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The Swiss Chalet Workers: Part 6

A story that needs to be told & understood

Over the past several weeks we've brought you the story of the Swiss Chalet workers. A group of some 4000 restaurant workers, employed by a major Canadian franchised restaurant chain; one union or another has represented the Swiss Chalet workers for the last twenty years.

Initially organized in the late 1970's by CURRE, a union that appeared from out of nowhere, the workers fought a lengthy and courageous battle to join the UFCW in 1984. Only weeks away from the disposition of their applications for certification, their battle was abruptly terminated in a backroom settlement between the UFCW, CURRE and HERE (with which CURRE had merged at the outset of the UFCW's organizing campaign). The vast majority of the workers were returned to the CURRE-HERE hybrid as a result of the backroom deal in 1985. Withdrawing all of its applications as part of the deal, the UFCW came away with voluntary recognition for a dozen stores (out of the total of 29 for which it had applied). With an almost complete lock on the very profitable restaurant chain's operations between them, the two large service industry unions entered into unimpressive collective agreements, which featured, among other things, a two-tier wage scale. Subsequent rounds of bargaining resulted in few improvements and the introduction of another - a third - tier to the wage scale. In 1992, CURRE successfully raided the HERE-represented Ontario Swiss Chalets. In 1996, it merged with the UFCW. The current collective agreement between Local 206 and the Swiss Chalet employers is discussed in some detail in our previous article. It is, in some respects identical to CURRE's 1981 agreement and in some respects a worse deal. It now contains a three-tier wage scale. Workers on the lowest tier of the pay structure will progress beyond the provincial minimum wage after 2 years service.

Currently Swiss Chalet workers across Ontario belong to UFCW, Local 206. Local 206 is party to a province-wide collective agreement with Cara Operations (the company that franchises the Swiss Chalets) and its various franchisees at approximately 70 Swiss Chalet restaurants in Ontario. In an industry that prides itself on its ability to keep unions out, one would think that the presence of a major North American union within a major restaurant business would be of great interest to unions and their supporters. One might also think that a large North American union would use the considerable leverage such a presence provides to demonstrate to unorganized workers what unions can achieve for them. But the mainstream of labour pretends these workers don't exist and so, seemingly, does the UFCW.

Knowing what we know now about these workers and their labour history, it's not hard to understand why. The story of these workers is one of neglect, betrayal and expatiation - by the unions that fought over them, divvied them up like spoils of war, locked them into escape-proof collective agreements and left them mostly to the mercy of the standard industry practices of their employers.

An embarrassment to labour's mainstreamers and a testament to the self-serving priorities of the business unions and their bosses, the Swiss Chalet workers' story exposes a colossal missed opportunity for the mainstream labour unions that could, had they been so inclined, have used their presence in this national chain as a beachhead for further organizing in the restaurant industry. As it is, the pathetic collective agreements negotiated for these workers provide a disincentive to other service industry for joining unions. If the Swiss Chalet collective agreement is the best a union can do for you - even after 20 years - why bother?

The story of the Swiss Chalet workers story is important for union reformers and to those who are concerned about the community of workers to know for a number of reasons:

  • It exposes the self-serving face of business unionism and its shortcomings in ways that even its most devout defenders will have difficulty glossing over.
  • It debunks mainstream labour's conventional wisdom about why unions continue to fail in their efforts to organize workers in the service industry.
  • It shines a light on a critical period in the evolution of the Canadian UFCW, and on its devolution from a business union to a business.
  • It shows us that it is possible to organize on a large scale in the service industry and it sends us messages about what it will take for unions to do so successfully.

Business Unionism Up Close

It's easy to deplore Willie von Ferst, the mysterious man who originally organized the workers with a little help from some undercover security operatives. The thought of workers being led surreptiously to their employer's choice of union by people who they believed to be their co-workers, who they believed shared their interests and concerns, is galling to say the least.

It's tempting to deplore Bill Whyte, the ex-copper turned CURRE's General Manager who picked up where von Ferst left off. A man with no connection to labour or restaurant workers, he appeared on the scene shortly after starting a business with the company's Manager of Industrial Relations and a labour lawyer who represented the company, back in 1980. Whyte certainly seemed to have his own interests uppermost in his mind. He paid himself in excess of $100,000 a year while representing workers earning just over $3.00 per hour. He hired friends and relatives into union staff jobs and made his significant other, a former company official, administrator of the union's health and welfare plan. He relied on a voluntary recognition deal to build his membership. He negotiated a province-wide collective agreement with little, if any, input from his members. During his tenure, the union's executive board stopped holding elections and resorted instead to appointments by "presidential directive". When the going got tough, he merged CURRE with a larger mainstream-approved union and, when the dust settled several years later, he took CURRE - and the restaurant workers - back. A few years later, when it suited him, he lined up another merger - this time with the UFCW.

