ACTRA alleges ICA bargained in bad faith by demanding opt-out clause

A complaint claims the organization representing Canadian agencies is now engaged in an unlawful lock-out intended to break the actor's union.
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ACTRA, the union representing Canadian actors and performers, has filed a complaint against the Institute of Canadian Agencies (ICA), alleging that its insistence on an opt-out provision in the National Commercial Agreement (NCA) amounted to bad faith bargaining.

Filed with the Ontario Labour Relations Board on Tuesday, the complaint claims the ICA acted in bad faith by insisting ACTRA reduce the scope of its bargaining rights and demanding member agencies be allowed to determine when it would comply with the NCA.

“The strategy seemed more about breaking the union than it was about working with our professional performers to create high quality commercials for their advertising partners,” said Marie Kelly, ACTRA’s national executive director and lead negotiator, in a statement.

In addition, ACTRA says agreeing to the ICA’s demand would have created favourable terms for 16 ICA ad agencies, giving them a better position than non-ICA agencies when contracting ACTRA members.

“We could not agree to assist the ICA agencies in outbidding other ad agency partners, ad agencies that ACTRA has worked with for decades,” Kelly said.

ACTRA believes this shows the ICA never intended to successfully negotiate a renewal of the contract, constituting bad-faith bargaining, and is now engaged in an unlawful lock-out of ACTRA performers by not acknowledging the NCA.

Why the ICA pushed for an opt-out clause

Last month, ACTRA and the Association of Canadian Advertisers (ACA) announced they had reached a new tentative National Commercial Agreement for performers engaged for commercial work in Canada. Unlike previous NCAs, where the ACA and ICA had come together to form a Joint Broadcast Committee to bargain on behalf of the industry, the ICA was not included as a co-administrator of the new deal.

ACA and ACTRA said at the time that the ICA was “seeking terms that were not acceptable” and that neither could agree to, and that ICA had left the bargaining table as a result. The ICA said a mediator reported an impasse that could not be resolved by the April 26 deadline, with the NCA subsequently expiring and no longer in effect.

Following that announcement, a statement written by James G. Knight – managing partner of management side labour and employment firm Filion Wakely Thorup Angeletti, who represents the ICA – said the ICA was seeking an “opt-out provision” to achieve “a level playing field.”

In an email to strategy, ACTRA said the ICA demanded, as a condition of continued bargaining, that ICA agencies receive the right to unilaterally decide when it wanted to work with ACTRA talent under the NCA, which would have created inequities between the ICA and non-ICA agencies, as well as “a considerable loss of work” for ACTRA members.

ACTRA’s lawyer, Steven M. Barret of Goldbatt Partners, said in his own statement that in addition to eroding the opportunities available to ACTRA performers, the ICA pushing for an opt-out provision was illegal. A principle of labour law and the duty to bargain in good faith is that employers cannot impose as a condition of bargaining, or insist to the point of creating an impasse, that a union erode the scope of its bargaining rights, which Barret says the ICA did in its approach to the an opt-out provision.

Scott Knox, president and CEO of the ICA, says the playing field needed to be leveled because of Article 3005. Added to the NCA in 2007, the article allows non-signatories to engage ACTRA talent by using a third party payroll company to be a Canadian signatory acting on their behalf. At the time, this was done to allow foreign companies to produce commercial work in Canada with ACTRA performers.

The NCA includes a preference of engagement section, stating that signatories should make “every effort” to engage ACTRA members for commercial production. But Knox claims every “major” agency that has opened in Canada has also used the “relationship with non-signatory” section to get around preference of engagement and use ACTRA and non-ACTRA talent as they please, to the point that there have been no new signatories to the NCA since 2007.

He adds that the ICA pushed for an opt-out option instead of closing the loophole because ACTRA was legally unable to, as it would create a material business change that could invite legal action from the third party signatories. Knox says that this made the option to opt-out necessary, as signing to the NCA otherwise puts agencies at a disadvantage, with budget-conscious clients choosing to work with agencies that are not bound to the NCA.

“They know it’s a troubling issue but they don’t know how to address it,” Knox says. “And agencies can’t continue working under those conditions.”

