Layoffs or fewer hours? Neither thank you

By Asha Tomlinson
|Canadian HR Reporter|Last Updated: 09/05/2003

In these uncertain economic times, employers are looking for ways to balance debts and increase productivity. To do this, some are suggesting various flexible work arrangements — such as work sharing or reduced hours — to avoid layoffs, but Canadian Auto Workers president Buzz Hargrove said unions should refuse to buy-in.

“This is a cop-out, they’re simply trying to take advantage of a difficult situation,” said Hargrove.

He said several companies are pressuring workers to accept pay cuts and make concessions, but union members must maintain a hard line against saying yes to these tactics.

“Every time there’s a bit of a problem, they try to come in and roll back the clock on wages, benefits and working conditions, and we’re just determined not to let that happen.”

Lloyd Field, author of Unions are not Inevitable, said Hargrove’s no concession stance is no more than a marketing strategy. He said unions need to realize that they can’t sell job security and inflexibility in the current economic environment. As times change and the recession deepens, employers are trying to get more value for their payroll dollar, he said, and that may mean reduced hours and rollbacks.

“So, from the union’s point of view this is seen as nothing more but taking advantage of the worker, and the union’s reaction to that particular management is the no concession argument,” said Field. “But really that does nothing economically for the company or our society. It does sound like a very good marketing pitch for the CAW and other unions that have taken that strategy.”

Unions do have the difficult task of determining whether employers are being honest about the situation or posturing, said Ted Turner, chair of the Canadian Employers Council and president of Hunt Personnel. Experienced negotiators, he said, can usually figure this out.

“The labour people that I deal with are certainly aware of the realities of the workplace. So, yes there is posturing on both sides but they’re pretty schooled in knowing what’s a real posture and what’s just ranting and raving.”

CAW has had a long-standing policy against concessions, and Hargrove reinforced this at a CAW council meeting, last month. He told his members if one bargaining unit gives in, it would set the trend for others to do the same, and other CAW leaders are making it clear they are not backing down.

In Windsor, Ont., after cutting its workforce in half, Windsor Match Plate & Tool Ltd. asked the remaining workers (35 tradespeople) if they would agree to a 15 per cent cut in wages, as well as give up their cost-of-living protection. Windsor’s CAW union leader, Glen Myers, rejected this offer flat out.

Another company, which has three manufacturing plants in Ontario, announced it wanted to close one of the plants. They told all three plants whoever is willing to give up the most will survive. Hargrove said that’s outright blackmail.

“Two out of three will survive, but at the end of the day, there’s going to be one plant closed and a couple of hundred jobs gone no matter what. So our point is you can’t buy jobs by giving up wages, benefits and working conditions.”

He said agreeing in to concessions undermines the union and its past gains.

“It would take us many, many years to get that back and to me it doesn’t make any sense,” he said.

In what was another volatile labour standoff, tension has abated slightly between Air Canada and the CAW. They agreed to a program that would reduce labour costs through voluntary programs including leaves of absence, job and work sharing and early-retirement packages. The difference with Air Canada’s situation is that they have a no-layoff policy in place until April 2004.

“So, the company was able to reduce labour costs but not at the expense of the workforce, but by supporting workers,” said Hargrove.

Another prime example of union and management working together is CAW’s unique initiative with DaimlerChrysler Canada.

The company announced in January of last year that it plans to cut as many as 2,700 employees from its Canadian workforce.

Phil Bezaire, vice-president of human resources for DaimlerChrysler Canada, said in the case of its Brampton, Ont. assembly plant, they were faced with a reduced volume requirement. They had to eliminate production shifts, going from three to the traditional two-shift structure, and that resulted in numerous layoffs. Whereas in the other locations, they were able to offset the number of layoffs with early-retirement options, that wasn’t an option for Brampton because of its relatively young workforce. During negotiations with the union, Bezaire said they wanted to ensure their laid-off employees didn’t go away hating the company, so they came up with two remedies, jointly developed by the union and the corporation.

“We authorized payment for a training program to prepare employees for layoffs,” said Bezaire.

The company and the union opened up an “action centre” — funded by federal and provincial governments — which helps laid off workers find and develop new careers.

“About 80 per cent of employees that were laid off registered with the centre and have been active in participating,” he said.

DaimlerChrysler also ran an ad in the Globe and Mail, in late November, encouraging other employers to hire their laid-off workers. Bezaire said this was done on advice from “action centre” board members who felt the centre should be promoted, as well as their unemployed workers who are searching for jobs.

This open relationship with the union did not come easy, said Bezaire. It’s been 15 years worth of negotiations and discussion. Today they consider CAW as partners with DaimlerChrysler, which translates into a culture of engaging participation in the company’s objectives.

“Things work well if you listen,” he said. “Sometimes you don’t like what you hear but it’s through dialogue that you can come up with a workable compromise and that’s really the way our manufacturing management operates.”

Hargrove’s philosophy has always been that labour and management relations are like a marriage.

“You’re in it for the long term and there’s absolutely nothing to be gained by either side taking a short-term advantage. So, any successful company has to have the long term in mind when dealing with the union and its members.”

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