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Labour action continues at Federated Co-op

Pension funding behind unrest at Co-op Refinery Complex

Screen Shot 2019-12-16 at 3.27.01 PMOn December 3, 2019, 729 unionized workers at Regina’s Co-op Refinery Complex, an 800-acre site in the city’s northeast sector that produces up to 145,000 barrels per day, went on strike to protect what they saw as a challenge from management on their pensions. Two days later, workers were locked out of the facility after management determined their presence constituted a threat to safety. Non-unionized staff has been brought in to maintain production, a move that has angered Unifor Local 594 members who have since organized boycotts of Federated Co-operatives Limited (FCL) locations such as grocery stores, gas bars and cardlocks as well as convenience stores and car washes.

Unifor’s position is that it’s all about the integrity of their negotiated contract that ensures pension security for those who choose to remain in the Defined Benefits Pension Plan (DB). The stated goal for workers is to be able to choose whether or not a Defined Contribution Pension Plan (DC) or the DB option is the right way for workers to go and whether those who choose the DB plan will have their pensions protected.

Unifor points to statements from Federated Co-op’s executive vice-president, Vic Huard who is quoted as saying, “Every single employee who currently is in the Defined Benefits Plan will remain in that plan from now until when they retire.” They argue that the company is now reneging on this in a move that will cost workers money and pension security.

Federated Co-op has countered by saying that workers are being asked to make a choice. The first option asks unionized employees to contribute to their current Defined Benefits Pension Plan, as most employees enrolled in pension plans in Canada already do. The second option is to move to a Defined Contribution Pension Plan, which is the same as the one offered to management staff, whereby FCL contributes 10%.

Currently, FCL funds the entire DB for unionized workers. In the DC scenario, workers would see the company shell out as much as 14% of the costs, while workers paid the rest. Terms of the 2016 contract froze out new workers from the DB side and received agreement to continue full pension funding for its legacy employees.

Since the 2016 agreement was inked, Federated has had a second look at the DB option and suggests that the funding of this benefit places it in a competitive disadvantage with other refineries. They claim that the benefits are impacting profits and costing big dollars to members, as well as associated Co-operatives across Western Canada. They report that their unionized employees currently earn, on average, a base wage of $104,000 per year. With overtime, that increases to $123,000.

When the Defined Benefits Pension Plan and other benefits are factored in, the total average compensation rises to $172,000 per year. They also report they are offering an increase of 11.75% over four years to the employees’ base wage before overtime, pension and benefit considerations. And, FCL has offered workers access to the company’s performance plan that pays an annual incentive bonus based on the refinery’s performance.

The union has said no deal, citing 75 years of profits at FCL and a refinery that has made close to $3 billion in profit since 2016. They comment that the profits are the result of the skilled labour and their workers are entitled to a share in the form of continued DB pension plan contributions by FCL. Workers are now picketing retail locations and the union has been running a billboard campaign in cities across the West.

The Refinery Complex has also been the recipient of a blockade, where fuel trucks have been prevented from entering the plant. Videos that seek to ‘out’ replacement workers have also been hitting the Internet. On January 13, 2020, Unifor 594 blockaded the Prairie Sky Co-op’s Crossroads location in Weyburn. There, picketers permitted customers of the gas bar, cardlock and restaurant to come and go, but employees were only allowed in, making it difficult for the business. Other locations such as Winnipeg’s Pembina and Taylor gas bar, car wash and c-store have seen Unifor teams picket and distribute information as the strike moves toward a third month of action.

Octane editor Kelly Gray can be reached at kgray@ensembleiq.com


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Gas bar and car wash owners’ top 4 regulatory concerns

Screen Shot 2019-10-15 at 12.26.50 PMThe auto sector is undergoing rapid change, from new technology and alternative fuels, to new taxes and regulations that hit your bottom line. The key to staying competitive is to understand the challenges you’re facing and how to manage them.

The business counsellors at the Canadian Federation of Independent Business (CFIB) field questions from gas bar and car wash owners all the time. Here are the four most common concerns we hear about – and some solutions to consider.

Labour laws

Many businesses face challenges filling vacant positions. An understaffed gas bar or car wash raises some perplexing HR questions. For example, if an employee is working alone for longer than five hours, do they need to close up shop for the 30-minute break they are entitled to – potentially losing customers for that half-hour?

Unlike a big business, you may not have a full HR department, leaving you to navigate questions like this related to hiring, labour laws, breaks and holidays alone. CFIB’s business counsellors can help provide resources and advice. In this case, our counsellors often advise employers to consider splitting their employees’ breaks into 15-minute intervals, before they have worked a full five hours, in order to avoid having to close up for longer periods of time.

Canada Revenue Agency

Dealing with the CRA, whether you’re being audited or just looking for basic information, can be intimidating. Many small business owners say they feel the CRA treats them as if they’ve done something wrong.

CFIB’s work with CRA has led to many improvements to their customer service, including getting CRA to honour written responses sent through My Business Account. That said, being proactive in managing your tax records can help keep the tax man at bay.

 A good payroll solution is a great way to ensure your payroll taxes and T4s are submitted accurately and on time. CFIB has partnered with Payworks to offer  members an exclusive discount on services to make managing payroll affordable and easy.

Credit card fees

It can feel almost mandatory to accept credit cards these days. Unfortunately, the processing fees involved can cut into already razor-thin profit margins, especially with more customers using specialty and reward point cards.

