Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50880
Work force restructuring Workforce Legal pitfalls abound when controlling costs through a restructured workforce. By Glenn Kauth planned raises for cost of living and per- formance for its non-unionized staff. At the same time, politicians reject- ed proposals to freeze their own sala- ries while potential raises for the city's unionized staff remain subject to ongo- ing negotiations. "Certainly, non-union- ized employees are not covered by the same benefit of a collective agreement, and as long as legislative requirements are met, council is free to do that," says city solicitor Anna Kinastowski. Even at the best of times, the idea of public I f you work for the City of Toronto and you're not in a union, you can likely forget about much of a pay increase this year. In April, city council considered whether to scrap sector workers who enjoy enviable job security watching their salaries get fro- zen isn't something that's likely to spark protests at city hall. But the spectre of employees seeing the terms of their jobs change suddenly raises legal questions, an issue an increasing number of busi- nesses are grappling with as they try to cut labour costs. "In 25 years of practice, this is the biggest deal I've seen," says Dean Palmer, a partner in the labour and employ- ment group at McCarthy Tétrault LLP in Toronto. "It's the most dramatic sit- uation I've seen in employment law in terms of closures, reductions, and downsizings, no question." While sto- ries of layoffs have been making front- page headlines, Palmer notes many employers have been seeking to avoid cutting their workforce through alter- native ways of reducing costs. "The legal people and the [human resources] people are trying to reframe the ques- tion to say, 'Can we look at reducing our employment costs by 10 per cent as a more general statement?'" As a result they're considering options such as cutting salaries by 10 per cent. Such moves raise the prospect of constructive dismissal claims, but so far Palmer has been surprised to see "none, or very little, fallout in these particular cases. I'm not sure that that approach would have worked two years ago," he says. "But I think employees . . . believe these are times like we've never seen before and they're willing to pull together." Chrysler's agreement with its Canadian labour force in late April was an example of reducing overall employee INHOUSE JUNE 2009 • 23