What is the “Rand Formula”?
The Rand Formula is based on the principle that those who benefit from a collective agreement should contribute dues even when they are not members of the union.
Until the 1940s, Canadian unions struggled to be financially viable enough to shoulder the costs of collective bargaining and other representation efforts on behalf of their members. Since the seminal arbitral decision from Supreme Court Justice Ivan Rand on January 29, 1946, following a 100-day strike by Ford auto workers, Canadian unions have had at their disposal a means of securing a nominal percentage of their members pay via an employer regulated payroll remittance.
Formally, this union security provision included in scores of collective agreements, provides that all employees of an unionized employer must pay a determined fee, or “union due”, whether they are a member of the union or not, to sustain the services they receive from the union for the lengths of the collective agreement.