The year of living thriftfily

Economic downturn” was a tired but familiar phrase by the end of 2009. The tumultuous year was typified by cost-cutting measures such as mass layoffs, salary freezes and shortened workweeks, along with pension shortfalls, as reflected in the pages of Canadian HR Reporter.

Headlines included: “Workers delay retirement as economy tanks,” “2008: Worst year ever for pensions,” “Wanted: Managers who coach well in crisis,” “HR programs evolving as recession deepens” and “Silver lining to economic downturn.” (Jan. 26, articles 6633 and 6641; Feb. 9, article 6659; and Feb. 23, article 6694.)

Jack Welch, former CEO of General Electric, offered some words of advice for HR professionals during a recession: Take care of employees by treating everyone fairly and having a rigorous performance appraisal system. (June 15, article 6993.)

The federal budget in February was meant to stimulate the economy and reduce the recession’s impact on employers and employees, with changes to employment insurance, greater recognition of foreign credentials, help for older workers and changes to federally regulated pension plans. But women’s groups said the stimulus was too meagre and “too male.” (Feb. 23, articles 6682 and 6696.)

By the end of 2009, most companies were still recovering but the skies looked somewhat brighter for 2010. “Biggest challenge on road to recovery: Retention.” (Sept. 21, article 7189.) “Will workers come back?” (Dec. 14, article 7424.)

Here’s a brief look by topic area at news that made headlines in the HR world last year. (To view any of the articles, go to www.hrreporter.com, click on “Advanced search” at the top right-hand side of the home page and enter the article number. All subscribers to Canadian HR Reporter have unlimited access to the archive.)

Recruitment and staffing

With 71,000 full-time jobs shed in December 2008 and unemployment rising to 6.6 per cent, 44 per cent of respondents to a Watson Wyatt survey said they planned to lay off workers. But companies will still need to staff up once the economy recovers and HR professionals have an opportunity to build a stable of high-quality employees, said experts. (Jan. 26, article 6641.)

Many Canadians were considering postponing retirement, according to several surveys, which could lead to rising health-care costs and more instances of short- and long-term disability, along with succession-planning challenges. (Jan. 26, article 6633 and May 18, article 6912.)

To try and avoid layoffs, organizations looked for creative ways to save money, such as reduced workweeks, buyout packages for employees close to retirement and a federal work-share program. (Feb. 9, article 6672 and March 9, article 6730.) Loblaw announced it was creating up to 10,000 full-time jobs, converting about 10 per cent of its workforce as part of a plan to boost productivity and retention during the recession. (March 23, article 6761.)

Saskatchewan sought to lure jobseekers and new graduates to fill more than 6,000 jobs through a national job fair, a billboard and radio campaign and up to $20,000 in tax rebates. (April 20, article 6843.)

Health and safety

In looking at the safety systems and legislation of other countries, a report concluded policies in British Columbia’s Workers’ Compensation Act dealing with worker participation and representation in this area were “weak, ineffectual and increasingly irrelevant to the construction industry.” (Feb. 9, article 6670.)

A program designed to reward Ontario employers for good safety practices has seen some taking advantage of the experience rating system to receive insurance rebates without actually improving health and safety in the workplace, according to a report. (April 6, article 6797.)

The H1N1 flu virus put business continuity planning in the spotlight, as 84 per cent of HR professionals were concerned about a pandemic, according to a September survey by Canadian HR Reporter. While more than one-half were not convinced of the urgency of responding, others provided hand sanitizers, suspended a requirement for doctors’ notes, boosted communication to employees, identified critical and non-critical staff, considered teleworking options and upped staff training. (Sept. 7, articles 7150 and 7132 and Nov. 30, article 7392.)

With Bill 168, Ontario proposed new occupational health and safety legislation to protect workers from violence and harassment on the job. Five other provinces have already included such a measure. (May 18, article 6917 and Nov. 16, article 7338.)

Three reports from Canada, the U.S. and Greece showed a growing link between weight gain and sedentary jobs, leading to higher absenteeism, health-care costs, disability claims and risk of occupational accidents, along with reduced productivity and weight discrimination. (June 1, article 6953.)

