In Canadian labour law, the Rand formula (also referred to as automatic check-off and compulsory checkoff)[1] is a workplace compromise arising from jurisprudence struck between organized labour (trade unions) and employers that guarantees employers industrial stability by requiring all workers affected by a collective agreement to pay dues to the union by mandatory deduction in exchange for the union agreement to "work now, grieve later."
Historically, in some workplaces, some workers refused to pay dues to the union even after benefiting from wage and benefit improvements negotiated by the union representatives, resulting in friction and violence as they were seen as "freeloaders"; at the same time, absence of a peaceful grievance settlement mechanism created industrial instability as union members often walked off the job. The Rand formula compromise was designed to ensure that no employee will opt out of the union simply to avoid dues yet reap the benefits of collective bargaining, such as higher wages or health insurance.
Supreme Court of Canada Justice Ivan Rand, the eponym of this law, introduced this formula in 1946 as an arbitration decision ending the Ford Strike of 1945 in Windsor, Ontario.[2] The Canada Labour Code and the labour relations laws of a majority of provinces contain provisions requiring the Rand formula when certain conditions are met. In those provinces where the labour relations laws do not make the Rand formula mandatory, the automatic check-off of union dues may become part of the collective bargaining agreement if both parties (i.e., the employer and the trade union) agree. If there are religious objections to paying dues the dues may be donated to a mutually agreed upon charity.