Petro-Canada Has Two Main Areas of Operation: Location and Extraction of Oil and Gas; And

Petro-Canada

Petro-Canada has two main areas of operation: location and extraction of oil and gas; and refineries that produce gasoline and oil products. The company, which was established as a Crown corporation in 1975, was privatized in the early 1990s and had to make a number of changes to increase its profitability. Some refineries and retail outlets were closed and the workforce was reduced.

The Communications, Energy and Paperworkers Union represents more than 90 percent of Petro-Canada’s unionized employees. Petro-Canada has a history of attempting to establish a cooperative relationship with the union. In 1984 the company established a formal labour relations policy that provided the company would deal in good faith and make efforts to develop and maintain constructive and harmonious relationships. In 1994 the company and the union signed a “relationship objectives” agreement that provided that the parties dedicate themselves to the principles of cooperation, open communication, and trust.

Key players in the company and the union have shaped the union-management relationship. A union vice-president has endorsed cooperation and stated that traditional bargaining approaches do not work in the new economic environment. A former vice-president of the company was a strong proponent of cooperative relations. The parties have used interest-based or mutual-gains bargaining. The company and the union have worked together to develop policies outside of the collective agreement, including a harassment policy. In dealings with its non-union employees, Petro-Canada has extended union rates of pay and provided a complaint mechanism.

The oil and gas industry has been subject to fluctuations in oil prices and the retail market for gasoline is competitive. The industry is technologically advanced and capital-intensive. Technological changes are ongoing and facilities must be continually upgraded. Together with the union, Petro-Canada has adopted innovative policies including pay for knowledge, and work teams that have assumed some of the tasks formerly performed by supervisors. Other companies have said that the agreements Petro-Canada signs with its union have given away some of management’s rights. Petro-Canada agreements have included clauses requiring union membership and dues deduction. Some U.S.-owned companies have opposed compulsory union membership and dues deduction provisions.

Questions

What are the key environmental factors affecting Petro-Canada?
What labour relations strategy has Petro-Canada adopted and what are the reasons for the company’s approach to labour relations?