Union Dues and the Rand Formula

What is the Rand Formula?

The Rand Formula is named after a decision handed down on January 29, 1946, by Mr. Justice Ivan Rand of the Supreme Court of Canada while he was arbitrating the Windsor Strike (September 12 to December 20, 1945). It provides a form of union security whereby an employer deducts a portion of the salaries of all employees within a bargaining unit, union members or not, to go to the union as union dues (“checkoff”). (All workers in a given workplace were required to pay dues on the basis that all workers benefit from the working conditions negotiated by the union for that workplace.)  The original formula was based on the assumption that the union is essential for all workers and must be responsible for them. Two interrelated provisions following from this assumption guaranteed the union the financial means to carry out its programs, and established the financial penalties for employees and unions engaging in work stoppages or illegal strikes.

Collective agreements have incorporated a modified Rand Formula throughout Canada, and some provinces have given it legal force.

What is the Windsor Strike, which gave rise to the Rand Formula?

The Windsor Strike took place at the Ford Motor Co. plant in Windsor, Ontario. The walkout of some 17,000 workers was the first and most significant of the many strikes occurring immediately after WWII as Canada’s unions attempted to capitalize on their great wartime advances. Most companies were determined to limit organized labour’s gains.

There was really only one strike issue at Ford: union recognition. The United Automobile Workers demanded it; the company refused to grant it. “Union shop and checkoff” had been the union’s slogan for some time. Negotiations had lasted for almost 2 years, and the plant had been subject to many wildcat strikes during the war. The company, with the help of the provincial government, desperately strove to break the strike. Police attempts to break through the picket line were thwarted by strikers who blockaded all the streets in downtown Windsor, surrounding the plant with their cars parked, locked and abandoned.

On December 13, both parties agreed to binding arbitration under Mr. Justice Ivan Rand of the Supreme Court of Canada. In his arbitration award rendered January 29, 1946, he denied the UAW’s demand for a union shop and condemned both the union and the company for their behaviour. Most importantly, he provided for a compulsory checkoff of union dues for all employees in the bargaining unit whether they were union members or not, as all workers benefit from working conditions negotiated by the union. Finally, he developed a system of financial penalties, to be drawn from union dues, which would be levied against the union in the event of a wildcat or illegal strike, based on the duration of the strike. This arbitration ruling, later known as the Rand Formula, is widely used in collective bargaining in Canada.