Ž been research on the employment effects of minimum wages Card and Krueger,
. Ž
. 1995 , dismissal laws Abraham and Houseman, 1994 and mandated benefits
Ž .
Mitchell, 1990; Gruber, 1994 for example, the impact of strike replacement legislation on employment has not been analyzed.
Previous research has investigated the effect of various Canadian strike replace- Ž
ment policies on strike incidence Gunderson et al., 1989; Budd, 1996; Cramton et .
Ž al., 1999 , strike duration Gunderson and Melino, 1990; Budd, 1996; Cramton et
. Ž
. al., 1999 and real wages Budd, 1996; Cramton et al., 1999 . In related work,
Ž .
Ž .
Ž .
Ž .
Gramm 1991 , Olson 1991 , Starkman 1993 , Gramm and Schnell 1994 and Ž
. Schnell and Gramm 1994 study various aspects of the actual use of strike
replacements. Nevertheless, to my knowledge, no study analyzes the impact of strike replacement policies on employment.
This study uses Canadian province-level aggregate data spanning 1966 to 1994 and disaggregated bargaining unit data spanning 1966 to 1993 to analyze the effect
on employment of three types of strike replacement legislation. The most restric- tive type of legislation is a ban on strike replacements, both permanent and
temporary. A second type of strike replacement law is one that grants striking workers the right to reinstatement at the conclusion of a strike with priority over
temporary strike replacements. This type of statute effectively bans permanent, but not temporary, strike replacements. A third variety of legislation is a ban on the
use of professional strikebreakers. As will be detailed below, there is considerable variation across time and across provinces between 1966 and 1994 in the presence
of these types of strike replacement laws in Canada. Aggregate provincial data and disaggregated bargaining unit data are used to test for an impact of these laws on
employment.
Various other studies have used a similar approach to analyze the effects of Ž
. public policies. For example, using state-level panel data sets, Levine et al. 1996
Ž .
study Medicaid abortion funding restrictions, Lee et al. 1994 analyze tort reforms Ž
. and Ellwood and Fine 1987 investigate right-to-work laws. Focusing on employ-
Ž .
Ž .
ment, Lazear 1990 and Ruhm 1998 analyze the effect of government-mandated severance pay and parental leave, respectively, using country-level data. Most
Ž .
Ž .
similar to the present research, Card 1992 and Neumark and Wascher 1992 , Ž
. using state-level data, and Schaafsma and Walsh 1983 , using provincial-level
data, analyze the impact of minimum wage policies on employment. The present research applies this methodology to the question of strike replacement legislation’s
effect on employment.
1. Strike replacement legislation
Ž .
In NLRB Õs. Mackay Radio and Telegraph, 304 U.S. 333, 346 1938 , the U.S. Supreme Court ruled that ‘‘nor was it an unfair labor practice to replace the
striking employees with others in an effort to carry on the business’’ thereby Ž
allowing U.S. employers the use of permanent strike replacements Atleson, 1983; Sales, 1984; Weiler, 1984; Olson, 1991; Spector, 1992; LeRoy, 1993; Estreicher,
. Ž
1994 . This doctrine remains valid in 1999, albeit with some restrictions e.g., .
unfair labor practice strikes , since federal, state and local attempts to modify this doctrine have been unsuccessful.
1
Thus, there is inadequate scope for empirically testing the impact of strike replacement legislation in the United States because of
the lack of variation in strike replacement policies. In contrast, the provincial governments, not the federal government, have
primary authority to regulate labor relations and collective bargaining in Canada. Consequently, while the foundations of labor relations are similar across provinces
Ž .
Ž .
e.g., exclusive representation , there are many policy differences Adams, 1994 . Central to the present research is that a variety of provincial laws currently
Ž regulate the use of strike replacements during legal strikes Spector, 1992; Adams,
. Ž
1994 . Fig. 1 provides an overview of these provincial statutes as of December .
2
1994 . The most restrictive strike replacement legislation is found in British Columbia
Ž .
Ž Labour Relations Code, Section 68; effective January 1993 , Ontario
The Labour Relations Act, Section 73; effective January 1993 and repealed November
. Ž
. 1995 and Quebec Labour Code, Section 109.1; effective February 1978 . These
statutes forbid employers from hiring someone to do bargaining unit work while the bargaining unit is engaged in a legal strike and restrict the use of existing
Ž employees. Manitoba The Labour Relations Act, Section 11; effective January
. Ž
Ž . .