Labour relations

The issue of union fines came to the forefront when two major unions asked the Supreme Court of Canada to hear an appeal regarding a ruling that refused to enforce union fines against members who crossed a picket line. (Feb. 23, article 6686.)

Labour and management should be working together throughout the life of collective agreements to reduce the frequency and duration of work stoppages in the federal private sector, according to a report by labour lawyer Peter Annis, as Canada has the highest rate of “person days not worked” due to work stoppages among G-7 countries. (April 20, article 6841.)

Having had a staff relations representative program since 1974, the RCMP was given the right to unionize (in 2010) after the Ontario Court of Appeal ruled the program breached the right to collectively bargain under the Charter of Rights and Freedoms. (May 4, article 6874.)

In a controversial move, Chrysler sent a letter to 9,000 Canadian workers stating wages would have to be drastically reduced and criticizing the Canadian Auto Workers union for jeopardizing the company’s future. (May 4, article 6870.)

Top employers

High engagement scores helped put EllisDon at the top of the Best Employers in Canada for the second year in a row. Common attributes of top employers were solid HR programs, transparency and fairness, along with strong leadership and management, found the annual survey by Hewitt Associates. (Jan. 26, article 6642.)

Canada Post, the University of British Columbia and Vancity were among the Best Diversity Employers of 2009, which recognizes exceptional workplace diversity and inclusiveness, while employers that embraced the environment have an easier time attracting employees, according to winners of Canada’s Greenest Employers. (March 9, article 6727 and May 18, article 6899.) And traditional benefits upstaged flashy perks in Canada’s Top 100 Employers for 2009, with stability and continuity in workplace programs the dominant values. (Nov. 2, article 7308.) All the lists were compiled by Mediacorp Canada.

The performance of Canada’s Most Admired Corporate Cultures of 2009 significantly outpaced the S&P/TSX composite index by an average of 300 per cent, according to Waterstone Human Capital. (Dec. 14, article 7416.)

Strategic HR

The Executive Series, a partnership with the Strategic Capability Network and Canadian HR Reporter, provided high-level, strategic HR thinking. Topics discussed in 2009 included:

• Mentoring programs can accelerate leadership development so leaders-in-waiting are ready to take the place of those heading out the door. (March 23, article 6754.)

• Too many leaders rely on behaviours that got them to their position and are not willing to learn new behaviours, which often leads to failure. (April 20, article 6836.)

• Networks play a critical role in organizational excellence as knowledge workers rely on colleagues, not databases, for information, but formal organizational structures often set up barriers between groups, making innovation less likely. (May 18, article 6907.)

• Too often HR concerns take a backseat to finance and legal concerns in mergers and acquisitions, but HR professionals have a key role to play in helping business leaders see organizations as a set of capabilities, not just figures on a balance sheet. (Aug. 10, article 7093.)

• People are more willing to take greater risks to avert potential losses, so organizations should communicate both the good and the bad when trying to get workers to fully support a major change. (Sept. 21, article 7181.)

HR profession

The inaugural HR Summit Awards, recognizing excellence in HR leadership in Canada, debuted in January. A partnership between Carswell, a Thomson Reuters business (publishers of Canadian HR Reporter), and the Human Resources Professionals Association (HRPA), the awards — for a “rising star,” corporate governance, social responsibility, professional of the year, talent management and academic of the year — went to seven winners. (Feb. 23, article 6695.)

Rules of conduct for HR professionals were introduced by the HRPA for members as of June. (March 9, article 6729 and July 13, article 7028.) The association also replaced the national exam that assessed HR experience with a three-year HR experience requirement. (June 1, article 6958.)

The financial crisis saw companies shifting pension responsibility from HR to finance in an effort to manage defined benefit (DB) plans affected by market volatility, according to a survey by Watson Wyatt. (May 18, article 6903.)

Four provinces announced they were launching the Senior Human Resources Professional designation to recognize senior HR professionals who have made a significant impact on their organizations and the profession. (July 13, article 7043.)