All that said, there is little to distinguish von Ferst's campaign from the business unions, selected in advance by the employers, who are given open access to the workplace so they can organize, it being agreed and understood that they won't get too greedy when it comes time to negotiate a collective agreement. It's difficult to distinguish the voluntary recognition deals from sweetheart deals. Easy access to new members is offered up in exchange for "cooperation" and "understanding of the needs of the business" on the part of the union.

It's difficult to distinguish Bill Whyte from the leaders of today's business unions. All of his activities are reflected in the practices of their leaders. They operate businesses with employers, hire their friends and relatives into well paying staff positions, appoint instead of elect, trade their bargaining leverage for voluntary recognition and sign dreadful agreements. CURRE was, in every respect, a business union, minus the mainstream's seal of approval. Whyte may as well have taken his cues from the leaders of those unions. They do the same things, they have the same commodified view of their members, and they get the same mediocre outcomes for their members. In CURRE we see business unionism without the veneer of mainstream respectability.

Debunking the conventional wisdom...

Ask any labour mainstreamer why unions can't break into the restaurant industry and you'll hear a litany of excuses. It's the government's fault: certification procedures make it difficult to organize workers at multiple locations. It's the employers' fault - they aggressively oppose organizing drives and take tough positions at the bargaining table when a union does manage to get certified. It's the workers themselves - they come and go, they don't stay around long enough to take an interest in what a union could offer. It's inter-union rivalry - unions are "raiding" each other and arguing about secondary issues like union democracy.

No doubt, there is an element of truth to some of these. Certification procedures don't make it easy to organize multiple locations and service industry employers are not known for union-friendliness. These are factors that make organizing challenging but not impossible. The Swiss Chalet worker's story shows us very clearly that, despite the challenges posed by the legislation and by the employers, it is possible because it did happen. What they did stands the conventional wisdom about organizing restaurant workers on its head.

It's the workers' fault...

From what we know, there is nothing about the Swiss Chalet workers that makes them dramatically different from other restaurant workers, either today or in the late 1970's. They were then and are now, a workforce comprised of youth, women, immigrants - a broad cross-section of the working poor. Staff turnover within the restaurant industry is high. There is nothing to suggest that turnover within the Swiss Chalet chain differs from that of other chains. From what we know, in the late 1970's it was as high as 80% annually. This notwithstanding, these workers were quick to join a union when the opportunity presented itself.

William von Ferst, a mysterious CURRE official, organized the entire Swiss Chalet chain over a period of less than 2 years from 1978 to 1980. Granted, von Ferst had an advantage in that he encountered no opposition from the employer and in some of the restaurants, was assisted by undercover operatives posing as workers. There is, however, no evidence that either he or the security operatives had to arm-twist these workers into joining CURRE. To the contrary, it appears that they jumped at the opportunity to join a union as soon as they became aware that they could. During proceedings before the Ontario Labour Relations Board in 1984, some of the undercover operatives testified that it did not take much effort to get the workers "talking union" and signing membership cards. The company itself conceded that due to widespread dissatisfaction with their working conditions, the workers were ripe for organizing. High staff turnover and casualized jobs did not seem to be much of a deterrent.

Four years later many of those same workers, dissatisfied with CURRE, jumped at the chance to join the UFCW. In the case of that organizing drive, they did so in the face of opposition from the employer as well CURRE and HERE (with which CURRE merged shortly after the UFCW's organizing campaign began). The workers toughed it out for almost two years and stood behind the union of their choice. They signed membership cards twice, demonstrating that it is possible for unions to get support and sustain that support over a long period of time.

It's the employers' fault

Employers play hardball at the bargaining table. They always have and they always will - in the service industry as in other industries. That said, the service industry chain operations rake in big profits and have numerous points of vulnerability. Widespread strike action during a peak business season can have an immediate and drastic impact on an employer's bottom line and so the threat of a strike can be a powerful source of leverage for a union. Regrettably, neither CURRE nor HERE nor the UFCW have ever attempted to use that leverage in any meaningful way. Despite a 90% strike mandate in 1998, the UFCW inked a deal with the Swiss Chalet employers that maintained a three tier wage structure, introduced a lower starting rate and granted increases of between 1% and 2% to workers earning more than the wages rates set out in the two lower tiers.

What also appears to be lost on the business unions is the fact that, when it's to their advantage, the employers give. Foodcorp Limited coughed up a respectable wage increase of 8% across in the board in 1981 - in the midst of an economic recession. It also coughed up a seniority bonus and a health and welfare plan. Yet in 1985, with two powerful North American unions representing its workers, the highly profitable company insisted on wage concessions - and got them. In 1986, Cara stock jumped an astounding 72.9%. Just months earlier, the UFCW and HERE agreed to a two-tier wage scale. Is it employer obstinacy or the union's unwillingness to use its leverage at the bargaining table that is the source of the problem?

