Manufacturing conditions “ripe for conflict,” Conference Board says

Continued economic uncertainty will lessen prospects for labour unrest in 2011, except in the manufacturing sector, which has conditions that are "ripe for conflict," according to The Conference Board of Canada’s Industrial Relations Outlook 2011: From Conflict to Cooperation?

"Given the current economic conditions, labour and management have demonstrated a willingness to reach settlements without resulting in work stoppages. Public sector unions appear to have accepted that there is little or no public support for aggressive stances at the bargaining table and are being very cautious," said Karla Thorpe, associate director, Compensation and Industrial Relations. "On the other hand, conditions in the manufacturing sector are ripe for conflict."

Collective bargaining in the manufacturing sector is expected to be difficult, whether or not the organization is profitable. Employers are struggling to limit labour costs in the face of increasing international competition, relatively weak demand, and a high Canadian dollar that affects exports particularly hard. Nevertheless, given the improved economic environment compared to a year ago and pending labour shortages, private sector unions will be looking to make real wage gains.

Negotiated increases for unionized employees in the private sector are expected to average 2.1 percent, higher than those in the public sector at 1.4 percent in 2011.

Labour disputes in the public sector have declined since their recent peak in 2009. Faced with deficit spending during the recession and increased public debt, the federal and provincial governments continue to focus on limiting wage increases and, in many instances, reducing employment. Public sector unions will focus on maintaining existing wages and benefits while preserving as many jobs as possible.

The Industrial Relations Outlook is based on The Conference Board of Canada’s economic and compensation research and a roundtable discussion with senior labour and management leaders held in September of this year.

For more information, visit www.conferenceboard.ca.