Opting Out of Union Dues

May 4, 2012

1-minute read

Murray Mandryk’s excellent column today saves me the trouble of writing a lengthy blog post on the Saskatchewan government’s recent musings about labour legislation.

From an economic perspective, it’s worth noting that enabling unionized workers to opt out of paying union dues would create a classic free-rider problem. Indeed, Wikipedia’s article on this topic uses collective bargaining as an example:

In the context of labor unions, a free rider is an employee who pays no union dues or agency shop fees, but nonetheless receives the same benefits of union representation as dues-payers. Under U.S. law, unions owe a duty of fair representation to all workers that they represent, regardless of whether they pay dues. Free riding has been a point of legal and political contention for decades. In Canadian labour law, the Rand formula (also referred to as automatic check-off) is a workplace situation in which the payment of trade union dues is mandatory . . .
From a political perspective, it’s worth substantiating Mandryk’s observation that this week’s musings directly contradict what Premier Wall said just six months ago during the provincial election campaign. As this screenshot shows, Wall tweeted the following clarification: “no opting out of union dues.”

However, his government’s consultation paper now includes the following question: “Are there any instances where union dues should not be collected in a situation where the employee has opted out?” (page 23).

The paper also contemplates strengthening the duty of fair representation (pages 18-19). Taken together, these proposals would require unions to devote more resources (contributed by dues-paying members) to representing people who choose not to pay dues. The apparent goal is not to “modernize” labour legislation, but to undercut the viability of unions.

Erin Weir is an economist with the United Steelworkers union and a CCPA research associate.

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