Canada In a fight over minimum wage at Tim Hortons, the worker loses

14:55  05 january  2018
14:55  05 january  2018 Source:   Maclean's

Minimum wage hikes could cost Canada's economy 60,000 jobs this year

  Minimum wage hikes could cost Canada's economy 60,000 jobs this year Minimum wage hikes across Canada this year could cost about 60,000 jobs, the Bank of Canada warns in a new report.The central bank published a report over the winter break, attempting to calculate what sort of economic impact a series of minimum wage hikes set to come into force this year will have on Canada's economy.

With both Tim Hortons franchisees and the company’s head office refusing to absorb the costs of higher wages , front-line workers are paying the price by having their benefits cut.

Ontario premier calls Tim Hortons heir 'a bully' over wage actions. Tim Hortons heirs cut paid breaks and worker benefits after minimum wage hike, employees say.

a man standing in front of a building: THE CANADIAN PRESS/Eduardo Lima© Used with permission of / © Rogers Media Inc. 2018. THE CANADIAN PRESS/Eduardo Lima

For months leading up to Ontario’s minimum wage increase, businesses have been warning of dire consequences such as price hikes, job losses, and reduced staffing. Some business owners, according to the Canadian Federation of Independent Business, said they would consider shutting down, selling out or moving elsewhere. Now that the wage increase is in effect, some of these predictions are coming to pass—at Canada’s most iconic coffee chain, no less.

The owners of a Tim Hortons franchise in Cobourg, Ont. sent a letter to employees asking them to sign a document acknowledging the loss of certain benefits, paid breaks and other incentives in response to the province’s minimum wage hike. (As of January 1, the minimum wage increased from $11.40 per hour to $14. It will increase to $15 per hour next year.) The owners also happen to be married couple Ron Joyce Jr. and Jeri-Lynn Horton-Joyce, the son and daughter of the company’s co-founders. Joyce’s father is worth $1.57-billion, according to Canadian Business.

Tim Hortons heirs cut paid breaks and worker benefits after minimum wage hike, employees say

  Tim Hortons heirs cut paid breaks and worker benefits after minimum wage hike, employees say Employees at a Tim Hortons franchise owned by the children of the chain's founders say they're losing paid breaks and other benefits in response to Ontario's minimum wage hike.RYAAY

Ontario premier calls Tim Hortons heir 'a bully' over wage actions. Tim Hortons controversy shows Canadians are 'addicted to a low- wage economy,' says author. Tim Hortons heirs cut paid breaks and worker benefits after minimum wage hike, employees say.

“That was a big benefit for the people who work at Tim Hortons , because it’s not a However, the minimum wage hike is being implemented over 24 months. The people who can least afford to lose — the staff — are going to be the ones left holding the bag, while Horton -Joyce and Joyce Jr. enjoy

READ: The results are in: Tim Hortons is no longer Canada’s favourite coffee shop

The letter, posted to Facebook last month and first reported by CBC, informs workers that breaks will no longer be paid and that those with more than five years service will have to cover half the cost of their benefits, whereas the entire cost was previously covered by their employer. “We apologize for these changes,” the letter reads. “Once the costs of the future are better know [sic] we may bring back some or all of the benefits we have had to remove.”

The news has prompted considerable outrage online, and even Premier Kathleen Wynne weighed in with a statement Thursday directed at Joyce. “It is the act of a bully,” Wynne said of the letter. “If Mr. Joyce wants to pick a fight, I urge him to pick it with me and not those working the pick-up window and service counter of his stores.”

What’s missing in the debate over Ontario’s minimum wage

  What’s missing in the debate over Ontario’s minimum wage Opinion: Political debates are fundamentally about how we want to live together—and if we ignore the human element, we threaten our democracy

Controversy over the heirs of the Tim Hortons empire cutting worker benefits at their smalltown Ontario franchise is bad for the entire Tim And I have great empathy for the minimum - wage people, but I think this is turning into kind of a binary fight . There's 3,500-plus Tim Hortons in Canada.

How disappointing that Tim Hortons heirs are taking out their wrath about an increased minimum wage in Ontario on employees at franchises they own. Many economists argue, however, that such fears are over -blown, that the Canadian economy can cope, and that higher wages give lower- wage

While the son of a billionaire stripping minimum wage workers of their benefits is an easy target for the premier, the situation is also the result of tension between franchise operators and the Tim Hortons’ parent company, Restaurant Brands International (RBI). Ultimately, neither franchisees nor head office wants to risk profitability by absorbing the costs of higher wages, and so front-line workers end up losing.

READ: Why a $15 minimum wage is good for business

Unlike truly independent small business owners, franchisees have limited control over their operations. “Tim Hortons is managed top-down as a franchise concept,” says Douglas Hunter, author of Double Double, a history of the company. “The reality for franchisees is their profit margins are really dependent on costs that they do not have a tremendous amount of control over.” One cost store owners can control is labour—a fact Tim Hortons was quick to point out in response to CBC’s story. “Almost all of our restaurants in Canada are independently owned and operated by small business owners who are responsible for handling all employment matters, including all policies for benefits and wages, for their restaurants,” a media rep said in a statement.

