Work Sharing program still popular, extension ‘appealing’
Early last year, conveyor manufacturer Univeyor B.C. saw its sales fall substantially. So in February 2009, about one-half of the 20 workers at the Burnaby, B.C.-based company agreed to participate in the federal government’s Work Sharing program.
The program allows employers to avoid temporary layoffs — and avoid expensive rehiring and retraining costs — by implementing a workweek reduction of 20 to 60 per cent (one to three days) while eligible employees receive employment insurance income support.
“I was so worried about it, with my employees, but when I went in there and explained what was going on, they all thanked me for keeping their jobs,” said Joanne Dancer, owner of Univeyor. “There was such a sudden drop in the economy — no one really knew how to plan for that. And we had a contract coming up… so we didn’t really want to lose our people.”
Univeyor’s usage varies, from zero to two days per week, she said, and the program has allowed it to branch out and test new opportunities. The company is one of 6,000 involved in Work Sharing as of Jan. 31, 2010, according to Human Resources and Skills Development Canada (HRSDC).
But while the federal government temporarily extended the program by 14 weeks in February 2009, to a maximum of 52 weeks, many companies that signed on could see the much-needed arrangement come to an end in the next few months.
(Work Sharing is an ongoing program that will continue to be available, with the maximum initial duration of agreements returning to 26 weeks, with the possibility of an extension to 38 weeks.)
Come this summer, Univeyor will have to play it by ear, said Dancer.
“The economy’s so strange and B.C. has the Olympics right now, I don’t know how that affects us,” she said.
“We don’t want to, obviously, stay on this program. That’s certainly not our goal. We are hoping to have at least a chance to judge where the economy’s going to go by that time and what we can do to offset some of these things.”
Lately, there have been rumours the deadline will be extended once again by Ottawa. That would definitely be of interest as people are in a holding pattern right now, uncertain of how to proceed, said Dancer.
“It’s going to be a slow come-out and if you want to keep companies going, you have to help them.”
If there is an extension, that would “absolutely” be appealing, said John Simpson, director of personnel and HR at Calgary-based steel manufacturer Standen’s, which has been involved with Work Sharing since March 2009. But once the company goes off the program, the transition won’t be difficult he said, especially with usage down to about five per cent and some areas of the company actually working overtime.
“Work Sharing is a recovery program, it’s not a replacement program,” he said.
While Standen’s tried to keep employees fully employed, by March 2009, almost all of the 475 employees went on the Work Sharing program, to be fair, said Simpson.
“The whole objective here was how can we weather this recession and keep everybody employed,” he said. “It beats the heck out of laying off people and then rebuilding your staff once the economy recovers.”
The company originally applied for employees to work 40 per cent of the hours in a week, meaning they would work three days a week but be paid for more than four days, he said.
However, Standen’s has been closer to 33 per cent when it comes to Work Sharing hours, said Simpson, and as the economy has improved, levels are closer to five per cent of the hours.
“Work Share isn’t a financial benefit to the company, it’s a financial benefit to the employee so, to me, as long as I can have something there to protect an employee from the uncertainty of the economy, I want to keep it going. If it becomes a hindrance, we’ll say, ‘OK, let’s stop,’” he said. “I’d much rather have that insurance for employees, as long as it makes sense.”
As part of the application process for Work Sharing, employers must produce a recovery plan outlining the steps taken to ensure the viability of the business during the period of the agreement and for recovery as the economy strengthens. This should include plans to resume normal business levels in the future and a description of activities considered important to the continued viability of the business.
“Due to the uncertainties arising from the current economic downturn, it is accepted that not all employers will be able to provide all the elements listed above or be able to articulate specific timelines or benchmarks related to recovery,” said HRSDC.
“Generally speaking, it is expected that the business-generating and cost-cutting activities outlined in the recovery plan will enable a business to return to normal levels of employment (employees will go back to working full time) at the conclusion of a Work Sharing agreement.”
Following participation in a Work Sharing agreement, employers can apply again following a waiting period equal to the duration of the previous agreement (or 26 weeks, whichever is less).
Global Upholstery reviews its Work Sharing program monthly, having been involved since June 2009 when most of its 1,100 employees agreed to participate, after reductions in overtime and temporary staffing were not enough to offset ailing sales.
The move to a four-day workweek “went pretty smoothly, employees could see we didn’t have the work volume we had before,” said Tony Davis, director of corporate human resources at Global Upholstery in Toronto.
“For us, a lot of our staff are very long-service and skilled in their trade... and you obviously want to keep that workforce in place.”
The transition off Work Sharing shouldn’t be too difficult, he said, but could raise the issue of whether the manufacturer can justify a four-day workweek — though the company would prefer to go back to five days — or how to bring back employees who have been out on cache jobs.
“One’s got to choose their home, so that could be a bit of a challenge for us.”
But more recently, a few employees of the office furniture manufacturer have come off the program in areas such as engineering, which has picked up.
“Hopefully, should the need for us to have a full five-day workweek cycle occur, and we hope sooner than later, we would go off the program,” he said. “We hope the market will have sufficiently improved by (the end of the agreement).”