IKEA’s inconsistent labor relations violate international union standards, leaving hundreds of employees without work in Canada and other countries across the globe.
It is often said that Canada is like the United States run by Scandinavians. But in the realm of labor relations, one iconic Swedish company, IKEA, is behaving in a very un-Scandinavian manner in the Vancouver suburb of Richmond, British Columbia (BC). Instead of practicing the labor-management cooperation that dominates in Sweden, IKEA has embraced the hardball antiunion practices that are far more commonplace in the United States.
With total revenues of $36 billion in 2012, IKEA is the world’s largest furniture retailer and one of its most recognizable retail brands. The company operates in 44 countries and has 139,000 employees. IKEA, which enjoys a good relationship with unions in Northern Europe, is a signatory to the United Nations Global Compact (UNGC), an international effort to encourage corporations to adopt socially responsible practices that prohibit companies from interfering with workers’ freedom of association. IKEA’s internal code of conduct incorporates Conventions 87 and 98 – on freedom of association and the right of collective bargaining – of the International Labor Organization. But IKEA’s respect for workers’ rights in Northern Europe and its commitment on paper to international labor standards has not influenced the conduct of its senior management in Richmond.
For the past six months, 350 workers have been locked out of the Richmond store – the oldest IKEA store in North America, which opened in 1976 – that is one of only two unionized IKEA outlets in Canada. (The other unionized IKEA store is in Montreal). After the company demanded sweeping concessions in pay and benefits, including the introduction of a two-tier wage structure – stating that it must bring labor costs in line with those of other IKEA stores and significantly improve the store’s productivity – workers overwhelmingly rejected the concessions several times. IKEA management claims that the dispute is a strike by the workers, who are members of the Teamsters union, and not a lockout. After nearly seven months of one of the longest ongoing labor disputes in British Columbia, only 35 employees have returned to work, while more than 300 others face ongoing economic hardship.
The Americanization of Canadian Labor Relations
Canada has stronger legal protections for workers’ rights than the United States and the “small differences” in labor policy clearly matter. Union density is 31 percent in Canada, compared with 12 percent in the United States, and it has fallen only slightly since the late 1990s, while US union density has declined steadily. Unionization and a more developed welfare state means, for example, that service sector workers in Vancouver are likely to enjoy a significantly higher standard of living than their counterparts south of the border in Seattle. But provincial law in BC still provides employers with considerable freedom to fight unionization, and IKEA management has taken full advantage of the loopholes in the law.
IKEA’s hardball tactics in BC may reflect a creeping Americanization of labor-management relations in Canada. Management has adopted several US-style anti-union tactics: It has hired replacement workers to do the jobs of locked-out employees; recruited the services of a well-known, antiunion law firm to conduct its adversarial campaign; and encouraged retail employees who might want to return to work to contact the Canadian Labour Watch Association, a conservative organization that promotes antiunion legislation. While it enjoyed a cooperative relationship with its BC workers until 2007, IKEA has now gone on the offensive, showing no willingness to compromise or engage in good-faith negotiations.
Employer lockouts are an increasingly common offensive tactic in the United States. Recent high-profile lockouts include those at the National Football League, National Basketball Association, Sotheby’s and the New York City Opera, as well as lengthy lockouts at American Crystal Sugar and Cooper Tire. While lockouts constitute an increasing proportion of work stoppages in the United States – where strikes have plummeted to historic low levels – they are still relatively uncommon in Canada. By adopting hardball antiunion tactics, which have long been the norm in US labor relations, IKEA’s Canadian management has behaved in a manner that violates both international labor standards and its own code of conduct. Like that of several others in the developed world, the Canadian labor relations system is increasingly being challenged not by militant workers, but by militant managers.
IKEA’s Global Labor Problem
The Richmond IKEA dispute has attracted international attention. Two global union federations, the International Transport Federation (ITF) and Union Network International (UNI), are coordinating support for the BC workers. An international delegation from Sweden, the United Kingdom and the United States visited workers in Richmond in November, and Richmond workers and North American union officials have traveled to Sweden to meet with unions, politicians, media and company representatives in IKEA’s home country. Workers from around the globe have protested IKEA’s antiunion behavior. In December, transportation, ports and maritime unions in Sweden, Finland, Norway, Denmark, UK, Belgium, Australia, Japan and the United States held actions in support of the BC workers.
Nor is the Richmond dispute simply a little local difficulty. In the past year, IKEA has been accused of committing labor-rights violations in the United States, Russia, Czech Republic, Ireland, Greece, Italy, Turkey and France. In June, IKEA employees in a dozen countries participated in protests against poor labor conditions and management violations of freedom of association. Turkey, where legal protections for labor rights are among the weakest in the OECD, stands out as an exceptional case: Management has driven out activists, paid members to resign from the union and subjected employees to a barrage of antiunion propaganda. In Holland and Belgium, IKEA has been accused of promoting “social dumping” in trucking by exploiting cheap and precarious labor from Bulgaria and Slovakia. In the United States, IKEA supplier Swedwood has fought aggressively against unionization for warehouse and supply-chain workers, while in a case that has provoked widespread outrage, IKEA managers in France have spied on both employees and customers.
Upholding IKEA Values
IKEA is practicing a clear double standard. It respects the rights of its workers in Northern Europe, but violates labor rights in Canada and elsewhere. It is a signatory to the UN Global Compact and incorporates the ILO’s core conventions into its company code of conduct, but fails to uphold these international principles. Thus far, IKEA has steadfastly refused to sign an international framework agreement – which would ensure that labor standards are upheld wherever it operates – with Union Network International (UNI). Such agreements are increasingly commonplace. In December, UNI signed its 50th global framework agreement – this one with another Swedish-based company, AB Loomis, an international cash handling firm – and it has ongoing campaigns for global agreements with, among others, Walmart, T-Mobile (Deutsche Telekom) and the security multinational Prosegur.
Even self-proclaimed progressive corporations such as IKEA that officially commit to international labor standards routinely violate weak labor laws. If it is serious about respecting workers’ rights, IKEA should resume negotiations with its BC workforce, end its antiunion behavior and commit to a global framework agreement on workers’ rights.