Share the wealth, share the pain

Employers can ask unions to re-open collective agreements mid-term to reflect market reality — but there are hurdles (such as getting unions to agree)
By John-Edward C. Hyde
|Canadian HR Reporter|Last Updated: 08/10/2009

Scarcely a week into 2009, Canadians learned the economy was in recession. We have now endured a full six months of pain and suffering, and although there are rare success stories and the Bank of Canada expects the country to exit the recession in the next quarter, the economic streetscape is littered with bankrupt companies and job losses.

Against this backdrop, the majority of unionized Canadian companies are bound by collective agreements providing wage rates and benefits reflective of much healthier economic times. Simply stated, collective agreements negotiated over the past three years may challenge some companies wishing to remain economically viable in the current business climate. Is now the time to reconsider your collective agreement?

Many people believe wages and benefits provided in a collective agreement must remain fixed to the terms previously negotiated. However, there is a silver lining in every economic cloud and this may be the time for companies to consider re-opening collective agreements to negotiate wages and benefits that reflect market reality.