Tim Hortons’ treatment of workers ‘wrong,’ says Windsor labour leader
A Windsor labour leader calls it “wrong” and “unfortunate” that a company as profitable as Canadian icon Tim Hortons has franchisees chopping benefits and removing shift premiums for employees in response to Ontario’s minimum wage hike.
“Some of these big conglomerates need to look in the mirror,” said Brian Hogan, president of the Windsor and District Labour Council.
“Tim Hortons made millions in profits last year. The bump (in pay) their workers got, they deserve it. What’s wrong with instead of getting $100 million in profit having it be $99 million? It’s ludicrous.”
One employee at a Tim Hortons location in Essex County informed the Star Friday she is losing a nighttime shift premium which her owner said was due to the increased costs of Bill 148. Other workers from the restaurant chain in Windsor have described being forced to now pay for their uniforms and losing paid work breaks.
Elsewhere in Ontario, the restaurant chain’s franchisees have reduced health benefits or forced employees to make greater contributions.
Tim Hortons’ treatment of employees has fallen under a glaring spotlight with Ontario Premier Kathleen Wynne accusing the company of acting “like a bully” to workers since the government’s new legislation kicked into gear Jan. 1. It included boosting the minimum wage by $2.40 an hour, to $14 per hour.
“Big companies like Tim Hortons or the grocery chains, what they are saying to workers is ‘you don’t deserve to be able to move out of poverty a little bit,’” Hogan said. “Unemployment numbers are down, the economy is going well and they act like the sky is falling.”
It should be kept in mind that workers earning a higher minimum wage will be spending their pay hikes in their own local communities, he said.
A group representing a majority of the franchise owners at Tim Hortons — Great White North Franchisee Association — is crying foul, pointing the finger of blame at its corporate head office.
The association said franchisees are suffering since menu prices are set by the corporation, which also charges high prices for required products for each store. They are also concerned about other increased costs as a result of the new legislation, which includes more vacation pay, sick pay and other new benefits for part-time employees in Ontario, in addition to the bump-up in hourly wages.
The group released a statement firing back at Wynne saying they are disappointed she is debating the new legislation in the media rather than meeting with small business owners face-to-face.
“The premier and her government have shown no understanding of small business in Ontario and fail to recognize the hardship many have felt, not only in the Tim Hortons chain, but in all types of small business by raising the minimum wage so dramatically over such a short period of time,” the statement said.
Added costs for each Tim Hortons franchise owner based on an average number of 35 employees adds up to over $250,000 per store, per year, the association said. That figure is based on added costs per employee of about $7,000 per year.
“The cost to many small businesses will be tens of thousands to hundreds of thousands of dollars, with their entire profit margins wiped out for many,” the group said.
Brazil-based 3G Capital owns 51 per cent and holds majority control of Tim Hortons under Restaurant Brands International. The fast food chain conglomerate also includes Burger King and Popeyes franchises.
System-wide sales for Tim Hortons were up three per cent, according to the quarterly financial statement released by the company in October. The company reported sales of US$1.8 billion over those three months — up from the $1.69 billion for the same three months in 2016.
The corporate head office in Canada for Tim Hortons released its own statement Friday blasting the association of disgruntled franchise owners as a “rogue group.”
RBI held a 3 p.m. conference call for all Tim Hortons franchise owners Friday, but neither side indicated the nature of the call.
“There are several things that make the Tim Hortons brand truly unique — like our connection to our communities and the great relationship our restaurant owners and their team members have with our guests,” the company said in its statement.
“While our restaurant owners, like all small business owners, have found this sudden transition challenging, we are committed to helping them work through these changes. However, Tim Hortons team members should never be used to further an agenda or be treated as just an ‘expense.’ This is completely unacceptable.”
Ontario’s Minister of Labour Kevin Flynn also attacked the company Friday, saying he was “disappointed” in the actions of some franchise owners.
“While the vast majority of business owners, including Tim Hortons, treat their workers well, some do not,” he said. “This is why after consulting with Ontarians our government felt it was necessary to bring forward legislation that would improve wages and offer more support for some of our most vulnerable workers.
“These franchise owners are trying to make a statement, but instead of coming to the government to make that statement, they’re taking it out on their employees. That is simply wrong.”
With Ontario’s economy performing well, “it’s time all workers get a chance to share in the rewards of this economic success,” Flynn said.
Provincial rules under the Employee Standards Act require that workers receive at least minimum wage, but state nothing in regards to shift premiums, the ministry said. Employees are entitled to 30-minute unpaid eating periods after five hours of work, but if both sides agree, that can be split into two shorter eating periods during the shift.
In regards to paying for uniforms, the terms of employment must detail who is to cover the cost. If a worker has the cost deducted from wages, the employee must agree in writing.
In regards to any sudden changes to health benefits, an employer “must give an employee written notice of a change,” the ministry said.