Collective bargaining often remains a mystery to those amongst us who have never had the experience of sitting across the table. Throughout the recent NHL talks as a labour relations practitioner I have had many people talk to me about the bargaining, each more than willing to offer an opinion as to what both sides should be doing. It is interesting in Canada that the NHL collective bargaining is much dearer to people’s hearts than some of the other prominent labour relations issues going on around us.
That aside it is difficult for people to consider that collective bargaining is intended as a forum wherein two parties, management and labour, get together to discuss working terms and conditions. It has been deliberately set up so the threat of economic sanctions by one party against the other is a significant motivator for both sides to act responsibly to get the best deal possible. In fact, the system seems pretty efficient. Something in the order of 98% of collective agreements are renewed without any work disruptions. In the past year, 2011, according to Ministry of Labour Statistics in Ontario work stoppages are significantly down. Analysts believe this is a sign of responsible collective bargaining during economically difficult times.
The NHL lockout is an exception. Then again professional athletes and team owners tend to participate in these recessionary times in a different way then you and I do. Regardless, every once and a while the system dictates there will be industrial action. It’s part of the collective bargaining process.
The issues between the owners and the players are around how to divvy up a pretty substantial pie. Yes the poor fan has to sacrifice the loss of entertainment but overall the impact on the Canadian and U.S. economy is insignificant. It is a two party fight plain and simple.
What is interesting is that people simply have difficulty accepting that in collective bargaining there is always a possibility that one of the parties might stop work activities to hurt the other party and force concessions. That is the nature of hard bargaining. It is wonderfully Canadian that this dispute results in a much more emotional reaction than any others.
It is evident in the final stages of bargaining between the league and the players that the discussion will turn to how to make up for the losses both sides have endured. The league has lost close to 20% of their revenue for the year (presuming playing resumes in the next week or so) and expects the players will also lose a proportionate amount in salaries. It is a significant issue and likely will only be resolved once the parties admit that in a dispute both sides lose.
Making up the losses for the lockout likely will take many years. It is even possible that those losses may never be recovered, if for example the league loses its future market share of people’s entertainment dollars. So, is it worth it? The experience of the first lockout taught the league owners that it was somehow worth the price. They returned to significantly greater revenues and for some greater profitability. In this dispute they see fixing the cost structure as a means to strengthen the league further. Will they be proven right? We’ll see.