However, Kelly said in an email to strategy that ACTRA had put “substantial effort” into a proposal to address the issue of Canadian agencies using third parties, which the ICA “did not even bother to reply to” and instead walked away from bargaining. Kelly adds that the ICA “had little incentive to solve the third party issue,” as agencies within its own membership had utilized Article 3005 and wished to maintain access to it.

“It is ACTRA’s view that the ICA was not actually interested in solving any problems but is determined to try and break the union,” Kelly said. “The ICA’s position lacked logic in bargaining and still doesn’t make sense to me.”

Knox, for his part, rejects the union busting characterization, describing himself as pro-union and coming from an organized labour background. He says the ICA wants to use ACTRA talent, but “its the client’s money,” and they can and have decided to work with agencies that have the option of not working under the NCA.

The Association of Canadian Advertisers remains an administrator to the NCA and counts many of the country’s biggest advertisers among its 86 members. They include Unilever, PepsiCo, Coca-Cola, Kruger, Clorox, McDonald’s, Danone, Campbell’s, Nestle, General Mills, Maple Leaf Foods, Loblaw Companies Limited, Metro, Jean Coutu, Walmart, L’Oreal, Molson Coors, Campari, OLG, Loto-Quebec, Desjardins, Toyota, the big three telcos, four of the Big Five banks, the Dairy Farmers of Canada and Ontario, and the governments of Canada, Ontario and Quebec.

The disputed status of the NCA

The ICA’s position, as outlined in Knight’s statement, is that the previous NCA has expired and its members are not bound to its terms, nor to any new agreement made between ACTRA and the ACA. This is because an extension of the previous NCA was not agreed to by the ICA in its role as a negotiator of that deal, and was not party to discussions about what it refers to as a “rollover” of the previous NCA.

Barret, however, pointed out that the ACA and ACTRA only negotiated after the ICA informed ACTRA that it would no longer be negotiating jointly with the ACA, as it had in the past, and would not continue bargaining unless its opt-out proposal was included. Discussions continued after the April 26 deadline passed, he says, only when the ICA gave notice that it would no longer be negotiating.

Knight also stated that the NCA was not a collective agreement, and was only governed by its own terms, which state it expires after the deadline set by a mediator. Barret countered by saying the NCA meets the definition of a collective agreement under the Labour Relations Act of Ontario. Regardless, nothing in either trite law or the NCA’s terms suggest that the ICA’s obligation to bargain in good faith expired after the deadline.

Barret also stated that any previous signatory to the NCA has recognized ACTRA as the bargaining agent for performers, with the rights to negotiate the collective terms and conditions of employment for any performers. Regardless of the ICA’s presence in discussions, Barret says, the NCA does exist and remains lawful.

“It is abundantly clear that ACTRA and the ACA have, indeed, entered into an agreement,” Barret’s statement said, adding that there isn’t “anything misleading or improper in ACTRA and ACA having entered into an agreement when it became apparent to them that the ICA was not prepared to be a party to a renewal agreement that did not contain its opt-in/opt-out proposal.”

While Knight’s statement said the ICA is under no obligation to use ACTRA members, it clarified that it was not unwilling to use ACTRA members “whenever appropriate.” Barret rejected the suggestion that agencies that do not agree to the terms of the NCA are free to decide which terms they employ ACTRA members on, or that ACTRA members will be available to agencies that do not agree to the terms of the NCA.

What happens now

ACTRA’s position is that the ICA is engaged in a lockout by not acknowledging its obligations under the NCA. As in the past, ACTRA members will only work for companies that are signatories to the NCA.

ACTRA performers voted to ratify the new NCA last week. The deal was also ratified by the ACA’s board earlier this month. It takes effect on June 1.

The main difference in the new NCA is a 2% increase in all fees and rates, as well as a shorter one-year term. ACTRA and the ACA said this approach would give performers a much-needed pay increase, while also giving the parties time to continue work on simplifying and modernizing the agreement under stable conditions. Knox told strategy the ICA would return to negotiations for the next NCA, should it be able to advocate for changes that “level the playing field.”

Independent and network creative agencies among the ICA’s membership include Anomaly, Bleublancrouge, Broken Heart Love Affair, Camp Jefferson, Church+State, Cossette, Diamond, Forsman & Bodenfors, Full Punch, The Hive, John St., Juniper Park\TBWA, Leo Burnett, McCann, Mass Minority, Mosaic, Ogilvy, Sid Lee, Taxi and Wunderman Thompson.