CFIB has been advocating for independent businesses with government and credit card companies for more than a decade, and we’ve scored some great wins, including the implementation of a Code of Conduct that protects small businesses from unfair treatment by the payments industry. In 2015, we secured lower fees and a five-year freeze from Visa and Mastercard – and another rate reduction just last year.

 Federal carbon tax

 The federal carbon tax, introduced in Saskatchewan, Manitoba, Ontario and New Brunswick this April, is already causing regulatory headaches for gas stations, which need to display the fuel charge on their receipts. Some independent gas bar operators have told us that they’ve had to switch their systems entirely to accommodate for the new line on receipts.

In its campaign against the carbon tax, the Ontario government is introducing a new rule that forces gas stations to display a sticker on every pump or face a fine of up to $10,000 per day. This kind of regulatory overreach eats up gas bar operators’ time and resources, with no benefit in return. I encourage all business owners who are negatively affected by the carbon tax in one way or another to contact CFIB and reach out to their elected representatives and make themselves heard.

 Remember: you are not alone

 Owning an independent business can be a lonely calling, particularly when you’re up against big players like government and large corporations. Having someone in your corner, with the right mix of policy solutions and support, can make all the difference. Visit cfib.ca to discover this business edge.

Dan Kelly is president & CEO of the Canadian Federation of Independent Business. 

 

 


3 strategies to help c-gas operators navigate labour pressures

Screen Shot 2019-05-21 at 10.56.42 AMCanada is home to just shy of 12,000 fueling sites. These sites offer employment to more than 85,000 workers who provide services in convenience retail, car wash and at the pumps. Over the past number of years, the industry has been racked by tough labour market realities that have led to businesses searching harder to fill staff openings.

“Employers in all types of convenience and gas operations generally report that their current workforce is composed primarily of students working part-time,” says outgoing Western Convenience Stores Association (WCSA) president Andrew Klukas. Klukas was instrumental in the completion of Sector Labour Market Partnerships Final Engagement Report, the WCSA’s recent submission to BC Ministry of Jobs, Tourism and Skills Training. “These employees are difficult to retain. Employers’ expectations regarding commitment, reliability and flexibility were often not met. This mismatch in expectations is made evident by employees quitting with inadequate notice and being resistant to performing the full scope of tasks associated with the job. Employers consistently report frustration and stress upon having to prioritize the need for constant staff supervision, recruitment and other human resource issues over other aspects of their businesses. One meeting participant said she interviews job applicants every day.”

He reports there are high costs related to finding and retaining suitable employees. For example, the financial hit to companies involved in providing new employees with training and orientation is estimated to be somewhere between $2,000 and $4,000 a month. “One employer with an overall staff compliment of four employees reported training more than 30 new employees over three years at a cumulative cost of more than $60,000. In this instance, all of these employees either quit or were let go for various reasons related to unsatisfactory performance.”

Operators can often see that higher wages would alleviate some of the Human Resource (HR) challenges, but sales gains and profit margins remain low in both fuel and c-gas retail sites. Last year convenience was up by just under two per cent in sales with profit margins holding below five per cent. Dedicated fuelling sites without c-store saw negative growth and much lower profits on gas and diesel sales. This low margin means very little room when it comes to wage increases. Regulatory pay upticks, such as those proposed by Ontario’s previous Liberal government, were met with concern by business that balked at $15 per hour for minimum wages. The new Ford Conservative government has frozen the increase to $14 until 2020.

Across Canada the highest wage minimum – in Alberta – stands at $15. The province was plagued by staffing shortages caused by a tight labour market where high industrial wages ($27.25/average) in the oil patch were pulling lower wage workers from businesses such as hospitality and convenience/gas. The answer was to pay a higher minimum. Alberta Opposition Leader Jason Kenney says he will roll back the minimum to $13 if he is elected. Pundits in the province suggest Kenney has only created confusion in a labour market where it remains a challenge to obtain the staff necessary to run many small retail operations.

One way employers were able to step around the HR problem was to hire Temporary Foreign Workers (TFW). Facing a public backlash because of the optics of the program, the federal government created changes that scaled back TFW. One change that hit c-gas hard was the $1,000-per worker non-refundable application fee. Another change saw the application process slow to around six months. As well, employers were restricted on the number of temporary foreign workers they could hire. According to Klukas, B.C. operators reported having success with the TFW program before the $1,000 fee, but the process has now become too challenging, expensive and time-consuming to be of value to them.

The HR challenge in Canada’s c-gas sector is not expected to ease any time soon. Here are three suggestions that could help to make a difference:

  1. Establish a dedicated National Occupational Classification (NOC) code for workers in c-gas. Currently, convenience, gas, and car wash workers are grouped alongside other sectors, such as hospitality, where duties have only minor similarities such as those at Point of Sale. Workers in c-gas have unique skill sets in hazardous material handling, age-restricted products, and safety. The NOC should recognize this.
  2. To improve staff retention operators should look to enhance recruitment, early orientation and training activities with an eye to creating greater understanding regarding expectations related to performance and the work environment.
  3. While employers state higher wages are a big challenge, modest wage gains do attract more suitable job applicants, improve retention and help reduce the costs associated with continuous recruitment and training.

Originally published in the May/June issue of Octane