Labour Day just passed, and labour action has been making headlines. From Air Canada’s flight attendants to the BC Government and Service Employees’ Union, recent strikes have got us thinking about the role boards play (or should play) in labour relations. Too often it seems, the topic only makes its way to the board once a strike is imminent and elevated to the status of “a material risk”. By then, the discussion is about damage control and financial risk – not people.

The Air Canada strike is a good reminder that boards of companies who rely heavily on unionized employees, should proactively consider labour relations as part of their engagement on the broader business strategy. Is labour relations strategy too operational such that it should be left to management? I don’t think so. People are foundational to organizational success. This is particularly true in industries like air travel where unions represent a large and diverse employee base. Decisions that airlines choose regarding how they manage their various employee groups are key to their business success formula.

Here are some of the factors boards may wish to consider to assess the company’s employee/labour relations strategy:

• Purpose and Values: How do the company’s purpose, values and desired organizational culture play into employee/labour relations? What principles should be considered?
• Strategy: How is the approach to employee/labour relations aligned with the company’s broader business strategy and financial model? Is this considered as part of the board’s discussions on strategy?
• Risk: With advances in technology that may impact roles/responsibilities, greater interest from employees in the company’s stance on purpose and social issues, and broadened workplace health and safety considerations, the risks associated with labour relations can be expected to increase. Is this risk receiving adequate time and attention through the appropriate committees?

In 2023, 6.6 million person-days were lost due to labour disputes – the highest level since 1986 [Source]. Strikes are no longer rare flare-ups; they’re part of the landscape. For any company reliant on a large employee group and material exposure to job action, the board should get ahead of the curve. Proactively discussing management’s overall human resources strategy (including labour relations) isn’t “too operational” – it’s core to shaping long-term success.

How do you engage with labour relations on your board?