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Unilateral cost-cutting measures could lead to toxic workplaces

Ontario employers are likely well aware of the legal implications of Bill 148; however, it’s important to also be mindful of the high cost of low morale, Toronto mediator Bernard Morrow tells AdvocateDaily.com.

Bill 148, the Fair Workplaces, Better Jobs Act, 2017, most notably increased Ontario’s minimum wage to $14 from $11.60 per hour.

Labour Minister Kevin Flynn recently said the majority of companies are complying with the legislation, but some business owners have gone against the spirit, although not the letter, of the law, the National Post reports.

“It’s the act of bullies that has no place in this province,” Flynn said. “I really hope that the businesses that have acted in this manner decide on sober second thought to reverse the decisions they’ve made.”

Tim Hortons has been under scrutiny this month after two franchisees slashed benefits and eliminated paid breaks for employees as a result of the bump in the minimum wage. However, other businesses are reportedly coping with wage increases by raising prices, reducing production, increasing automation and/or cutting employee benefits and hours.

Morrow, the principal of the full-service dispute resolution firm Morrow Mediation, says these types of cost-cutting measures could lead to conflict and business disruption within an organization.

“With Tim Hortons, for example, it sounds like there's a gulf that's been created — and it’s widening — between those who are making the decisions and those who are impacted by those decisions," he says. "There’s a lot of finger pointing going on between the parent company and franchise owners and workers are caught in the middle.

He says some business owners will have to make tough decisions in order to comply with changes to Ontario’s employment and labour laws.

“The minimum wage issue is non-negotiable — it's the law,” Morrow says. “But if employees are coming into work to find co-workers terminated and others with reduced hours or benefits, these measures will impact morale. There could also be a general feeling of unfairness and a desire to go public, as we’ve seen with the recent spate of Canada-wide protests led by disgruntled Tim Hortons employees. As well, it’s notable that members of labour unions are showing up with picket signs to support these workers. We may be seeing the beginning of a labour movement here. It’s shaping up as a public relations powder keg for an iconic Canadian brand.” 

He says this tension can lead to a poisoned workplace, but confidential mediation or other forms of third-party intervention may prove beneficial for both employers and employees.

Morrow — who earlier in his career was a facilitator and legal counsel with the Ministry of the Attorney General’s dispute resolution office where he facilitated numerous complex poisoned work environment interventions — says when dealing with workplace morale, it’s crucial for employers to give employees a voice. 

"Give employees a chance to explain their concerns," he says. "If they have a sounding board and know that you're prepared to listen to their concerns rather than imposing unilateral changes, it can go some distance in reducing workplace tension.

“You're dealing with real people who have made a contribution; you need to work with them to find a way to help them feel heard and valued,” he adds.

At the same time, he says low morale can have a major impact on the bottom line through protests and boycotts.

“If you have an unhappy workplace, it's going to affect your business. It just makes good sense to have these conversations,” Morrow says. "In the Tim Hortons' context, it’s time for representatives of government, the parent company, franchise owners and employees to sit down together with a mediator to have a conversation away from the public spotlight."

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