while Canadian ones do not is that the former have collective bargaining rights while the latter do not.

It should be noted that not all rural letter carriers in the U.S. have fulltime positions. There are 57,000 full-time rural letter carriers employed by the USPS, but another 47,000 workers serve as part-time rural carriers who work for lower pay and lesser benefits. However, most of these part-timers simply fill in for regular rural carriers on their day off (the work week is usually five days, but there is delivery six days a week in the U.S.) or serve as substitutes for regular carriers who are sick or away on leave. In any case, the compensation and working conditions of these part-time rural carriers are subject to collective bargaining between the USPS and the NRLCA. Not only are RRMCs prohibited from negotiating their terms of employment, they must compete against each other to keep their jobs. Rural Letter Carrier Compensation in U.S. and Canada

The following table outlines the difference in pay and benefits payable to fulltime rural letter carriers in the United States, who enjoy collective bargaining rights, and Rural Route Mail Couriers in Canada, who are denied the right to union representation.

U.S. Rural Carriers Canadian RRMCs (NRLCA-USPS Labor Contract) (Independent Contractor )

Recognized Labor Union? Yes - National Rural Letter No- Excluded from protection Carriers Association under Canadian Labour Code

Average straight- time wages: $C 27.50 per hour or roughly 3.5 Approximately minimum wage times the minimum wage after paying for car expenses, gas, Approximately 90% of USPS city insurance, etc. One-third to letter carrier pay one-half the pay of CPC urban letter carriers

Overtime pay? Yes- 150% of straight-time pay No over 40 hours per week

Equipment (vehicle) If carrier uses own car: USPS None maintenance allowance: pays $C 0.60 per mile or $C23.90 per day, whichever is greater, or USPS provides a vehicle to rural carriers

Paid sick leave: 13 days per year None

Paid annual leave: 13 - 26 days per year None

Paid holidays: 10 Federal holidays per year None

Employer-paid life insurance? Yes. Free term life insurance No policy worth annual salary plus $C 3,000

Supplemental Yes. USPS pays 11 percent of No employer-provided pension and salary to provide pension and up disability insurance? to 5% in automatic and matching contributions to a retirement savings program. Payable in addition to Social Security

Health insurance? Yes. Federal Employees Health Yes. National Medicare Plan Benefit Plan Can Canada Post Afford Justice for Rural Letter Carriers in Canada?

Union Network International and its affiliated postal unions in North America4 believe the rights to organize and to bargain collectively are fundamental human rights. So claims by the Canadian government, as expressed by Canada Post, that it cannot afford to treat RRMCs the same way it treats other postal workers should have no validity as a matter of principle. However, as a practical matter, Canada Post can surely afford to grant collective bargaining rights to Rural Route Mail Couriers.

Canada Post is among the most efficient post offices in the world and its postage rates are among the least expensive in the industrialized world (see the chart on the next page). Moreover, its strength as a commercial enterprise equals and arguably exceeds that of the U.S. Postal Service. In the 1990s it recorded profits in seven out of ten years and strengthened its competitive position in courier services and electronic commerce. By contrast, the USPS recorded profits in just five of ten years in the past decade and enjoys much less commercial freedom to expand into the fastest growing portions of the postal market5. If the USPS can afford to negotiate the wages, benefits, terms and conditions of its rural letter carrier workforce, Canada Post can afford to do the same.

Stamp Prices in Selected Countries

Basic Letter Postage in Postage in Country Domestic Currency U.S. cents*

New Zealand 0.40 NZ$ $0.18 Australia 0.45 A$ $0.25 Canada 0.47 C$ $0.32 United States 0.34 US$ $0.34 Britain 0.26 Pound $0.38 Italy 800.00 Lira $0.39 France 3.00 F Franc $0.43 4 UNl's postal union affiliates in North America include: the Canadian Union of Postal Workers in Canada; and the American Postal Workers Union, the National Association of Letter Carriers and the National Postal Mail Handlers Union in the United States. 5 The USPS does not enjoy the right to make acquisitions such as CPC's purchase of Purolator; nor can it negotiate service agreements with large corporate clients or engage in joint ventures of the sort CPC has undertaken to build its ePost business. Netherlands 1.04 Guilder $0.44 Norway 4.00 Krone $0.45 Austria7.00 Schilling $0.47 Sweden 5.00 Krona $0.52 Germany 1.10 D Mark $0.52 Switzerland 0.90 S Franc $0.55 Finland 3.50 FIM $0.55 Japan 80.00 Yen $0.68

* Note: Foreign exchange rates on January 24, 2001.

Conclusion

The three countries that are parties to the North American Agreement on Labor Cooperation (NMLC) committed themselves to promote nine core labour principles. The first two of these are: 1 ) Freedom of association and protection of the right to organize; and 2) The right to bargain collectively. As members of the International Labour Organization, Canada, Mexico and the United States are obligated to adhere to these principles as well.

Canada may have a superior record of meeting its NMLC and ILO obligations when compared to its NAFTA partners. But in the case of Canada Post and its rural letter carriers, it has clearly failed. The negative impact on the 6,000 men and women who serve Canada Post and the citizens of Canada is all too clear. Union Network International therefore calls on the government of Canada to correct this injustice by repelling Section 13(5) of the Canada Post Act and urges the Canada Post Corporation to treat its RRMC work force fairly by entering into collective bargaining negotiations as soon as possible.