Last week Federal Labour Minister Jean-Pierre Blackburn refused to support a private member’s bill proposing a ban on replacement workers. The Bloc Quebecois eagerly pointed out that Mr. Blackburn had voted in favour of such legislation back in 1990.

Fortunately, the new Labour Minister sees things differently now. Banning replacement workers would effectively increase the bargaining power of federal unions which already enjoy labour laws titled in their favour. What Canada really needs is a complete reworking of federal labour relation laws which balances the needs of workers and employers and is aimed squarely at promoting labour market flexibility.

Labour market flexibility determines how well labour markets respond to changes in economic conditions. That is, flexibility allows workers and employers to reallocate their resources to maximize productivity. Labour laws that favour one group at the expense of another, or that are overly prescriptive, reduce the level of flexibility in the labour market.

Reduced flexibility can be devastating to an economy. A recent study in the prestigious Quarterly Journal of Economics concluded that increased regulation of the labour market is associated with lower participation and higher unemployment. A 2004 study in the Southern Economic Journal found that reduced labour market flexibility results in lower income and capital investment per worker.

In fact, a large and growing body of scholarly research has found that flexible labour markets out-perform regulated ones in terms of incomes, job creation, unemployment, and investment.

Unfortunately, a recent evaluation of private-sector labour relations laws found that Canada’s federal government maintains the most biased and restrictive labour relations laws among 61 North American jurisdictions (10 Canadian provinces, the Canadian federal government and 50 US states).

For example, the federal government maintains highly union-biased certification and decertification rules, which govern the process through which unions gain and lose the right to represent workers. The Canadian federal government is one of only five North American jurisdictions (along with Saskatchewan, Manitoba, Quebec, New Brunswick and Prince Edward Island) in which a secret ballot vote is not required for employees to become unionized. If a majority of workers sign union membership cards, the Canadian Industrial Relations Board (CIRB), which enforces federal labour relation laws, can automatically certify a union without an anonymous, secret ballot vote.

Once federally regulated firms become unionized, labour relation laws are heavily biased in favour of unions. For example, the federal government is only one of six North American jurisdictions (along with Saskatchewan, Manitoba, Quebec, New Brunswick, and British Columbia) that can require employers to notify the union when it plans to introduce new equipment or machinery that might affect the collective agreement or employment.

When labour disputes do arise, unions again hold the balance of power. While the use of temporary replacement workers is technically permitted, they can only be used for “legitimate” bargaining objectives. If the NDP and Bloc Quebecois had their way, the use of replacement workers would be banned altogether. This is particularly disconcerting given the results of two recent academic studies published in Labour Economics and Industrial and labour Relations Review. The studies found that employment and investment decrease in jurisdictions that ban the use of replacement workers.

Federal legislation also allows unions to picket second sites such as the operations of suppliers and retailers of a firm engaged in a dispute. This may force a company to give in to unreasonable union demands as pressure mounts from its suppliers and retailers.

Lastly, and perhaps the most damaging aspect of federal labour relations laws, are union security provisions that govern whether or not collective agreements can force workers to become union members and pay full dues. In all Canadian jurisdictions, mandatory union membership is permitted in collective agreements and can be included as a condition of employment. Further, all workers covered by a collective agreement are required to pay full union dues regardless of the nature of the spending.

This stands in stark contrast to union security provisions in the United States where employees cannot be required to join or maintain membership in a union in order to retain their jobs. In addition, federal laws in the US allow workers a choice when it comes to financially supporting union activities that are not directly linked with worker representation, such as political activities.

Federal Labour Minister Jean-Pierre Blackburn was wise to dismiss calls for a ban of replacement workers. Federal labour relations laws are already the most biased and prescriptive in North America. Indeed, a complete overhaul is in order. Doing so would dramatically improve the functioning of the national labour market and set an example for the provinces.