The hypocrisy of a Tim Hortons: a business built on coffee breaks

  The hypocrisy of a Tim Hortons: a business built on coffee breaks If all Canadians lost their paid breaks, like some workers at a Tim Hortons in Ontario, what would be left of the once iconic company?MCD

Related Stories. Tim Hortons heirs cut paid breaks and worker benefits after minimum wage hike, employees say. No quick fix for employees losing compensation or benefits after minimum wage hike, experts say.

WATCH: Tim Horton ’s location trims worker benefits citing minimum wage increase. Alberta, where the average pay was close to , may be in a better position to absorb the increase but would also face a minimum wage that’s over half of the average wage , Fortin said.

Left unsaid is what the corporate office controls, such as menu prices and the supply costs to the franchisees. Other businesses have announced price hikes purportedly in response to the minimum wage increase, a predictable and less controversial measure than disadvantaging employees. Franchisees, however, don’t have that option since prices are typically set by head office. Franchisees are also obligated to purchase food and equipment from the corporate parent, and have little leverage to negotiate those costs down.

The Great White North Franchisee Association, a group that says it represents 60 per cent of Tim Hortons owners in Canada, criticized the parent company for failing to help its members deal with Ontario’s minimum wage legislation. The GWNFA board of directors issued a statement saying it hoped RBI “would lend support to franchisees in the chain by lowering food and paper costs, reducing couponing and raising menu board prices…While other competitors have received concessions from their franchisors, unfortunately our chain has not.” As a result, “many of our store owners are left no alternative but to implement cost saving measures in order to survive.” RBI did not directly reply to the statement when asked by Maclean’s.

By the numbers: How much will the minimum wage hike cost Tim Hortons?

  By the numbers: How much will the minimum wage hike cost Tim Hortons? The Great White North Franchisee Association says the minimum wage increase will cost the average Tim Hortons franchise $243,889.10 a year Here’s a closer look at the numbers provided by the association, which says on its website it represents 50 per cent of the Tim Hortons chain in Canada. The figure is based on a minimum wage increase of $2.40 an hour The calculation assumes the $2.40 increase will be applied to every worker’s salary. Only employees who were making the previous minimum wage, $11.60 an hour, are legally entitled to the new rate, $14. Some businesses have said the higher rate will inflate their entire payroll because they want to maintain pay differentials between newer hires and more senior staff. The $2.40 rate is bumped up to $3.35 an hour when other costs are factored in. GWNFA says this figure includes Canadian Pension Plan, Employment Insurance, Employee Health tax, workers’ compensation premiums, training costs, sick leave, and increased vacation pay. Increased vacation pay introduced by Bill 148 will only impact workers who have been with a company for five years or more. They will now be entitled to three weeks leave. Average number of employees at a Tim Hortons store: 35 Average increased cost for one full-time employee: $6,968.26 Divided by the hourly cost increase (of $3.35) per employee and a 52-week year, this figure suggests Tim Hortons employees work a 40-hour week.

One Tim Hortons franchise has cut back on benefits to compensate for lost profits. "This is about pushing for a minimum wage that is poverty-free," she said. "That's a Canadian value." Are you a worker earning minimum wage and have had your compensation or benefits change?

The minimum wage hike and other new franchisee costs, like vacation pay, have put Tim Hortons franchisees in " a difficult situation," said a Missing at Massey Hall: Beethoven, Bach stained-glass pieces lost in sands of time. Young girl hit by vehicle after running out into traffic: Halifax police.

READ: Why are Tim Hortons’ lids so awful?

The association has a fractious relationship to Tim Hortons and RBI. In June, a $500 million lawsuit was filed on behalf of a GWNFA member against RBI, alleging the company improperly used money from a national advertising fund. The association filed another suit in October, accusing RBI of seeking to “interfere with, restrict, penalize or threaten franchisees from exercising their rights to associate.” (The claims have not been tested in court, and RBI denies the allegations.)

RBI, which also owns Burger King and Popeyes Louisiana Kitchen, earned US$955-million in profit in 2016, an 87 per cent increase over the year before. Just how much money a Tim Hortons franchisee earns is less clear. “Anybody I’ve known running a Tim’s has said it’s not a license to print money,” Hunter says.

The question of how Tim Hortons responds to the minimum wage increase is likely to intensify for both franchisees and the parent company. By the end of 2018, Alberta, Quebec and Prince Edward Island are expected to raise the minimum wage, too.

MORE ABOUT TIM HORTONS:

  • Tim Hortons franchises owned by co-founders’ children cut benefits, paid breaks
  • Coffee Taste Test: Tim Hortons vs. McDonald’s
  • The results are in: Tim Hortons is no longer Canada’s favourite coffee shop
  • Good enough to tweet?
  • Can Tim Hortons thrive without its Canadian crutch?
  • Tim Hortons parent company to buy Popeyes
  • Alberta man fights off cougar at Tim Hortons
  • Nova Scotia man seeks retribution for dead mouse in Tim Hortons cup

Tims customers fight cutbacks at rallies .
TORONTO - Protesters who rallied outside Tim Hortons locations across Ontario on Wednesday roasted some franchisees for slashing workers' benefits and breaks in an effort to compensate for the province's minimum wage hike, but many said their gripes would not derail their daily coffee runs. Those who gathered said they were worried staff would be negatively impacted if they boycotted to spite the small handful of franchisees — not necessarily the 16 locations that were targeted — who demanded workers cover a larger share of their dental and health-care benefits and take unpaid breaks to offset the 20 per cent raise to $14 an hour.

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