Employment lawyer reveals the best way to reward people without breaking the bank
Brace yourselves for some big waves this quarter, with issues such as inflation, wage increase demands and the now voided Bill 124 causing major fallouts for Canadian employers.
That’s the advice of Mike MacLellan, partner at Ontario-based law firm CCP, who revealed to HRD that it could be the perfect storm for yet more labour market disruption — especially where collective bargaining is concerned.
“In 2022, we had the latest round of bargaining in the construction industry — the wage increases and work stoppages were historic,” says MacLellan. “Never had we had large wage increases or so many work stoppages during a round of bargaining in the construction industry. And I believe that’s a harbinger of what's to come.”
Bill 124 challenges
It all began with Bill 124 – Ontarian legislation that would effectively limit all wage increase for public sector employees at one percent. Controversial as it was when it was introduced in 2019, the onset of the pandemic and the tight talent shortages in the healthcare sector made the bill untenable in the eyes of many employees and their unions.
So much so, that late last year the Superior Court of Justice declared Bill 124 "void and of no effect", with the office of the attorney general adding they’re "reviewing the decision" and may appeal.
“The Ontario government's Bill 124, the cap on public sector wage increases and collective agreements, has been struck down as unconstitutional,” adds MacLellan. “The government has said they're going to appeal that decision. However, in the meantime, you've got the unions that’ll be seeking compensation for this currently unconstitutional legislation.”
Another aspect of Bill 124, MacLellan tells HRD, is that it mandated just a temporary cap – meaning that organizations will see collective agreements emerge from thar one percent moderation period.
“It’s kind of a perfect storm,” he says. “Workers had their wage increases limited by legislation, the legislation was struck down as unconstitutional, and now we’re dealing with inflation. Certainly we're going to expect, in the public sector at least, significant demands for wage increases. I think what we're also going to see is, as a means of compromise, cost-of-living increases.”
Employers could look to mitigate wage fallouts by offering an increase linked to the Consumer Price Index. Essentially, instead of offering set percentage rises over the course of an agreement, MacLellan believes some organizations could offer one rise followed by incremental cost of living bumps.
Add on to this the rise in popularity of non-monetary benefits, and employers may not be too much out of pocket. Canadian data from a 2022 LifeWorks survey found that 55% of employees would prefer flexible working over career progression, with a further 34% adding that wellness benefits are a main reason they stay with their current organization.
So, it’s time to start looking at your perk plans before your salaries, says MacLellan.
“We're going to see other less monetary benefits, such as work flexibility — remote work and hybrid models,” he says. “If it's a collective agreement that work flexibility comes in soon as possible, that could be a reasonable way for employers to offer benefits to employees that’re not directly tied to the compensation. It won’t necessarily be as costly to the employer but will still give a real perk to their people.”