It's the legislation

The legislation governing union certification in 1985 did not prevent the UFCW from organizing 29 restaurants over a period of six months. The legislation did not prevent the UFCW from becoming certified at those stores. It was the UFCW's own efforts, or those of certain of its officials, that stopped the organizing campaign in its tracks.

The 1985 certification legislation does not differ in any significant way from today's legislation with the exception that the Ontario Labour Relations Act now requires a representation vote on all applications for certification within 5 days of the filing an application with the OLRB. In 1984, the Act provided for automatic certification where a union was able to establish that it had the support of at least 55% percent of the workers for which it was applying. Although it does not provide the certainty of automatic certification, the requirement that a representation vote be held within 5 days is believed to be helpful to unions. Member support is highest in the early days following the filing of an application. A vote held during this period is more likely to go in favour of the union and the 5-day window does not provide employers with much in the way of an opportunity to mount an effective counter organizing campaign. If the UFCW's organizing campaign were held today, it is possible that votes on the applications filed during the open period would have been held quickly and the workers' wishes as to who would represent them would have been respected. The employer would have little opportunity to counter-organize and the union would have little time in which to shoot itself in the foot.

While automatic certification is desirable, in its absence the expedited representation votes minimize employer interference and permit votes to take place at a time when support is likely to be at its highest. In 1984, it was not the legislation that ended the UFCW's campaign. The union pulled the plug on itself. In 2001, it's not the legislation that is to blame for mainstream labour's lack of success in the service industry. It's the business unions and their mediocre track records that are to blame for that.

From Biz-Union to Biz-Partner

The mid 1980's were a critical time in the evolution of the UFCW. The dust was settling following the merger of the Amalgamated Meatcutters and Retail Clerks Unions that created the UFCW in 1979. The early to mid-1980's were a period during which the business unionist Retail Clerks consolidated their power in the new organization. In the US, the influence of the business unionists and their misguided strategies has been the source of considerable public discussion. A lot has been said and written about the ratcheting down of wages and working conditions in the meat packing industry and the betrayal of members by the union's leadership for the sake of keeping up relations with their employers. By comparison, very little has been said, written and understood about a very similar unfolding of events in Canada. What happened at Swiss Chalet is important in that it allows us to examine events that led to the consolidation of power within the Canadian UFCW by UFCW International President Bill Wynn's Canadian henchman, Cliff Evans.

Whatever Cliff Evan's role in the backroom settlement with HERE (and most likely the company) that brought the UFCW's enormous campaign to a halt, we know that Evans entered the picture just before the backroom deal was hatched and emerged with the UFCW's 13 restaurants planted in his (UFCW Region 19's) jurisdiction. His one credible rival for the eventual leadership of the Canadian UFCW, Region 18 Director Frank Benn (who initiated the campaign) retired just after the deal was done, unexpectedly and abruptly, clearing a path for Evans to the Canadian leadership. His crowning as leader of the Canadian UFCW a couple of years later ushered in a new era for the Canadian UFCW and a whole new concept in worker representation. Although a business union from the beginning, the UFCW now devolved into a business partner union.

An altogether different kind of organization, the business partner union assumes the character, goals and culture of a business enterprise. This un-union values its members only to the extent that they are necessary to generate revenue and seeks out new members for purposes of generating more revenue. Whereas the traditional business unions used their leverage at bargaining to win economic gains for their members (but did not pursue broader social or political issues), the business partner union does not use its leverage to the benefit of its members at all. Instead, it barters it away to acquire more revenue generating/due paying heads.

To achieve its goals the business partner union seeks out alliances with other businesses, offering employers the "competitive advantage" that is derived from low wages and severe restrictions on strike activity in exchange for voluntary recognition (the process that generates more dues paying heads). In the Canadian context, it was the Swiss Chalet workers campaign and its abrupt end that ushered in the era of the business partner union in the service industry. Voluntary recognition arrangements and sorry contracts were not a new phenomenon in the house of labour. These arrangements, however, had never been undertaken as systematically and on the scale that we would see on the part of the UFCW in the coming decade. Nor had these practices ever been legitimized and accepted by labour's mainstream to the extent that they would be. The fruits of this new brand of unionism would become evident and all too soon. We will discuss one particularly startling case - that of UFCW Local 777 - in a future article.

Apart from showing us the true face of business unionism, debunking the myths about organizing in the service sector and announcing the arrival of the business partner union, the Swiss Chalet workers' story also carries messages about what it will take for unions to organize and establish a powerful presence in the service industry generally and the restaurant industry specifically. The beachhead in the restaurant industry is still there. Despite 20 years of neglect, a large potentially militant group of union members exists within the Canadian restaurant industry. It's potential is no less than it was 20 years ago. All that is needed is for some union - maybe the right union - to light the spark. We're going to talk some more about that too. Stay tuned.

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