And an HR metrics service was introduced by the British Columbia Human Resources Management Association to help HR professionals become more strategic by using people and financial data to make workforce planning and HR decisions. (Sept. 21, article 7188.)

Benefits

Business travel, holiday celebrations, extracurricular memberships, salary increases, tuition reimbursement and subsidized dining were on the way out, according to a Watson Wyatt survey that looked at changes to HR programs with the market downturn. But retiree benefits, medical, dental and disability plans, employee recognition, adoption policies and flexible work arrangements were considered safe. (Feb. 23, article 6694.) However, some of the perks cut back during the recession — such as training and travel — may not be resurrected, according to another survey by Watson Wyatt. (Aug. 10, article 7101.)

Generic prescription medications are often more expensive in Canada than the U.S. because of a lack of competition, found a study by the University of Toronto. (Feb. 9, article 6663.) And the battle for market share between generic and brand name drug manufacturers was expected to heat up as patents for several brand name drugs expire in 2010. (Aug. 10, article 7072.)

The use of employee assistance programs increased significantly — with a 42-per-cent rise in service for financial counselling related to divorce — in the last quarter of 2008, according to a report from Shepell-fgi. (March 23, article 6759.) Spikes were also seen in the oil and gas industry when it came to addiction issues. (Sept. 21, article 7190.)

Employers started gearing up for the February 2010 Winter Olympics by offering employees a variety of options: paid time off to volunteer, themed events, flexible work schedules and an employee loan program. (June 15, article 6978; Sept. 24, article 7198; and Nov. 16, article 7353.)

Compensation

Having said there was no need to push for “say-on-pay” resolutions, the Canadian Coalition for Good Governance decided boards should voluntarily provide shareholders with an advisory vote at each annual general meeting. (April 20, article 6842.)

An increased scrutiny of executive pay — from shareholders, the public and the media — could result in smaller bonuses tied strictly to performance, found a report by Watson Wyatt. (April 20, article 6838.) And while executive compensation is expected to return to pre-recession levels in 2010, the methods of determining pay are changing to include stock units and clawbacks. (Sept. 21, article 7180.)

In the fall, it was discovered Ontario’s Ministry of Health and Long-Term Care had been using a system of secondments since 1994 to pay salaries to top bureaucrats — exceeding government-set guidelines — to compete with the big salaries of hospital CEOs and top-level executives. (Nov. 2, article 7306.)

Immigration and migration

Following the lead of the U.S., Canada allowed North American Free Trade Agreement professionals to work for three years in Canada before they renewed their permits. The change provided employers with access to skilled labour to complete projects and tied in better with the new Canadian Experience Class program, which allows temporary foreign workers with two years’ experience, who fit a certain occupational classification, to transition to permanent residency. (Jan. 26, article 6634.)

Full labour mobility across Canada was furthered with changes to the Agreement on Internal Trade in January that required people with a specific professional or occupational certification in one province or territory be recognized as qualified to practise their profession in all provinces and territories where their profession or occupation is regulated. (Jan. 26, article 6640.)

In light of the economic downturn, the federal government made several changes to the temporary foreign worker program, such as replacing the provincial occupations-under-pressure lists with a national advertising standard. (April 6, article 6784.) And a scathing report from Canada’s auditor general concluded there is a lack of strategy on the government’s part to ensure permanent and temporary workers coming to Canada meet the needs of the labour market and avoid exploitation. (Nov. 30, article 7391.)

Manitoba boosted protection for foreign workers with its Worker Recruitment and Protection Act, requiring all employers keen to recruit such workers to register with the government’s employment standards division and not allowing employers and recruiters to charge fees in helping people find employment. (May 4, article 6875.)

Pensions

A new Quebec law allowed the government to take over the private pension plans of companies that go bankrupt to protect workers and pensioners if their pension funds are insolvent and give firms more time to replenish pension funds. (Feb. 9, article 6673.)

The Nova Scotia Pension Review Panel pushed for a province-wide pension plan, similar to that proposed by a joint expert panel on pensions in Alberta and British Columbia. (March 23, article 6755.)

