Monday, December 15, 2003

Ferry chaos far from over
By Paul Willcocks
VICTORIA - The ferry workers behaved like thugs, management substituted bravado for brains and this government - and its predecessors - set the stage for the whole mess.
And the damage done goes far beyond the current disruption.
You can’t entirely blame the ferry workers’ union for ignoring both the law and the contract they signed. It’s learned behaviour. For more than 30 years governments have taught the union that illegal strikes get results, and bring no consequences.
And that’s the lesson again. The union has won, gaining binding arbitration and a promise that the company won’t seek any damages after this strike.
Governments occasionally talked tough over the years. But their actions showed the union that law-breaking is an effective, risk-free tactic. When workers staged an illegal wildcat strike in 1997, the government promised to go after damages. Instead, the union and the corporation each ended up chipping in $30,000 for grievance resolution training, and the government forgot about the loss to taxpayers and ferry users.
So it’s hardly a shock that the union is prepared to break its contract and the law. The tactic has worked, and been accepted by government. (And the current government has given up some moral authority by breaking contracts it doesn’t like.)
Ferries management shouold have known the risk, and avoided blundering into this dispute.
The system was shut down Monday over a relatively small issue. Restaurants and gift shops were not going to be operating, so management wanted to schedule lower-paid deckhands instead of workers getting a premium for doing those jobs. They would still be fully trained union members, and my reading of the Labour Relations Board essential services order indicates management was within its rights.
But the union didn’t like it. The upside of essential services designation, from a union perspective, is that service can be disrupted without too much harm to members, who largely stay on the job. So the union refused to work.
The company’s anger at that is understandable. The union doesn’t own the ships, or decide who will staff them. But the smart move would have been to let the ships sail and head to the LRB for a remedy. The focus should be on protecting the business and reaching a settlement, not on symbolic victories and defeats. (Based on my direct experience in one strike, one lockout and too many difficult negotiations, that focus is hard to maintain.)
Instead, the service was shut down and Labour Minister Graham Bruce imposed the back-to-work order and cooling off period. The decision looks hasty today, but given the escalating stupidity at ferry terminals on Tuesday, it’s hard to fault Mr. Bruce.
The problem is far from resolved. The union’s track record suggests that it won’t hesitate to strike illegally if it doesn’t like arbitrator Vince Ready’s recommendations.
And the company still faces major financial pressures as a result of the Liberals’ move to create a semi-independent ferry authority.
Leaving aside one-time charges, the ferry corporation made about $24 million last year. But it faces immediate financial problems. The government has only guaranteed the $74-million subsidy from gas taxes for five years. And the ferry company has to borrow some $2 billion over the next 15 years, without government guarantees. Lenders will want to see a realistic projection of profits that allow the loans to be repaid.
Looking ahead five years, the company faces a potential operating loss of more than $100 million. Revenue gains, from both rate increases and more business, may help.
But the company will have to cut costs. And since wages, at $250 million, make up more than half the operating expenses, that’s where the savings will have to come. The current truce is merely a respite from the problems ahead.
It’s been a grim week, and not just for travellers and ferry-dependent businesses.
B.C.’s reputation for destructive labour relations has hurt the economy for years. This strike reinforces that reputation, at a very bad time.

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