1985 and Prince Edward Island Labour Act, Section 9 5 ; effective May 1987 both ban the use of permanent strike replacements. These two laws are weaker
than the British Columbia, Ontario and Quebec laws in that the use of temporary replacements or existing employees is not restricted.
A third type of strike replacement law is the granting of reinstatement rights to striking employees. Between 1970 and 1993, Ontario gave striking employees the
Ž right to return to their jobs within 6 months of the start of a strike The Labour
1
Between 1985 and 1995, the U.S. Congress considered, but did not pass, at least four proposals to limit the use of permanent strike replacements. State legislation restricting the use of replacements has
been ruled unconstitutional. An obscure 1936 federal statute, the Byrnes Act, restricts the interstate Ž
. transportation of strikebreakers. Various states also have anti-strikebreaking statutes Sales, 1984 , but
they have often been ruled unconstitutional.
2
In the Canadian federal sector effective January 1, 1999, the revised Canada Labour Code provides reinstatement rights to striking workers and bans the use of replacements ‘‘for the demonstrated
purpose of undermining a trade union’s representational capacity rather than the pursuit of legitimate bargaining objectives.’’ Prior to this legislative change, permanent strike replacements were restricted
Ž in the federal sector by board and judicial precedent e.g., see Eastern ProÕincial Airways Õs. Canada
Ž Ž
. Labour Relations Board 84 C.L.L.C. 14,402 at 12,179 Fed. Ct. App. 1984 ruling that the use of
. permanent strike replacements is an unfair labor practice because it discriminates against strikers .
Ž .
Fig. 1. Provincial strike replacement legislation in Canada December 1994 . Note: Shading denotes no legislation. Dates indicate effective year of legislation.
Ž .
Ž . .
Ž Relations Act 1990 , Section 75 1 ; effective November 1970 . Quebec Labour
. Ž
Code, Section 110.1; effective February 1978 , Manitoba The Labour Relations Ž .
. Ž
Act, Section 12 1 ; effective January 1985 , Prince Edward Island Labour Act, Ž .
. Ž
Section 9 3 ; effective May 1987 , Alberta Labour Relations Code, Section
Ž . .
Ž 88 1 ; effective November 1988
and Saskatchewan The Trade Union Act,
. Section 46; effective October 1994 all provide reinstatement rights for strikers as
well. These reinstatement policies effectively ban permanent strike replacements since employees are granted the right to return to their jobs with priority over
replacement employees. The Saskatchewan policy is illustrative: if a strike or lock-out ends with no agreement on the reinstatement of striking employees, ‘‘an
employer shall reinstate each striking or locked-out employee to the position that the employee held when the strike or lock-out began,’’ subject to sufficient work
Ž Ž ..
being available The Trade Union Act, Section 46 2 . Moreover, ‘‘striking or locked-out employees are entitled to displace any persons who were hired to
perform the work of striking or locked-out employees during the strike or Ž
Ž .. lock-out’’ Section 46 4 .
Three provinces have also restricted the use of professional strikebreakers: Ž
Ž .Ž . British Columbia Labour Relations Code, Section 3. 3 d ; effective November
. Ž
Ž . 1973 , Manitoba The Labour Relations Act, Section 14 2 ; effective January
. Ž
Ž .
Ž . 1985 and Ontario The Labour Relations Act 1990 , Section 73 1 ; effective June
. 1983 . In Manitoba and Ontario, a professional strikebreaker is defined to be ‘‘a
w person who is not involved in a dispute whose primary object in the board’s
x opinion , is to interfere with, obstruct, prevent, restrain or disrupt a legal strike.’’
British Columbia’s definition is similar. Fig. 1 summarizes the incidence of the four types of strike replacement laws in
Ž .
Canada as of December 1994 and underscores the variation in these laws across both provinces and time. If this variation is exogenous, it provides a ‘‘natural
experiment’’ for testing the effects of these labor policies. At the same time, however, it is apparent that all of the provinces that banned permanent strike
replacements also enacted reinstatement rights provisions. Given this overlap and the conceptual similarity between permanent strike replacement bans and reinstate-
ment rights, the empirical analysis will not include a separate variable for permanent strike replacement legislation.
2. Strike replacement legislation: the employment debate
