House of Union Cards

Thirty years ago, Dick Bennett was a finance whiz hired by Canadian Pacific to help create Highland Transport, a trucking division made up of independent drivers. Like a lot of over-the-road carriers at the time, CP’s trucking arm wanted little more to do with company drivers — CP was a union shop, and management wanted to add capacity without the higher wages and working conditions demanded by its collective bargaining agreement.

The solution was to start selling trucks to company drivers. “The vehicle didn’t change colour, didn’t change licence, didn’t change insurance,” says Bennett, who parlayed his experience into probably the country’s foremost business consulting and accounting firm for owner-operators and small fleets, Transport Financial Services, in Waterloo, Ont. “Even the guy behind the wheel didn’t change, except in one fundamental way: he no longer was an employee, he was a self-employed individual. And being self-employed, he didn’t have to join the union.”

The process was being taken up at fleets across Canada. And that’s how the owner-operator came to be in this country.

It’s easy to forget today. If I’m a fleet owner, I look at the owner-operator and see flexible capacity. I could crank up an operation with 100 trucks in a couple of weeks if I really wanted to put my mind to it. I see easily capitalized hardware. I see a more professional driver and a better-maintained truck. I see a walking, talking sales prospect for insurance, tires, financing, and licensing. These all are benefits to my trucking company, but secondary, really, to keeping labour organizers at bay.

The strategy has worked, generally. The most recent hiccup was on Jan. 23, when the Canada Industrial Relations Board certified a Teamsters local to bargain for about 200 owner-operators, agency drivers, and drivers employed by owner-operators at Mackie Moving Systems in Oshawa, Ont. (the story kicks off our Dispatches section on page 14). Most of the drivers haul extra-provincially for Mackie’s general freight division. The bulk of the business comes from General Motors.

The real victory for the Teamsters involves the agency drivers, who will have to work and be paid in accordance with whatever collective bargaining arrangement the Teamsters and Mackie management can negotiate. Even though they are technically employed by someone else, these drivers have been deemed Mackie “employees” because Mackie governs when they work, where they work, their code of conduct, the equipment they use, and how much they’re paid.

Mackie’s owner-operators, on the other hand, are considered “dependent contractors” — their livelihoods are inextricably tied to one company, to paraphrase the Canada Labour Code. They own the tractor, but the plates, insurance, and registration are in Mackie’s name. It’s Mackie’s name on the door, on the bills of lading, on the trip sheets. They all have a mailbox in the Mackie office where they receive the company newsletter. They all sign the same standard contract, and they don’t compete with each other for loads by attempting to negotiate lower rates. Once an owner-operator has signed a contract and successfully bid on a specific run, if he turns down a load, his contract is void.

Sound familiar? This scenario is carried out at trucking companies across Canada.

I don’t think this ruling will have owner-operators wasting ink on union cards any time soon. The unions don’t offer enough. However, it should prompt trucking companies to question just how independent their owner-operators really are, and perhaps to take steps to redefine their business relationship.

It means more autonomy, more self-reliance. I heard about a carrier in the United States where the owner-operators decided they didn’t want to be part of the union there. They became incorporated, got their own operating authorities, their own fuel-tax stickers, etc., and represented themselves as a fully independent body hauling the same freight they always had. The biggest change was that they accepted more of the burden in terms of licensing, insurance, and compliance, and accepted the risks involved in true independence. And it relieved the fleet of the administrative hassles associated with supporting an owner-operator (which was reflected in a higher rate of pay).

On the upside, a guy can run peaches for XYZ Carrier for six weeks, and then at the end of peach season take his reefer and his truck and his authority and his insurance and go haul cabbages. It’s a much more mature business relationship, one that transcends busting unions. It’s actually mutually beneficial.

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