The Rand Formula

The Template for Canadian Labour Relations Since The Second World War1818137

During 1945, a bitter struggle for Union recognition was fought by the United Auto Workers against Ford in Canada at a main production facility in Windsor, Ontario. The Union demands included recognition, dues check offs and mandatory membership for Bargaining Unit employees. At the time, the Unions spent a lot of time and effort collecting the dues from each member individually. The strike dragged on for many months without resolution. 1818133

In response to a police threat to force open the picket line around the plant power plant, Local 200 introduced a novel tactic. Those members who had cars, parked, blocking the streets around the power plant. Private cars entered the area and became trapped in the traffic jam. Unionized city buses joined in the “park-in siege” which grew to entangle 20 blocks around the plant. 1818132

1818134The police declined to intervene and when negotiations were restarted on November 23rd, the siege was lifted and the power plant reopened, with the agreement of the Local, to prevent cold weather damage. On December 16, after 99 days of the picket line, a Provincial and Federal government proposal to end the strike, with binding arbitration, was accepted by the Union. Justice Ivan Rand was appointed as arbitrator. Ford_strike_1945Ford_strike_1945(2)

Justice Rand’s decision struck a balance, ordering compulsory dues check off but not compulsory Union membership. In return for secure funding, the Union was required to “be responsible”, not to support wild cat work stoppages during the life of the contract and to conduct strike votes by secret ballot. You can read Justice Rand’s judgement here. Ivan_rand

The Rand Formula has become the basis for labour relation in Canada since the Second World War. The provisions are part of the labour code in many provinces and are practiced throughout the country. Image_Essex28

There have been two challenges to the Rand Formula since the Charter of Rights and Freedoms was proclaimed in 1982. The first focused on the political initiatives of Unions which may not reflect the politics of some members. The Supreme Court unanimously rejected this appeal, recognizing Unions have the right to have a political program to pursue the broad interests of its members, such as reforming the Labour Code. 

A second challenge came in Quebec where construction work was restricted to those with trade certifications only available through the Unions. Even though this legislation went a step further than the Rand Formula by mandating membership as well as dues check off, the Supreme Court, by a 5-4 margin, ruled the provincial regulations did not violate the charter. The decision of the Supreme Court of Canada in 2007, regarding BC Health Services, has further strengthened Union Rights by making the right to bargain collectively a Charter Right. You can read more about the challenges to the Rand Formula here. 


Unlike in the United States, as long as the Rand Formula remains, Right ToWork (For Less) legislation is unlikely to stand a Charter Challenge in Canada, protecting us from the vexatious “free-loaders” who enjoy the fruits of Union efforts without having to pay their share. But with our deeply integrated economies, the downward pressure Right to Work (For Less) laws in some US states exert on wages has lead corporations to relocate. A most infamous and recent case is the former GM, now Caterpillar, Electro-Motive locomotive plant in London, Ontario which relocated to Indiana on the day Right to Work for Less legislation took effect. Particularity galling is the fact the plant in London was both profitable and produces products of the highest quality, exporting to Europe as well as supplying the premier motive power for North American railways.



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