While Ontario is the only Canadian jurisdiction with a pension benefit guarantee fund, improper funding and the stock market meltdown — along with the collapse of giants such as GM and Nortel — meant the fund wouldn’t be able to cover all employees with at-risk pensions, warned Premier Dalton McGuinty. (May 4, article 6876.) And current and former employees of Nortel — which announced it would cease operations — voiced their frustration and anger with the provincial and federal governments when it came to the loss of pensions, severance pay and benefits after bankruptcy. (Nov. 2, article 7303 and Nov. 16, article 7347.)

In a decision hailed as a victory for employers, the Supreme Court of Canada ruled in favour of Kerry Canada, which had transferred surplus money from a closed DB plan to a defined contribution plan in 2000. (Aug. 10, article 7104 and Sept. 7, article 7148.)

Pulse survey

Canadian HR Reporter, in partnership with the HRPA, ran a monthly Pulse Survey, polling hundreds of HR professionals each month on various topics. Highlights of 2009 survey results included:

• HR is increasingly a business partner, according to 64 per cent of respondents, though 77 per cent said HR has a tougher time establishing credibility than other professions. (Jan. 26, articles 6632 and 6631.)

• Only people with an HR background should run HR departments, as 57 per cent of respondents said it’s a bad thing when someone with no specific HR background is put in charge of HR. (March 9, articles 6725 and 6724.)

• More than three-quarters of HR professionals thought an experience requirement should be added to Canada’s HR professional designation and would enhance its value. (May 4, articles 6868 and 6867.)

• Forty-two per cent of HR professionals felt the HR profession should do more to attract and integrate internationally educated professionals into the profession. (June 1, articles 6950 and 6949.)

• Most HR professionals (53 per cent) didn’t think a supervised practice requirement would make the Certified Human Resources Professional designation any better. (Nov. 30, articles 7384 and 7383.)

Employment law

Canadian HR Reporter provided updates on employment law decisions from coast to coast. Here’s a sampling of stories:

• Just cause termination is still not clearcut, as evidenced by a B.C. decision that did not focus on a worker’s thievery at work but his behaviour in the course of the investigation. (March 23, article 6753.)

• The British Columbia Court of Appeal tried to slow the trend in which short-term employees in non-management positions are awarded disproportionately large notice periods in wrongful dismissal cases. (April 6, article 6791.)

• A restrictive covenant prohibiting an insurance broker from working within a certain geographic area was declared invalid because it was too ambiguous. (April 20, article 6837.)

• A bus company’s attendance management program did not discriminate against employees with disabilities, according to a court’s ruling. (May 4, article 6869.)

• “Double-dipping” dismissal damages were struck down as a court decided a fired employee was not entitled to both salary and disability benefits in lieu of reinstatement. (May 18, article 6887.)

• Following the lead of Quebec, Nova Scotia and Newfoundland and Labrador, Ontario banned the use of cellphones and other handheld personal devices while driving and B.C. is expected to follow. (May 18, article 6908; Sept. 30, article 7206; Oct. 22, article 7276; and Nov. 16, article 7341.)

• Telus Sourcing Solutions was served with a $50-million class-action lawsuit after employees of a Calgary union said the provider made several payroll mistakes, such as faulty pension contributions, overpayment of wages and T4 errors. (June 15, article 6991.)

• A court ruling in July upheld an arbitrator’s ruling that employers cannot implement random drug and alcohol testing in a unionized workplace without the union’s consent. (July 13, article 7040.)

• Ontario employers could be in court more often over employment disputes as the maximum damages in small claims court rises from $10,000 to $25,000 as of Jan. 1, 2010. (Oct. 19, article 7268.)

• A collective agreement between Air Canada and its pilots that required retirement at age 60 was ruled discriminatory. (Nov. 2, article 7302.)

• A Calgary construction company was sued for more than $3.5 million by the families of five people who were killed by one of its truck drivers — an alcoholic who had been fired from a previous job after being in an accident. (Nov. 16, article 7351.)